In Cannes, advertising and media executives have seen the death of paid media advertising:

All week at Cannes, advertising and media executives have grappled with the implications of virals which have reached millions of people via the internet, often by-passing traditional media. A few have involved no spend on media, offline or online.

With the success of viral video content, courtesy of YouTube — in some case with millions of views — it’s starting to dawn on advertising and media companies that brands no longer need them to reach and interact with consumers on a large scale:

One of the world’s biggest advertising agencies has urged marketers to learn from consumer-created content on websites such as YouTube.com, which now has greater reach among some US audiences than MTV, the music broadcaster.

But not only are ad agencies and media companies being cut out of the loop — the brand owners themselves can’t even get between consumers and their direct experience with the brand:

Consumers are hijacking top global brands using blogs and online communities but advertising companies are trying to find ways to embrace the revolution rather than fight against it.

The Internet has turned the traditional world of advertising on its head with a growing shift of spending to online from print and TV. The Web is giving millions of consumers an outlet for their views on products and brands, bypassing traditional media.

“Our audience has gone from watching commercials to making them,” said Mark Tutssel, the chief creative officer for Leo Burnett Worldwide, a division of Publicis.

“We’ve gone from monologue to dialogue in a nanosecond,” he added. “Marketers are no longer in control. The consumer is.”

So what does it mean to “embrace the revolution”?

“Citizen media and consumer generated content are here to stay, so marketers must learn to let go of the control they think they have over their brand in the open marketplace of ideas,” Tutssel said.

I think that companies need to forget about advertising as “persuasion” — in fact, they “let go” of marketing entirely.

In a post-advertising era, when the consumers are in complete control of brand perceptions, there’s only one effective way to “advertise” — create REALLY great products and services that people love and that offer an unrivaled experience, i.e. make stuff that people REALLY want to buy.

The product is marketing and marketing is the product.