DECODING COVID-19 Observations, Implications and Possible Actions Bulgaria 3.0

DECODING COVID-19 Observations, implications and possible actions Bulgaria 3.0

April 3, 2020 Stay responsible, stay safe

We all have a shared responsibility to make sure that the corona infection is spread as little as possible and ultimately stopped. The recommendations of the Government and the health authorities are completely clear – please avoid any unavoidable contacts and take the situation seriously. Rather make too much than too little. Dentsu Bulgaria is supporting and following without hesitation the recommendations and initiatives initiated by the health and government authorities. We have a duty to answer responsibly in a society that needs everyone - both the business and its single citizens - to support and do what is necessary in this situation. We are closely monitoring the coronavirus (COVID-19) outbreak since the beginning of the crisis. Our primary aim is to ensure we are protecting the health and safety of our people, clients and the communities in which we operate. Many Bulgarian companies are going through difficult times at the moment, and now, more than ever before, we are here to advise and support their concerns. Meetings are held virtually, and while different than usual, it also gives us new perspectives on collaboration and untapped In order to provide the best possible help and support to all our partners, we have launched the Dentsu Covid- 19 site. This site will ensure we make our knowledge and insights available to anyone who might need it during opportunities in the digital world. this difficult period in our lives. https://www.dentsuaegisnetwork.com/bg/en/covid-19 Catching up…

o An Emotional Roller Coaster

o Dramatic & massive consumer behavior migration

o People are looking to trusted brands to provide them with safety and security in testing times

o Companies & Brands are rising to the occasion Which one is a bigger threat for you? After initial shock, people start to recon what future might be… 70 60 The dystopian reality of deserted airports, empty trains and unoccupied restaurants is already badly hurting 50 economic activity. The longer the pandemic lasts, the greater the risk that the sharp downturn morphs into a 40 financial crisis. 30 People fear the spread of the coronavirus will destroy the economy and their wellbeing and that government action 20 may not be enough to stop the decline. 10 In response, Bulgaria's government said that it has adopted draft changes to the country's 2020 balanced 0 budget, envisaging a deficit equivalent to 2.9% of gross domestic product (GDP), or 3.5 billion levs ($2 billion/1.8 coronavirus billion euro), due to the coronavirus pandemic. the economic situation after the crisis

The government also decided to raise nearly fivefold the ceiling of new debt it can issue, to 10 billion levs from 2.2 billion levs initially. The budget revision is pending approval from parliament. Source: Institute for Population and Human Studies, BAS, All 18-64 How anxious you feel on a scale from 1 to 10 where 1 is “completely calm” and 10 “extremely anxious” (avg. Changing points of their 5.39) attention & concern, which are converging to 20,0 a now stable state of 15,0 10,0 anxiety… 5,0

0,0

The women are showing significantly higher levels of 1 2 3 4 5 6 7 8 9 10 anxiety but are also more optimistic as regards to the men. 6

The slightly heightened levels of intolerance towards 5,5 uncertainty are mirroring the human need for a future perspective. Therefore spread of positive news is now 5 steadily becoming a demand. 4,5 Both brands and media are expected to tap into this otherwise unprecedented state of human approach 4 towards news male female

Source: Institute for Population and Human Studies, BAS, All 18-64 Levels of ‘optimism’ – 22.26 (avg. 18) Optimism doesn’t wait 22,5 on facts, but needs 22 prospects, in a state where stress never 21,5 restrains… male female

Levels of ‘stress’ as related to working environment (avg. As anxious as they are the women are still much more optimistic in the current situation as opposed to men. 12)

At work as usual The results however suggest that people have mobilized their whole capacity to take control over their anxiety and stress. This state of mobilization can At work: reduced working hours sustain only for a decent period of time according to psychologists and the levels of stress and anxiety may significantly increase after. Home office

Reducing stress and anxiety now can become a Absense leitmotif for the creatives and rocket carrier for many brands who are willing to embrace the challenge 9,5 10 10,5 11 11,5

Source: Institute for Population and Human Studies, BAS, All 18-64 The government is coping well with the coronavirus Personal rights vs outbreak personal security is a completely agree somewhat agree somewhat disagree completely disagree don’t know discussion no more…

The scale and severity of the COVID-19 pandemic 26% 34% 17% 20% 3% clearly rises to the level of a public health threat that could justify restrictions on certain rights, such as those that result from the imposition of quarantine or isolation limiting freedom of movement.

Majority of people now are declaring their readiness to sacrifice part of their human rights until the crisis with COVID-19 disappears. Bulgaria is among the leading countries in the world which population is of Bulgarian population is ready consciously declaring their support thus indirectly supporting the government measures toward the to sacrifice their human rights pandemic crisis. 83% to prevent the spread of the pandemic

Source: Gallup International …but people hearts were, are & will always be the stronger path …. Distribution of donated sources as of March 23, 2020

“Doing right” is a 18% personal, societal & corporate responsibility 8%

52%

22%

Over BGN 5 million has been donated in the fight Private companies Donation Campaigns against the COVID-19 pandemic since the beginning of the state of emergency in Bulgaria. NGO/ Foundations Personal donations

Source: Gallup International 94% of the donations are for the purchase of equipment, supplies and protective equipment Local brands respond with CSR initiatives How Brands Can Offer consumers REASSURANCE by speaking Connect With authentically in your brand voice that is honest, open and transparent that shows you care about the well-being of your consumers Consumers During and that you’ve taken steps with their well- Their Time Of Need being in mind.

