Gaming & Esports

pulse: Navigating the New Normal

April 17th Edition For more information please contact [email protected] Dentsu Pulse | Navigating the New Normal A weekly curation of key trends and insights for marketers and brands.

“We cannot choose the challenges we face, but we can choose how we respond to them.” –Greek Philosopher, Epictetus

It is becoming clear that COVID-19 presents a challenge unprecedented in modern times - disrupting nations, economies and lives in ways not thought possible a few weeks ago.

Our ability to respond to this change in productive and constructive ways depends on our ability to sift through the overwhelming torrent of news and information: to understand key dynamics and derive actionable insights that allow us as marketers to adapt in meaningful ways to safeguard and enhance the well-being of our people, our brands and our consumers.

It is in that spirit that we developed the Dentsu Pulse: to bring together and curate the most up-to-date information, insights and thinking from across the Dentsu network to help marketers navigate the shifting road ahead. We’ll be with you as we push through the immediate crisis into recovery and, ultimately, a return to growth. Our goal is to publish this report on a weekly basis.

A final thought (and silver lining). As you will see from our research in this report, consumers are looking for brands to take an active leadership role in helping them weather this storm. That means, more than ever, brands have an opportunity (dare we say mandate) to not just MARKET AT consumers as transactional buyers of products, but MATTER TO people as individuals and members of communities. As devastating as this crisis is, it offers a unique chance for brands to truly live their purpose. We stand ready to support you in this journey.

2 This Week’s Summary

1. THIS WEEK'S DATA AND HEADLINES As the world weathers one of the most difficult weeks of the pandemic thus far, cases continue to rise in the US. Unemployment continues to hit staggering, record-breaking numbers, and the US government is under severe pressure to get back to business. Across corporate America, companies and individuals are feeling the dire impacts of the coronavirus pandemic: almost 300 companies have withdrawn their financial guidance; about 175 companies suspended stock buybacks or cut their dividend; and 100 firms that together employ some 3M people have said they would furlough workers.

2. DENTSU MEDIA MARKETPLACE TRACKER This week’s Media Marketplace Tracker focuses on Gaming & eSports, genres which are truly having a moment right now, offering a unique opportunity for marketers to connect with this sizeable and growing fan base as the entire traditional Sports world remains on “pause.” Social distancing has led to a significant uptick in gaming participation, stream viewership, and opportunity for brands to stay connected, or begin connecting, with fanbases. But gamers are sponsor-savvy and know when they are being treated as “test subjects” by brands who are piloting initiatives – brands should be prepared to show commitment to this space & fan base for the long term. Our partners from MKTG have prepared a short overview on the space to educate you and your clients on this fast-growing space.

3. DENTSU COVID-19 CRISIS NAVIGATOR Reflected in this week’s survey results is a nation in search of stability. It is clear that the way people respond to COVID -19 is increasingly complex as multiple crises hit society at once (health, economic, political, social). Non-linear movement within our response framework demonstrate the nuance: some respondents move back into Initial Shock while others progress towards Living a New Normal. We see sentiment temper slightly from the previous week, a heightened desire for normalcy and time spent with media reach a saturation point. Consumers not only expect brands to act, but they are paying close attention to what brands say and do in response to the pandemic.

3 This Week’s Summary (continued)

4. CULTURAL AND CONSUMER TRENDS “What will stick?” This is the question on every marketer’s mind as they watch consumers’ behavior shift in response to the crisis. This week, we look at trends that are rewriting of the “rules” – at both the consumer and cultural level – as society is forced to adapt and let go of stringent ideas about “the right way” to do things. Each trend begs the question of whether it will persist beyond these circumstances. We offer our perspective on the matter and outline implications for marketers.

5. INSIGHTS AND IMPLICATIONS BY INDUSTRY VERTICAL • Financial Services: Net trading within 401(k) accounts spikes to record highs, while the • High-Tech & B2B: B2B technology brands, particularly those offering mortgage industry watches applications drop and relief requests jump to highs that could diversified cloud services, field increased YoY demand as the pandemic leave services with a liquidity shortfall of as much as $100B in the next nine months. progresses, while tech hardware supply chain concerns arise. In-depth • Media & Entertainment: Shelter-in-place orders continue to drive streaming service industry trends available on Page 101. subscriber growth. Disney has hit 50M paid subscribers globally, • Health & Wellness: Healthcare providers turn to telemedicine and beating Netflix for most US downloads in 2020 so far. asynchronous healthcare, while consumer spending on health and wellness • Travel & Hospitality: As travel continues its precipitous decline, US airlines lobby to falls, led by declines in spending on fitness and gyms. rewrite the CORSIA carbon deal in light of the pandemic. Analysts estimate it may take up • CPG: While grocery spending remains high, the “extreme” buying peak has to five years for travel and passenger numbers to return to 2019 numbers. fallen, although the average household grocery spend remains at elevated • Automotive: US auto sales plunged to their lowest levels in almost 10 years, while levels. widespread furloughs and pay cuts continue across the automotive industry as factories • Restaurants: Restaurants and bars continue to see dramatic declines in remain shuttered. business and to seek financial aid from the government. • Retail: Against continued declines in discretionary spending, retailers lobby government • Insurance: The insurance industry remains braced for possible legislative for relief. eCommerce and digital grocery field huge demand. pressures to cover business interruptions caused by COVID-19, despite • Luxury & Beauty: Fashion executives remain focused on crisis management as retail is claiming that their plans do not cover pandemics. hit hard, and planning an eventual shift to reimagining their industry, taking into account • Non-Profit: Nonprofits continue to seek stimulus support. More than 200 significant changes in consumer spending behavior caused by both the pandemic and national nonprofit organizations have sent letters to congressional leadership oncoming recession. calling for inclusion of a “Nonprofit Track” in future legislation building on the CARES Act.

4 1. This Week’s Data and Headlines

2. Dentsu Media Marketplace Tracker

Contents 3. Dentsu COVID-19 Crisis Navigator

4. Cultural and Consumer Behavior Trends and Insights

5. Insights and Implications by Industry Vertical This Week’s Data & Headlines April 16th Edition Weekly Snapshot: Global and US (as of April 15)

Total Cases 2.50

2.00 2.08 1.93 2.00 1.50 1.78 1.85 1.60 1.70 1.43 1.52 1.00 1.27 1.35

0.50 0.59 0.61 0.64 0.34 0.37 0.40 0.44 0.47 0.50 0.53 0.56 - 6-Apr 7-Apr 8-Apr 9-Apr 10-Apr 11-Apr 12-Apr 13-Apr 14-Apr 15-Apr 16-Apr World USA

Total Deaths (000s) 160 140 120 134.62 119.70 126.73 100 108.78 114.20 80 95.74 102.69 82.08 88.50 60 69.43 74.77 40 20 9.62 10.94 12.86 14.80 16.70 18.75 20.58 22.11 23.64 26.06 28.53 - 6-Apr 7-Apr 8-Apr 9-Apr 10-Apr 11-Apr 12-Apr 13-Apr 14-Apr 15-Apr 16-Apr World USA

