Advertisers aren't exactly welcoming Microsoft and Google into the industry, according to a report from the Cannes Lions festival.

According to The New York Times, a number of the event's agency attendees were highly critical of Google's plan to sell search ads on Yahoo. That deal has had a mixed reaction, with some advertisers expressing concern that paid search prices are likely to spike, and others insisting that consolidation will lead to greater efficiency. But the sentiment among most advertisers in Cannes was that Google and Microsoft are vying to revolutionize advertising at the expense of Madison Avenue.

That sentiment may have been exacerbated by Microsoft's decision to send more than 500 employees and clients to the event, where Martin Sorrell, WPP's CEO, told attendees that his agency spends $900 million a year on Google's search ads.

But it's not the spending that has many ad agency executives, including Sorrell, worried. What keeps them up at night appears to be the hiring trends of both Google and Microsoft, which have been going after advertising executives. That has many on Madison Ave. worried that both Google and Microsoft are looking to replace agencies altogether. But Google refutes that claim.

"The best results are when we work together with agencies," said Henrique de Castro, managing director of European sales and media platforms at Google. "The overall trend is that we work better and better with them."

But the factionalism cuts a number of ways. While agencies may be wary of Microsoft and Google, and Google is keen to sell the agencies on the idea of cooperation, Microsoft has taken a somewhat different tact.

"In an industry that is consolidating around a small number of advertising platforms, we think people are better served when there is n number of platforms, where n is greater than one," said Kevin Johnson, president for the Microsoft platforms and services division.

That fear of consolidation has been made all the more real as the industry has watched Yahoo's slump turn into something of a meltdown. Last week, the internet giant was rocked by a series of high-profile executive departures.