During this critical and stressful time, provide SOLUTIONS that make your consumers’ lives easier such as offering delivery, free shipping, free trials, waived cancellation/late fees, etc.

As consumers spend more time online, find ways to LIFT SPIRITS by developing and/or sharing content that delights and entertains, giving consumers much needed relief during this difficult period. … and some brands rose these days

“Today being apart is the best way of being together” Coca Cola

Globally...

“Play inside, play for the world”, Nike “Keep distance”, Audi & in Bulgaria Media update

o TV o Radio o Digital Average Daily Viewing Time (min) +8%

600 +6% Media update +5% 470 500 +7% +4% 422 454 +7% 400 356 391 337 318 318 300 310 +6% -2% +14% 249 275 221 200 216 200 154 199 210 100 142

0 o TV To ta l Kids 6-11 Kids 12-14 15 -2 4 25 -3 4 35 -4 4 45 -5 4 55 -6 4 65 + Individuals

Week 02-08.03 Week 09-15.03 Week 16-22.03 Week 23-29.03 Viewership continues to increase throughout the day for all audiences

Total Available Αudience Per Time Zone (total adults)

60% 02-08.03 09-15.03 16-22.03 23-29.03 50%

40%

30%

20%

10%

07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05 06 – – – – – – – – – – – – – – – – – – – – – – – – 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05

Source : Nielsen Adults 18-55 (+6%) vs. previous week

60 % 02-08.03 09-15.03 16-22.03 23-29.03 Media update 50 % 40 % 30 % 20 % 10 % 0%

o TV Women 25-54 (+3%) vs. previous week 02-08.03 09-15.03 16-22.03 23-29.03 60 % 50 % Adult 18-55, Female & even Male 40 % 30 %

20 % Audiences have reached a new 10 % 0%

07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05 06 – – – – – – – – – – – – – – – – – – – – – – – – peak in terms of viewership 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05

Males 25-54 (+8%) vs. previous week

60 % 02-08.03 09-15.03 16-22.03 23-29.03 50 %

40 %

30 %

20 %

10 %

Source : Nielsen Adults 18-49 (+7%) vs. previous week

60 % 02-08.03 09-15.03 16-22.03 23-29.03 Media update 50 % 40 % 30 % 20 % 10 % 0%

o TV Adults 18-49 Urban (+4%) vs. previous week

60 % 02-08.03 09-15.03 16-22.03 23-29.03 50 % All Adults and Urban Audiences 40 % 30 % 20 % have reached a new peak in terms 10 % 0%

07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05 06 – – – – – – – – – – – – – – – – – – – – – – – – of viewership compared to 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 00 01 02 03 04 05

Adults 25-54 (+5%) vs. previous week previous weeks. 60 % 02-08.03 09-15.03 16-22.03 23-29.03 50 %

40 %

30 %

20 %

10 %

Source : GARB Total Market (TRPs)

Media update TARGET AUDIENCE ADULTS 18-55 239 829

220 586 216 688 216 088 210 733

o TV 173 782 +24% +9% -3% Advertising pressure is constantly

growing in the first 2 months of Jan 2019 Jan 2020 Feb 2019 Feb 2020 Mar 2019 Mar 2020 the year +16%.

From the lockdown week 54 499 54 385 56 301 49 485 observed negative trend of market 611 057 666 650 36 784 development and delivered TRPs. +9% -12% +4% -26% 0%

Jan- Mar 2019 Jan- Mar 2020 24/02-01/03/20 02-08/03/20 09-15/03/20 16-22/03/20 23-29/03/20

Source : GARB (Note: TV Shops not included, Data for March’2020 are preliminary) Total Market

Media update

o TV Not so cluttered advertising breaks! Both national TV channels marked decrease after the lockdown week compared with the same period previous year.

Source : GARB (Note: TV Shops not included) Top Adv. Categories 2020vs2019

Target Audience Adults 18-55 (TRPs)

PHARMACEUTICALS 215 987 Media update 170 601

FOODS 95 569 93 618

RETAIL OUTLETS 87 056 77 448

COSMETICS 72 668 68 763

TELECOMMUNICATION 47 805 39 670 Jan-Mar 2020

DRINKS 37 149 Jan-Mar 2019 50 298 o TV HOUSEHOLD CHEMISTRY 30 880 28 522

FINANCIAL SERVICES 30 137 26 730 HOBBY. FASHION. 17 031 Pharmaceuticals, Telecommunication, SPORT 21 101 MOTORING 9 297 11 945 Financial Services & Retail Outlets