Source: New York Times, Worldometers, John Hopkins

Global USA Confirmed Cases Deaths Recoveries Confirmed Cases Deaths Recoveries (+4%) (+6%) (+7%) (+5%) (+10%) (+5%)

2,083,355 134,619 510,446 644,089 28,529 48,708

China

Confirmed Cases Deaths Recoveries % Change % Change (+0.1%) (+0%) (+0.1%) State Cases from Deaths from Yesterday Yesterday

New York 214,648 6% 11,586 7% 82,341 3,342 77,892 New Jersey 71,030 3% 3,156 13% Massachusetts 29,918 6% 1,108 16% Italy Michigan 28,059 4% 1,921 9% California 26,838 4% 864 10% Confirmed Cases Deaths Recoveries (+2%) (+3%) (+5%) Pennsylvania 26,753 5% 779 12% Illinois 24,593 6% 948 9% Florida 22,519 4% 614 8% 165,155 21,645 38,092 Louisiana 21,951 2% 1,103 9% Texas 16,009 6% 375 7%

Note: Increase ov er prev ious day Source: New York Times, Worldometers, John Hopkins

North America Europe

The US continues to lead In Europe, Spain has taken over the highest number from Italy with highest number of of confirmed cases cases at 182K; Italy – 165K, and across the world at over France at 147K. While Italy’s 644K cases. Top affected numbers are still high, the states in US include New infections rate is slowing down. York, New Jersey, Massachusetts, Michigan, and California. Over 48K people have recovered Asia while the death toll is over China has reopened its economy 28K, up from 15K last as cases slow down. The country week. maintains its cases at 82K. Other worst-hit countries like South Korea and Japan are also showing signs of slowdown. South America Brazil has the highest number of cases in MEA South America at 29K, followed by Peru – Australia | NZ 11K and Chile – 8K. Cases are rising in Iran and Turkey continue to report high number of Ecuador, Mexico, Panama and cases – 78K and 69K, respectively. Most African Australia recorded around 6.4K confirmed Colombia. countries are only reporting increases in single or cases and New Zealand 1.4K cases. Australia low-double digits, while almost every country on the and New Zealand are reporting fewer cases continent has at least a few cases. because of strict lockdown measures.

Source: New York Times, Worldometers, John Hopkins

China Gets Back to Normal EU Agrees to €500B Bailout After Tough Round of Discussions Last week, China lifted its 76 day lockdown on Wuhan, the birthplace of the After not being able to come to terms on an economic deal earlier this week, on Friday, coronavirus, and opened the airport there. The country reported no deaths for the the EU agreed to a €500B rescue package for hard-hit European countries. Spain has first time since January on April 7th. However, there are few new cases, all Europe's highest number of confirmed cases, with 152,446. More than 15,000 people entering the country from abroad. China announced new measures to control have died. EU ministers failed to accept a demand from France and Italy to share out the asymptomatic cases of the virus, amid concerns the country will experience a cost of the crisis by issuing so-called coronabonds. The package finally agreed to is second wave of infections that could set back the progress made so far. smaller than the European Central Bank (ECB) recommendation. The ECB has said the bloc may need up to €1.5tn to tackle the crisis. The bailout is broken up as €240bn Additionally, China has approved clinical trials for two experimental vaccines to available to guarantee spending by indebted countries under pressure and €200bn in treat the coronavirus. China, Europe and the US are all trying to become the first guarantees from the European Investment Bank and a European Commission project for to produce a vaccine. 1,000 Chinese scientists are working on vaccines, with 9 national short-time working schemes. potential versions in development.

Countries Think About Relaxing Restrictions Japan Declared a State of Emergency; While Being Vigilant about the Current Threat Announced $1T Stimulus • New Zealand, after a 4-week lockdown, is starting to see improvements, reporting Japanese PM Shinzo Abe has declared a state of emergency and announced a $1T 29 new cases on April 9. economic stimulus package. The government would suspend $240B in tax and social • France announced that its nationwide lockdown will remain in place until May 11, at security payments and pay about $55B to households whose incomes have been which point restrictions will be partially lifted, only if France continued to slow the affected by the pandemic. Under an emergency law enacted last month, Abe can epidemic. Other European countries like Austria, Denmark, Norway and Czech are ask prefectural governors to close schools, request that residents refrain from going expected to relax restrictions later this month. out or holding events, and order building owners to contribute their facilities for • Spain and Italy also hope to relax measures by the end of this month. medical use. He cannot issue stay-at-home orders or force businesses to close, as • India’s 21-day lockdown was extended by 3 more weeks till May 3rd. Prime Minister other countries have done. The emergency will last for a month. Modi said there could be some relaxations after April 20 if people showed strict observance of the rules.

Source: New York Times, Washington Post

America Faces Shortages as Cases Rise The US completes its “hardest, saddest week,” • Cases Continue to Rise and Affect Smaller Sections of Society: In what was termed as the "hardest, saddest week" for Americans on Monday, more than 9,500 people have died in the US, with a more than and the government is 157,530 cases this week. Cases are now breaking out among marginalized groups such as disabled people, under immense pressure inmates and rural communities. Food banks are facing shortages and the National Guard has been called in to help to reboot the economy as pack food boxes and ensure that the distributions run smoothly. Several groups have asked the CDC to provide aid announced earlier this guidance they can enforce. Students this week have asked for refunds for their Spring quarter, as finances are tight and online classes are not measuring up to the real thing. month appears to fall • New York Hardest Hit: New York continues to be the hardest-hit state, accounting for half of the country's short. deaths. On Thursday, the state announced record deaths of 799 people. Pennsylvania also reported its largest single-day jump – 1,989 new cases. Its number of deaths increase to 338 from 90 in one day. New York's Bronx Cases continue to rise in Zoo also reported that a tiger had contracted the disease in a "human-to-cat transmission." The tiger has infected other cats at the zoo. hard-hit spots with the • Wisconsin Votes: Despite these cases, Wisconsin held in-person voting on April 7th, after requests for votes by virus now making its way mail were rejected by the Supreme Court. to rural America. • California Gets Equipment: California Gov. Gavin Newsom has announced that the state would spend $1.4B on PPE for healthcare and essential service workers. The state agreed to buy 200M masks a month from factories in Asia. As part of the plan, the state is contracting with a company to sterilize 80,000 N95 masks daily. The masks can be used about 20 times before being discarded. Newsom said he would share the masks with other states.

Source: New York Times

President Trump to Issue New York Governor Issues US Authorities Start Thinking President Trump to Halt Guidelines to Governors Stricter Social Distancing about Plans to Reopen WHO Funding Measures President Trump will issue guidelines New York tightened its social-distancing US authorities are weighing in on when and how President Trump said that he planned today to governors on how to reopen the measures. Governor Andrew Cuomo to restart the economy as coronavirus infection to stop US funding of the WHO, until a economy (4/16). The President consulted said he was signing an executive order rates show signs of stabilizing. President Trump review can be conducted into what with executives and industry groups on how requiring people to wear a face covering said he will decide how has been described as to assess the financial damage. when in a public setting where they can and when to lift the restrictions. mismanagement of the coronavirus come into contact with others. pandemic by the WHO. It is not clear The news comes as people are starting to Governors in the US have announced cooperative whether the government would protest against extended stay-at-home The order, effective Friday, would apply initiatives to reopen their regions’ economies. unilaterally slash funding. In February, orders in some states. to people shopping in stores and using Several states such as Washington, Oregon and the WHO had advised against public transit. Coverings could include California have said they will be working together imposing travel restrictions to places medical masks as well as bandanas or to reveal their plans. with outbreaks of the coronavirus, scarfs. There could eventually be civil saying it was not an effective way penalties for people who don’t comply. Analysts foresee a fractured response from state combat its spread. and federal officials in the coming weeks and forecast a long and slow road to recovery.

Source: New York Times, WSJ, Washington Post

Government Under Severe Pressure 6.6M Unemployed Last Week, Government Struggles with Aid to Get Back to Business

st • May 1 Opening: While President Trump had earlier hoped to • Unemployment: The US Department of Labor reported that 6.6M people filed for unemployment this week restart the country by Easter, the administration is now pushing to bringing the total to around 16M. The economic shutdown has taken at least a quarter of the US economy reopen much of the country next month - May 1st. This has raised offline. The slowdown is being driven largely by two industries: real estate and retail. In some industries, concerns among health experts and economists about a resurgence including food services like restaurants and bars, as well as arts and entertainment, output has fallen by of the virus. However, the government is concerned about a three-quarters. declining economy and President Trump has sought a strategy for resuming business activity by May 1. • SMBs Struggle with Aid: Many small businesses worry that the $350B allocated is not enough. The • Small Business Loans Exhausted: The Small Business applications opened last Friday, April 3rd. Bank of America received 178,000 applications from small Administration said it had approved more than 1.5M loans valued at businesses seeking $32.9B in loans. Wells Fargo hadn't formally started taking application but by Monday more than $324B as of late Wednesday and loans were continuing morning, enquiries suggested it had already reached the $10B cap it had set for loans under the program. to be processed. The fund needs about $10B to cover processing The government is also facing issues with implementing the $2T aid package. and fees. Congress hasn't been able to come to a consensus on inclusions for an expanded stimulus. President Trump has said the • Companies Use Aid Package to Furlough or Lay Off Employees: Companies are using the aid Congress needs to focus on the additional $250B before moving on package as a reason to furlough or lay off staff, saying the stimulus package allows them to cut payroll costs to other spending. without feeling they are abandoning their employees. The new stimulus package will give employees who • IRS Extensions: The IRS has extended more tax-filing and have been laid off or had their hours cut an extra $600 each week for up to 4 months on top of their state’s payment deadlines to July 15. They include estate-tax returns, regular unemployment payments. $600 is the equivalent of working 40 hours a week at $15 an hour vs. quarterly estimated income taxes and tax returns for nonprofits. $7.25 and hour for someone working full-time normally.

Source: New York Times

• This week, health-tech companies announced they are • General Motors announced this week that it is now set to • Allstate said it would dispatch more than $600M in looking to create a Covid-19 patients registry. Datavant provide 30,000 ventilators to the nation’s stockpile for shelter-in-place payback checks, while American Family Inc., Allscripts Healthcare Solutions, and Change $489M by the end of August. Mutual Insurance Co. said it is returning $200M to its Healthcare will work on the project. The initiative is one • Automakers like Nissan and Renault announced they are smaller policyholder base. State Farm also rolled out a of several sources of data the federal government is struggling with sales in the US, but some carmakers like $2B Consumer relief program owed on 40M considering to monitor the spread of coronavirus in the BMW said they are seeing signs of improvement as China vehicles. State Farm's “Good Neighbor Relief Program” US. comes back online. offers a 25% policy credit on premiums due from March • UnitedHealth Group announced it is accelerating • VW announced it will furlough 1500 workers in Tennessee. 20 through May 31, or about $20 a month for each payments to doctors and hospitals, starting with about Honda, Nissan, BMW have all announced furloughs as well. vehicle insured. The average annual State Farm auto $2B over the next week to ease a cash crunch, which premium is approximately $950 a year. has led some healthcare providers to furlough workers. • Xerox Holdings Corp. is pulling the plug on its hostile bid • CVS Health Corp. will offer drive-through testing. CVS to buy larger rival HP Inc. after the coronavirus will use a test by Abbott Laboratories that can detect Travel and Hospitality pandemic undermined the copier maker’s ability to pull the virus in a patient sample in 5 minutes and return off the debt-laden merger. • Airlines are trying alternatives like negotiating with unions, negative results in 13 minutes. • JPMorgan Chase is the first major US bank to show how and scrounging for business like flying cargo. Boeing is • Microsoft Corp. co-founder Bill Gates said his the spreading coronavirus has affected its lending planning to reduce its workforce by 10%. The Treasury foundation will fund construction of factories for 7 of activity. Q1 profit fell 69% and it set aside $6.8B to cover discussed plans to assist airlines, which are eligible for grants, the most promising efforts to develop a vaccine to potential losses on loans to consumers and businesses but companies say they still need more cash. combat the novel coronavirus. struggling to stay afloat during the coronavirus • Cruise lines, on the other hand, are not covered by the $2T shutdown. bailout plan. They are looking to raise money elsewhere. • Airbnb has seen its $50B valuation plummet from $150 per share to $90 per share.

Source: New York Times

The Wall Street Journal and 1. Forecasted Profits Withdrawn MyLogIQ analyzed public filings • Airlines were among the first companies to issue guidance, though retailers now account for about a quarter of the 295 for companies in the S&P companies that pulled their profit or sales forecasts as of April 10. Composite 1500 Index which covers about 90% of US market capitalization—to assess the impact thus far. J.C. Penney withdrew its outlook on the same day it drew down Key Findings: its credit line.

• Almost 300 companies withdrew their financial 2. Credit Drawdowns guidance. • As companies closed stores or reduced services, they rushed to draw down existing credit lines or take out new ones. • Nearly 260 companies did one of those things in the past month, adding almost $221B in new debt. • About 175 companies suspended stock buybacks or cut their dividend. Ford announced multiple financial • 100 firms that together employ changes, including some 3M people said they drawing down credit, on would furlough workers. the same day.

3. Stock Buyback/Dividend Cuts 5. Furloughs and Layoffs

• About 70 companies have suspended dividend payments, and 103 firms have eliminated stock buybacks to preserve • One hundred companies announced plans to furlough cash. employees, and 74 of them came in the past two weeks. • Consumer-services companies, including airlines, hotels and retailers, make up most of that group. • Together these companies employed around 3M workers in 2019.

Delta Air Lines Inc. was the first company in the industrials sector to The Cheesecake Factory Inc. was one suspend share repurchases. of many that furloughed workers.