Jan-Mar.2020 vs Category Jan-Mar 2020 Jan-Mar 2019 Dif 19/20 Jan-Mar.2019 are the categories exhibiting the Pharmaceuticals is the #1 PHARMACEUTICALS 170,600.80 215,987.20 27% category for both years, with a FOODS 93,618.41 95,568.66 2% 27% increase in 2020, RETAIL OUTLETS 77,448.48 87,056.00 12% highest growth. followed by Foods products +2%. In 2020 the top COSMETICS 68,763.18 72,668.05 6% advertising categories are TELECOMMUNICATION 39,670.05 47,804.52 21% increasing their Share of DRINKS 50,298.18 37,149.37 -26% Voice in the medium, with the HOUSEHOLD CHEMISTRY 28,522.31 30,880.34 8% exception of Drinks (-26%), FINANCIAL SERVICES 26,730.26 30,137.12 13% Hobby.Fashion.Sport (-19%), HOBBY. FASHION. SPORT 21,101.23 17,031.32 -19% Motoring (-22%) MOTORING 11,945.31 9,296.88 -22%

Source : GARB (Note: TV Shops not included, Data for March’2020 are preliminary) Shrink in ad budgets in all sectors compared to previous year

Source : GARB (Gross budgets) Shrink in ad budgets in all sectors compared to previous year

Source : GARB (Gross budgets) Increased Interest in Central News Block- bTV & Nova Gain Share

14,6% 13,4% 13,3% 13,5% 12,9% 12,4% 10,7% 10,9% 11,1% 10,6%

24.02-01.03 02.03-08.03 09.03-15.03 16.03-22.03 23.03-29.03 24.02-01.03 02.03-08.03 09.03-15.03 16.03-22.03 23.03-29.03

3,7% 4,2% 3,7% 3,0% 3,3%

Target Group: 18-55 , 24.02-01.03 02.03-08.03 09.03-15.03 16.03-22.03 23.03-29.03 Source : GARB & Nielsen Bulgaria (Rating%) Significant decrease noted in March 2020 Media update Radio Total Market (sec) - Bulgaria

-3% 1 036 012 10 870 866 882 397 10 494 857 751 876 796 637 583 171 612 486 -15%

+5% -23% o Radio

2018 2019 Jan 2019 Jan 2020 Feb 2019 Feb 2020 Mar 2019 Mar 2020

Decrease in listenership intensified right after lockdown… 225 272

186 042 167 440 169 309

-17%

The lockdown week, Radio activity -9% +35% intensely dropped

2-8/3/2020 9-15/3/2020 16-22/3/2020 23-29/3/20202

Source: New Media Lab, March’2020 data preliminary Overall, Radio gross investments remain stable during the first two week of March.

Radio station Diff. w11 vs. w10 Diff. w12 vs. w11 Diff. w13 vs w12 Media update Radio1 24% -12% -22% Darik 6% -15% 1% NRJ 45% 9% -12% BG Radio 27% -15% -6% NJoy 60% -40% -21% Veselina 16% -2% -2% Vitosha 24% -19% -22% Fresh 38% -22% -23% o Radio Veronika Sofia 69% -3% -8% FM+ 57% -26% -21% Radio 1 Rock 38% -41% -3% City 51% -22% 2% Horizont -6% -49% 72% After the government declared coronavirus Focus Radio 0% -4% -20% state of emergency in week 12, observed Nova News Sofia 50% 11% 22% slight decrease and negative trend in gross ZRock 60% -30% 8% investments. Magic FM 26% -12% -1% BTV Radio 44% -35% -2% Bulgaria On Air Radio 9% -19% 38% Radio Nova 47% -26% 4% Melody 178% -18% -14% The Voice Radio 34% -2% -3% Zorana 12% 3% -34% Darik Nostalgie 24% 13% -12% Radio Sofia 82% 209% 208% Source: New Media Lab, March’2020 data preliminary Hristo Botev -100% #DIV/0! 149% Novinite sega 62% 34% -48% Digital becomes the main point of reference for our daily habits. And now they speaks for themselves

Google showed the freezing effect of the first stage of the quarantine over the Bulgarian population in a snapshot. o Visits to restaurants, cinemas, cafes, malls and entertainment venues has dropped with two-thirds o More than half of the passengers of the public transport (busеs, trains, metro stations) stopped using it at all. o Travels to workplace had dropped with almost a third. Staying home is a status quo, parks are a trespass zone, groceries and pharmacies suffer less

o Staying at home remains the ultimate norm o Grocery and farmers markets, food warehouses, drugstores and pharmacies had lost more than one- third of their customers – people buy more but go there less o Parks had become a trespass zone and is visible that people tend to oblige the restrictions imposed by the government reducing their walks in green and recreation zones with more than a third Bugras Peoples’ behavior do nor differ much among the different cities. The smaller the city - the Razgrad bigger the percentage of people that stay at home.

o Retailers visits had dropped most significantly in Burgas: -74% Vratsa o Groceries and pharmacies suffer most in Razgrad o Pernik and Vratsa lead with same percentage (+21%) the residential category with most local people remaining at home How can we help? Take the lead today and tomorrow by getting in touch with us. We have the knowledge and people to help or guide you. Please contact your agency contact to discuss scenario planning and actions to get through and beyond the current Covid-19 situation. https://www.dentsuaegisnetwork.com/bg/en/covid-19