4. Executive Pay Cuts

• Executives at 145 companies have given up their base salary or part of it.

Royal Caribbean Cruises Ltd. said its chief executive would forego his base salary between April 1 and Sept. 30.

© 2020 Dentsu Aegis Network 16 Impacts on US Foot Traffic The government’s March Retail Report showed the biggest decline in sales in three decades of record-keeping. But the 8.7 percent drop, driven by increasingly wary shoppers and shuttered stores, bars, and restaurants, is likely only the beginning of the decline we can expect to see as most states didn’t shut down nonessential businesses until late March or early April. Airports, Automotive US Foot Traffic Continues Even As Grocery Stores Field Restaurant Industry Foot Long Lines, Crowd Control Foot Traffic Continues to to Drop Traffic Crippled Measures Cut Foot Traffic Decline Rapidly

As expected, foot traffic in all Essential businesses, grocery stores Under most of the stay-at-home As non-essential travels plummets, observed industries continues to and big box stores continue to enforce orders, restaurants are operating only foot traffic to national airports has decline. crowd control and limited store hours on take-out or delivery. While the foot decreased by 89% from the week of to reinforce social distancing. While traffic to QSR remained stable in the 1/20. For recreational activities and travel, these changes contributed to the most recent week (3/23-4/5), foot foot traffic is down nearly 100% since Visitations to auto dealerships have overall decrease in foot traffic, the rate traffic to CDR continued to decline as the first case in the U.S. was of decline seemed to slow down in the they are less-equipped for takeout decreased by 76% from the week of announced on 1/20. More specifically, 1/20 and is expected to continue until most recent week. However, it is too orders. foot traffic to shopping malls and the situation is under control and early to call it the ”new normal”. movie theaters has decreased by 95% Foot traffic to QSR and CDR has consumer confidence returns. and 97%, respectively, in comparison Foot traffic to grocery stores and big declined by 49% and 91% to the week of 1/20, the first box stores has decreased by 35% and respectively, in comparison to the confirmed case in the US. 37%, respectively, in comparison to week of 1/20. the week of 1/20.

Source: NinthDecimal, New York Times

Social Media Conversations

• Mentions have decreased around 1M from 4/15 indicating further drop in conversation as users may be feeling content fatigue. Top areas of conversations that people were passionate about included: • Small businesses being shut down • Sports events being cancelled • Number of deaths in local areas • Work from home • Conversation remains negative due to mentions of disease, deaths and crisis.

Source: Netbase

© 2020 Dentsu Aegis Network 18 Dentsu Media Marketplace Tracker April 16th Edition This Week’s Media Marketplace Focus: Gaming & eSports This week’s Media Marketplace Tracker focuses on Gaming & eSports, genres which are truly having a moment right now, offering a unique opportunity for marketers to connect with this sizeable and growing fan base, as the entire traditional Sports world remains on “pause.”

THE OPPORTUNITY Cancellation of live events and suspension of sports leagues have forced traditional sponsor brands (and their agencies) with significant media presence in live broadcasts into contingency planning.

Social distancing has led to a significant uptick in gaming participation, stream viewership, and opportunity for brands to stay connected, or begin connecting, with fanbases.

DENTSU POV The shutdown of professional sports and rise of social distancing provides brands an opportunity in eSports and Gaming – but not without careful planning and thoughtful messaging.

Gamers are sponsor-savvy and know when they are being treated as “test subjects” by brands who are piloting initiatives. A single execution during a pandemic won’t cut it – brands should be prepared to show commitment to this space & fan base for the long term.

Our partners from MKTG have prepared a short overview on the space to educate you and your clients on this fast-growing space.

20 eSports and Gaming are Mutually Exclusive And come with vast differences in market size and brand opportunities.

Gaming eSports

The action or practice of A form of competition playing video games. using video games.

Gamers or Gaming enthusiasts are eSports often takes the form of individuals who enjoy an array of titles, organized, multiplayer video game which can range from single player to competitions, particularly between multiplayer, and which may or may not professional players, individually or have a competitive element to them. as teams.

Source: MKTG

60% 57% 58%

50% 44%

40%

30%

20% 16% 10% 10% 8%

0% USA CAN MEX Gamers Esports Audience

Source: Newzoo 2019 Global Games Market Report

Source: Google Trends; March 2020; * NRG Human Truth Study of Mov iegoers; Streamlabs Blog, March 2020

QUICK GAMER FACTS

• 65% of American adults play video games daily and 64% of US households own a device used to play video games

• Younger gamers most interested in the prospect of becoming professionals, with 53 percent of 18-35’s wanting to turn Pro

• Gamers ages 18 to 45 prefer to play video games while those 46 and older prefer watching movies and TV shows

Source: MKTG

QUICK ESPORTS FACTS • Electronic sports (eSports) are organized video game contests held • The US eSports audience spends 6hrs/week consuming eSports on PC and console platforms (i.e. XBOX/PS) content, 20hrs/wk gaming, and 2hrs/wk watching TV

• Most popular titles are first-person shooters (FPS), • Watching gamers play video games online is more popular than real-time strategy, multi-player online battle arena (MOBA), and watching Sports for the 18 to 25 demographic Battle Royale games

• Beginning in 2010, eSports experienced exponential growth as • Gamers age 26-35 watch the most eSports tournaments, with the North Americans began to take a strong interest highest weekly viewing at 2.98 hrs/week

Source: MKTG, ESA, NewZoo & SuperData

Source: ESA, US Census Bureau estimates, & Statista

MEDIA CHANNELS

Source: MKTG

01.Find your unique audience 02. Unique opportunity to sponsor 03. Streaming personalities are a good within gaming and eSports eSports organizations with digital bet for integrated content competencies The gaming audience is more diverse than people Seven out of the ten most-watched channels in realize. Avoid being generic and targeting all A well-positioned organization can deliver March 2020 are individual streamers. Brands can “gamers” – find the overlap with your target engaging content via their talent and resources. work with these figures during this moment to consumer and ensure you speak authentically to Global teams like Faze Clan or 100 Thieves are raise awareness of social distancing and this audience. considered best-in-class. responsible behavior.

04. Broadcasters offer alternative 05. Show up for the long haul for mainstream media dollars According to a recent MKTG Canada study, Twitch, Mixer & YouTube are all experiencing eSports fans are 2x as likely to be loyal to an viewing spikes alongside streaming in-home eSports sponsor than trad. Sports fans entertainment. On March 28th, Twitch hosted are…while there IS opportunity in the short term, “Stream Aid 2020”, a livestream tournament to connect authentically, brands must show their event sponsored by P&G and Verizon. commitment to this audience and this space.

Source: MKTG

• Over the past two weeks, ESPN broadcast an NBA 2K players tournament, with notable players Devin Booker, Trae Young, Donovan Mitchell, and Kevin Durant playing against each other in 5v5 digital contests

• Debut telecast delivered 387,000, 366,000 and 131,000 viewers across ESPN and espn2 over three separate telecasts

• The NBA YouTube channel garnered almost 750,000 combined views across the tournament.

• The NBPA and 2K team donated $100,000 to a COVID-19 relief related effort of the winner's choice. Devin Booker won the event and chose the Arizona Food Bank Network and Direct Relief to receive the funding.

Source: MKTG

MKTG is your Dentsu resource to collaborate on strategizing, guiding and architecting your exploration of Gaming and eSports.

Our dedicated team will develop a strategic framework that will connect your brand across the ecosystem in a relevant and authentic way (not a logo slap), while remaining true to your brand’s equity and character.

To learn more, please contact:

• Kim Barrett, VP Client Service: [email protected] • Sam Riber, SVP Sports & Sponsorship: [email protected] Real-time Media Update Week of April 13 Media Usage Still Shifting, Illustrating Peoples’ Priorities At The Moment

Source: Comscore, Feb/Mar 2020

Gaming Focus: The number of minutes that Twitch users spent watching live content from gaming creators increased 20% between March 12 and March 25. During that two-week window, 26,000 gaming creators posted 132,000 livestreams, accounting for 20 million minutes (38 years) of content on the platform.

Source: Nielsen, March 2020 v s. 2019; Tubular March 2020

© 2020 Dentsu Aegis Network 35 Last Week New Mobile Video Streaming Service Quibi Launched…Encouraging (But Not “Blow Us Away”) Results; We Will Keep Watching Launch Stats: Mobile-ONLY (no TV app) Launch Stats: $4.99 with ads Est. ~1,150,000 Downloads Week 1, $7.99 no ads 87% from US* Debuting with 50 original series: ------High-quality episodes of 10 minutes Comparison: 12.5MM for Disney+ Week 1 or less per installment, designed for people to watch mobile / on-the-go Further reference, today subs = (or for now, in-between Zoom calls). Netflix = 167MM Global Subs Disney+ = 50MM Global Subs 10 Launch Partners, including: T-Mobile, Procter & Gamble, PepsiCo, Hulu = 30MM Global Subs Anheuser-Busch InBev, Walmart, Progressive, Google, Taco Bell, Discover and General Mills

Source: Adam Blacker, Apptopia Blog 4/13/20

Magazine subscription growth of +22% over last week • Orders generated from paid social, the magazine sites themselves, Amazon selling an increased amount of subscriptions

Major newspaper circulation heavily subscription based, circulation should remain steady or only slightly down • Washington Post and New York Times still printing 7 days a week

Reduction of workforce causing changes to publishing schedules – seeing combined June/July/August issues: • Elle: June -> June/July • Cosmopolitan: July -> July/August • Marie Claire: June -> Summer (June/July/August) • Oprah Mag: July -> July/August • Harper’s Bazaar: June/July -> Summer (June/July/August)

Source: Amplif i Integrated Publishing

Source: Google COVID-19 Community Mobility Report

“Our hiring rate in March was 1.1% lower year over year, which is the largest drop in LinkedIn’s hiring rate since January 2017. Looking at the trends month-over-month, March hiring was 1.3% lower. Through April, expecting we’ll “The hardest hit industries are, those dependent on close personal contact continue to see a downward or affected by public health closures: Recreation & Travel (-22.2%), Wellness trend as the impact spreads & Fitness (-20.9%), Nonprofit (-20.6%), Education (-18.9%), Retail (-18.6%), from major coastal cities to Entertainment (-17.8%). Also seeing significant decline in industries where other parts of the country.” purchases of bigger ticket items can be delayed: Real Estate (-19.7%), Durable consumer goods (-19.7%).”

Source: Linkedin, Oct ‘19-Mar ‘20

Source: Pinterest, Changes are calculated using US searches f rom 3/11/20 - 3/24/20 compared to 2/26/20 - 3/10/20

CPCs in Paid Search continue to be relatively stable across most verticals

Source: iProspect, weeks of 2/3 – 4/7/20

CTRs in Social have been increasing in the past week or two across most verticals

Source: iProspect, weeks of 2/3 – 4/7/20

Source: Dentsu Aegis Network, Amnet Programmatic Data

As the scale and impact of the COVID-19 outbreak gains speed, unfolding at different paces throughout the country, consumer attitudes and preferences are evolving in tandem. To help marketers navigate the shifting road ahead, Dentsu will be regularly publishing findings from a consumer survey (weekly in the near-term). We will map how consumers are moving through and responding to the various stages of the crisis and how brands can best respond. This is the third iteration of Dentsu’s COVID Crisis Navigator. The content highlights the shifts in consumer behavior and sentiment since the previous report, interpreting what those signals mean for advertisers and marketers. 1. In Short: Trends Week-to-Week

2. A Framework For Understanding Consumers’ Response

3. Consumer Concern Shifts As Economy Continues Slide

4. Time Spent With Media Hits A Saturation Point Selection of 5. Need For Normalcy, Freedom, Leadership Rises Each Week

Findings: 6. Consumers Are Paying Close Attention To Brand Responses

7. Consumers’ Return-to-normal Expectations At Odds With Experts

8. How Brands Can Reach Consumers In Different Stages

9. Key Themes & Implications for Marketers

47 1. In Short: Trends Week-to-Week Week over week, we have watched America progress through the stages of a new crisis:

Week 1: Figuring it Out The last week in March, COVID was the number one thing on consumers’ minds. Although the health crisis appeared to be worsening, consumers still felt they had control over their personal lives and finances. We saw them grapple with how they should feel (neither positive nor negative) and a growing expectation for brands to help navigate the new normal started to emerge. Week 2: Uncertainty at its Peak Faced with job loss and economic uncertainty, consumer outlook rapidly deteriorated in week 2. They were still worried about the health crisis, but felt they were losing control over their personal lives and finances as well. Media consumption hit an all time high as consumers sought distraction from what they viewed as a worsening situation. Brands were expected to respond and applauded for taking action. Week 3: In Search of Stability This week, we see a nation in search of stability. Sentiment is trending slightly less negative as consumers fight to regain control. We see spending patterns flatten, time spent with media reach a saturation point, and a heightened desire for normalcy. Consumers not only expect brands to act, but they are paying close attention to what brands say and do in response to the pandemic. 2a. A Framework For Understanding Consumers’ Response Often, responses to pandemics follow a pattern. As the effects of COVID-19 impact communities at different rates, these stages can act as a guide to shifting public sentiment – though consumers may not always experience them linearly.

The Stages of Crisis Response

POST- INITIAL SHOCK COMING TO GRIPS LIVING A NEW MOVING INTO NORMAL RECOVERY CORONAVIRUS LIFE The outbreak is I am modifying my daily I am moving towards settling I feel there has been I am fully reconnected to work spreading. I am uncertain routine. There are moments into a new routine while the progress to reduce the and life without having the threat about how it might impact of frustration and anxiety, outbreak is evolving. My outbreak in the nation and of the outbreak hanging over my day to day life. I am but I’m trying to focus on routine is starting to feel my community. I am slowly me. I am back to my routine feeling confusion, fear or what I can control. familiar. starting the journey back to from before. anger about preparing. my normal routines and schedules.

Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted March 27-29; April 3-4; April 9-12, 2020, respectiv ely

© 2020 Dentsu Aegis Network 49 2b. ‘Progression’ Amid The Pandemic Is Increasingly Complex As the pandemic threatens other aspect beyond public health (the economy, politics), consumers are wrapping their heads around multiple crises at once. This week, people identifying with Coming to Grips disperse and do not appear to move linearly: Some slide back into shock, while others are able to move forward.

% of respondents who identify with each stage:

INITIAL SHOCK COMING TO GRIPS LIVING A NEW NORMAL MOVING INTO RECOVERY POST- CORONAVIRUS LIFE

MAR. 27-29 24% 33% 26% 10% 7%

APR.3-4 25% 42% 25% 3% 4% APR.9-12 27% 32% 28% 5% 7%

Q. When it comes to a public health crisis such as the COVID-19/coronav irus outbreak, there are of ten “phases” of how the response unf olds. Thinking about how the outbreak has impacted y ou and y our daily lif e, which of the f ollowing phases best describes y our current situation? Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted March 27-29; April 3-4; April 9-12, 2020, respectiv ely

© 2020 Dentsu Aegis Network 50 3. Consumer Concern Shifts As Economy Continues Slide The health crisis is still a top concern, but there is less panic about catching the virus. In line with the idea that consumers are grappling with multiple crises as fallout of the outbreak continues, the economy is now their most pressing concern.

Most Concerning Aspects of the Crisis Ranking week of Ranking week of (Top 5) April 9-10 April 3-4

The country’s economy #1 (48%) #2 (46%)

Family/friends catching Coronavirus #2 (43%) #1 (52%)

The health crisis in the US #3 (42%) #3 (45%)

Knowing when the crisis will end #4 (42%) #5 (44%)

Catching coronavirus myself #5 (40%) #4 (45%)

Q. Which of the f ollowing things are y ou most concerned about at the moment? Please select all that apply . Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted March 27-29; April 3-4; April 9-12, 2020, respectiv ely

© 2020 Dentsu Aegis Network 51 4. Time Spent With Media Hits A Saturation Point After continued gains over two weeks, net time spent with media starts to drop. While respondents are still spending more time than they normally would, there is only so much media one can consume. Analog rising; digital threshold has been reached.

Net Increase/Decrease in Media Use Compared to Normal (% who said they are spending more time subtracted by % who said they are spending less time with select media)

Apr. 9-12 Apr. 3-4 Mar. 27-29

+49 50 +46 +46 +42 +40 +40 +41 +37 +39 40 +37 +32 +32 +32 +35 +35 +33 +28 30 +31 +31 +30 +23 +25 +20 20 +15 +12 +15 +9 10 +6 +5 +4 +4 +3 0 0 Video chat or Streaming video Streaming Social media Online news Live TV messaging Online video Recorded TV Newspapers Magazines Radio services audio/music services Apr. 9-12 35 35 33 31 31 30 25 15 15 12 0 Apr. 3-4 46 49 46 40 42 41 32 23 9 6 3 Mar. 27-29 40 37 39 32 37 32 28 20 4 4 5

Q. Are y ou currently spending more, less, or the same amount of time using the f ollowing compared to how much y ou normally would? *Of those who said they use the f ollowing. Net intent was calculated by subtracting the percentage of those who said they are spending more time f rom the percentage of those who said they are spending less time on each of the f ollowing. Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted March 27-29; April 3-4; April 9-12, 2020, respectiv ely

© 2020 Dentsu Aegis Network 52 5. Need For Normalcy, Freedom, Leadership Rises Each Week As life remains upended, need states related to finding a path back to “normal” life are becoming more important to respondents. Current Need States (Respondents asked to select up to 3 answers)

Apr. 9-12 Apr. 3-4 Mar. 27-29 Since Mar. 27-29

39% +5 36% 36% +3

28% 27% +3 25% 25% 25% 24% 24% 23% 23%23%23% 22% 22% 22% 21% 21%21% 21% 20% 19% 19% 18% 17%17% 17% 16% 16% 16% 15% 15%15% 15%15% 15%15% 14% 14%14% 14% 12% 12% 10%

SECURITY NORMALCY FREEDOM POSITIVITY REASSURANCE DISTRACTION STABILITY LEADERSHIP INFORMATION FUN INSPIRATION COMPANIONSHIP EMPOWERMENT SUPPORT BELONGING

Q. Thinking about how y ou are currently f eeling about the COVID-19/coronav irus outbreak, what are the top three things y ou need right now? Please select up to three choices. Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted March 27-29; April 3-4; April 9-12, 2020, respectiv ely

© 2020 Dentsu Aegis Network 53 6. Consumers Are Paying Close Attention To Brand Responses Attention – and scrutiny – of what brands are doing/saying is heightened in the current climate. At the same time there is a sizeable appetite for more COVID-response ads.

Attention Paid to Brands Right Now Feelings Towards # of COVID-19-Related Ads Seen

I am paying MORE attention to what brands are doing/saying right 32% There’s too few of now them 27%

I am paying LESS attention 52% to what brands are There’s just enough of doing/saying right now 49% them

I am paying the SAME amount of attention as There’s too many of usual to what brands are 18% them 21% doing/saying right now

Q. Which of the f ollowing best applies to y ou? Q. How do y ou f eel about the number of ads y ou see related to brands responding to COVID-19? Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted March 27-29; April 3-4; April 9-12, 2020, respectiv ely

© 2020 Dentsu Aegis Network 54 7. Consumers’ Return-to-Normal Expectations At Odds With Experts A majority believe things will “return to normal” by the end of the year and 55% by the July Fourth holiday, a sharp contrast with the timeline needed for a vaccine – likely 12-18 months – and the standings of public health officials on lifting social distancing measures.

When Consumers Think Life Will “Return to Normal”

Beginning of May 23% 55% July Fourth 32% By July Fourth

 Labor Day 16% 77% New Year’s 6%  By 2021

2️⃣ 0️⃣ 2️⃣ 1️⃣ Sometime next year 12%

⛔It won’t return to normal 11%

Q. Based on the news and updates f rom the gov ernment and health authorities, which of the f ollowing best matches how long y ou think it will take f or our way of lif e to return mostly to normal? Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panels, conducted April 9-12, 2020

© 2020 Dentsu Aegis Network 55 8. How Brands Can Reach Consumers In Different Stages Brands can tailor their communications to speak to consumers in different stages of Social Response. Consumer profiles and full analysis can be found in the full report.

INITIAL SHOCK COMING TO GRIPS LIVING A NEW NORMAL

Consumers are still feeling Consumers are overwhelmed negative and need help Consumers have adjusted as and in survival mode. Brands managing their daily best they can and need should help them cope with lives…but they are ready for brands to act as leaders. the severity of the situation a little fun too. Brands can Demonstrate action at macro by offering empowerment, offer value by acknowledging level (help with crisis) and support, and information at what they are going through micro level (add magic to the the local level. and helping them navigate mundane) their new lives.

BRAND ACTION: BRAND ACTION: SUPPORT BRAND ACTION: HELP LEAD & UPLIFT

• Acknowledge the crisis • Tackle larger issues • Empower me to find my way out • Reassure me • Uplift my new ‘normal’ • Don’t overwhelm me • Help me get through my day (& • Enhance my routine • Inform & connect at the local level uplift it)

Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online surv ey panel, conducted f rom March 27-29, 2020.

© 2020 Dentsu Aegis Network 56 • Consumers seek a greater level of control: Sentiment is trending slightly less negative as consumers fight to stay in control, but there is still a large group who feel helpless. Brands are now expected to help consumers manage their lives. Brands that exceed expectations are taking a leadership position in helping tackle macro issues (donating, helping).

• Need states continue to trend toward normalcy: Need states associated with pre-COVID life continue to increase in importance – normalcy, freedom and companionship. Consumers are missing everyday interactions and are ready to infuse some fun into their routines. Brands who help consumers feel ‘normal’ and uplifted will win favor.

• Impact is felt closest to home: Consumers are expressing higher satisfaction in responses from Key Themes & local government and fellow citizens. Most consumer groups feel isolated and are craving connection. Consider localizing communications and defining your brand’s role in bringing Implications communities together. • Time spent with media is reaching its threshold: Time spent with media is flattening out, for Marketers: particularly with digital. There is a slight increase in time spent with non-digital media like Newspapers and Magazines. Brands should be cautious of ‘media-burnout’ and manage frequency levels during this busy time.

• Staying silent is saying something: Consumers are paying closer attention to advertising than ever before. They are actively looking to see how brands respond, especially younger consumers. Consider how your brand message can drive relevance and make a meaningful difference.

• Experiences matter more than ever: Consumers have settled into new routines and are now looking for fun and inspiration. Brands should consider how they can enhance consumers’ lives as new routines become mundane.

57 Survey Methodology

This survey was administered through Toluna, an online research panel, between April 9-12, 2020. Conducted by Dentsu, this survey was distributed For more information: among a random sample of 900+ respondents, aged [email protected] 18-64 years old and residing in the United States. The survey controlled for nationally representative weighting across age, gender and ethnicity. Additionally, respondents represented a variety of backgrounds: educational, wealth and geographic. Cultural and Consumer Behavior Trends and Insights April 16th Edition Rising Trends

Relaxing the Rules Relaxing the Rules Relaxing the Rules Relaxing the Rules of Screen Time of the Pantry of Pop Culture of Privacy

The concept of a “digital-detox” seems like a relic of the past as our interactions go virtual.

© 2020 Dentsu Aegis Network 61 Screen Time: From Necessary Evil to Necessary Essential Before all this, we questioned time spent on our devices, even taking proactive “digital detoxes.” Now? Stay-at-home orders have propelled us into digital for every interaction.

Not too long ago we were taking steps Now, guilt over screen-time is down… Time spent with media is up to limit screen time… Net Increase/ Decrease “Now I have thrown off the shackles of Media In Time Spent Since the Outbreak screen-time guilt. My television is on. My computer is open. My phone is Streaming video services +49 unlocked, glittering. I want to be covered in screens. If I had a virtual Online news +46 reality headset nearby, I would strap it on.” Social media +46

Video chat or messaging +42 services 70% 40% Online video +41 Of U.S. adults have tried to Of U.S. adults are considering Live TV +40 moderate their screen time in purchasing new media subscriptions some way. to pass the time. Streaming music/audio +32

Source: Global Web Index, The New York Times, Dentsu COVID-19 Nav igator, conducted April 3-4, 2020

Ubiquity of virtual experiences is Highlighting the magic of physical In Their Own Words: causing fatigue… interactions & sensations… Everyday Life Experiences

“By all of us suddenly guzzling “Go for a leisurely shopping screen time, we might start to trip” see the limitations of its high.

Now that touch is the rarest thing of all, I crave it. The “Go to the mall and hang out with friends” first thing I want to do when this is done is high-five every stranger I meet.” “Go to Barnes & Noble to people watch”

Source: The New York Times, Dentsu COVID-19 Nav igator, conducted April 3-4, 2020

Dentsu POV: Rewritten for good, but not in the way we might think. Rather than swinging decisively towards virtual or physical experiences, a mix of the two will emerge. In some cases tangible, sensory experiences will be placed on premium and in others, virtual experiences may democratize and enhance access. Rising Trends

Relaxing the Rules Relaxing the Rules Relaxing the Rules Relaxing the Rules of Screen Time of the Pantry of Pop Culture of Privacy

The concept of a “digital-detox” seems Consumers want food that’s like a relic of the past as our comforting and practical – letting interactions go virtual. brands spurned by health trends back into the kitchen.

© 2020 Dentsu Aegis Network 65 The Pandemic-Pantry Is Challenging Health Food Trends Americans are suddenly finding room in their pantries for previously shunned treats that are equal parts practical and comfort-inducing.

Simple, nostalgic and shelf-stable buys have seen a spike in purchase, often Consumers are returning to legacy brands and many even at the expense of less fresh and organic produce… purchasing for the first time.

“We don’t normally have chips at home. But now we have Doritos and Cheetos. Chips made with orange stuff… We are relaxing some of the rules during this stressful time just to get through it,” says Connie Huynh. +59% +52% +23% sales sales sales

Source: The New York Times; Google Coronav irus Dashboard

Dentsu POV: Just for now. While consumers may find one or two new “comforting” food brands they stay loyal to, the value of “being healthy” will be heightened post-pandemic, further fueling healthy diet & living trends. Rising Trends

Relaxing the Rules Relaxing the Rules Relaxing the Rules Relaxing the Rules of Screen Time of the Pantry of Pop Culture of Privacy

The concept of a “digital-detox” seems Consumers want food that’s As the stalwarts of pop culture – talk like a relic of the past as our comforting and practical – letting show hosts, celebrities – also find interactions go virtual. brands spurned by health trends back themselves impacted, the content they into the kitchen. create is changing.

© 2020 Dentsu Aegis Network 68 TIRED: Polished Shots; WIRED: Sweatpant Aesthetic With production teams and content creators at home, mainstream media is no longer well-lit and sleekly produced, but reflects our collective reality as it evolves to the situation at hand.

Emerging platforms have given rise to less Overnight, a switch has been flipped on the concept of what polished-user based content… “professional” visual entertainment looks like

“Maybe that’s the format that works for us. Maybe it’s the more intimate type of late-night show, more of a hangout.”

Fallon says of The Tonight Show post-pandemic.

Source: Buzzf eed News, “Af ter Coronav irus It Will Not Go Back to Normal.”; Vulture, “At Home (Where Else?) With Jimmy Fallon. ”

Dentsu POV: Rewritten for good. The casual aesthetic and openness with which stars have given people direct access to them is compelling beyond this moment – and has implications for brands as well. For years now consumers have gravitated towards more humanized, relatable and behind-the-scenes content and personalities. Rising Trends

Relaxing the Rules Relaxing the Rules Relaxing the Rules Relaxing the Rules of Screen Time of the Pantry of Pop Culture of Privacy

The concept of a “digital-detox” seems Consumers want food that’s As the stalwarts of pop culture –talk Just as privacy concerns were like a relic of the past as our comforting and practical – letting show hosts, celebrities – also find transforming into consumer action, interactions go virtual. brands spurned by health trends back themselves impacted, the content they COVID is challenging the right to into the kitchen. create is changing. privacy.

© 2020 Dentsu Aegis Network 71 The Right to Privacy is Being Called into Question Amid the pandemic, some surveys show that consumers' willingness to give up some privacy in exchange for safety is growing.

In recent years, consumers awakened to Seeing shifts in comfort levels to combat Will privacy be exchanged for safety? privacy concerns… the outbreak…

Consumer concern about privacy and data protection

81% of respondents are either “extremely” or “very concerned”

Not at all concerned Slightly concerned Moderately concerned Very Concerned Extremely concerned

Source: Dentsu online consumer surv ey - Priv acy, Feb 2020

Dentsu POV: Just for now. Consumer concern over privacy will remain high and they may be even more discerning about sharing data. They were already considering what exchange was worth it. Personalization? Compensation? Safety has added another element into the mix and will likely heighten the notion of earning personal data by having a true reason (that benefits consumers) to collect and use it. Rising Trends

Relaxing the Rules Relaxing the Rules Relaxing the Rules Relaxing the Rules of Screen Time of the Pantry of Pop Culture of Privacy

• People will likely reassess pre-crisis behaviors. • Work to identify pre-crisis behaviors within your category that have been impacted by the circumstances of COVID. Prioritize tracking consumer behavior shifts and be ready to anticipate how consumption habits and other behaviors will continue to evolve post-crisis.

• Act in more agile ways for short- and long-term planning. • Build rapid response operating models both internally and with agency partners. Quickly pivot strategic thinking and creative as circumstances change, while identifying and tracking long-term goals.

• Treat consumers as your North Star. • Regardless of how consumer behaviors shift, following that behavior and meeting consumers where they are will benefits brands. Take a people-based approach to planning.

75 Insights and Implications by Industry Vertical April 16th Edition Financial Services High-Tech & B2B Slide 78 Slide 103

Media & Entertainment Health & Wellness Slide 82 Slide 113

Travel & Hospitality CPG Slide 86 Slide 117

Auto Restaurants Slide 90 Slide 121

Retail Insurance Slide 94 Slide 126

Luxury & Beauty Non-Profit Slide 101 Slide 129

77 Increased 401k Activity, Negative Real Estate Outlook • Nearly three-quarters of Americans say the coronavirus pandemic has reduced their family’s income, with nearly half saying they would be without any income at all if they were unable to work because of illness. • Net trading activity within 401(k) accounts spiked to record highs in March. The total amount of money transfers, as a percentage of an account’s starting balance, was the highest since October 2008. • Nearly half of the 401(k) outflows were from target-date funds. 29% were from large U.S. equity funds. Almost two-thirds of 401(k) money flowed into stable value funds, and almost a quarter into money market funds. 6% went into bond funds. • 401(k) participants near or in retirement generated the greatest increase in activity last month in target-date funds. • 55% of investors expect the severe economic impact of the crisis to have ended by Q3 2020. • However, only 15% of investors expect the S&P 500 to have returned to earnings growth by then. Most investors (60%) are bearish for the remainder of 2020 but they are increasingly bullish for 2021 and 2022. 85% of investors expect the shape of the economic recovery to be a U, L, or W and not a V. • Weekly mortgage applications dropped by 17.9% in the last week of March. • Applications to refinance a home loan dropped 19% from the previous week but were 144% higher than a year Financial ago. Mortgage applications to purchase a home continued to decline, falling 12% for the week and 33% YoY. • The numbers were far worse in states hardest hit by COVID-19. Purchase applications fell 47.5% annually in California, 55.4% in New York and 59.9% in Washington state. Services • 37% of buyers looking to buy in the next six months reported having to postpone their purchase as a result of the pandemic. As for sellers, 44% planned to postpone their sale and 60% felt less optimistic about home selling as a result of the pandemic. • Net inflows into sustainable ETFs totaled $14B as of March 24, already more than half of 2019’s full-year figure. Cloud Computing, Streaming Services & Social Media, and ESG Investing also fielded net inflows. • This Week’s Headlines: • Homeowners seek a mortgage reprieve: Mortgage relief requests jumped from 0.25% to 2.66% between March 2 and April 1. Mass mortgage relief could leave mortgage servicers with a liquidity shortfall of as much as $100B in the next nine months. • Banks are fielding massive small business loan requests: While the Small Business Administration (SBA) and Source: Boston Consulting Group, Aite Group, Financial Times, CNBC, Bloomberg, Reuters, Mintel, JDPow er, The Financial the US Treasury are officially administering the $350B loan program, banks are handling applications. On Bank Brand of America’s first day of applications (April 3rd), over 85,000 people applied for $22.2B in loans, prompting the lender to limit applications to customers only. Brand Actions | Financial Services

The online small business lender launched a Citigroup is offering mini online concerts to its Supports aid to those affected by the service that allows any business to sign up corporate and institutional clients. The bank’s Velocity coronavirus in Asia, partnering with and sell gift certificates to consumers for platform is typically used by clients to trade stocks, Give2Asia by giving medical supplies and future use at their retail locations. Small bonds and foreign exchange, access research and meals to NGO staff and patients that respond businesses on the platform can sell gift listen to discussions on politics and economics. As to coronavirus outbreaks across Asia certificates ranging from $15 to $500. lockdowns caused people to work remotely, Citigroup will now offer prerecorded videos of musicians playing classical music, once a week as part of a series.

WalletHub. Arvest Bank. Frost Bank. Updated customers on types of loans people in Arvest Bank updated customers on the mortgage Partnered with EVERFI to bring free digital learning each state are searching the most. relief options that they are providing to help families tools to students K-12 during this time when schools stay at home during this crisis. are shut and children are at home.

People’s United Bank. Wells Fargo. Chase. Created a Twitter handle for its customer Updated small business customers on the PPP Launched a Chase Chats webcast to help service team. Customers can just tweet their program. customers understand how they can stay issues at this handle instead of spending hours connected with Chase digitally. on the phone.

© 2020 Dentsu Aegis Network 81 As Shelter-in-Place Continues, Networks Become Creative In New Offerings • Shelter-in-place orders drive continued streaming service subscriber growth • Disney hit 50M paid subscribers globally, boosted by additional market rollout in eight Western European markets in the last two weeks. In the US, Disney+ has beat Netflix in recent US downloads for 2020 so far. • Quibi’s first day launch drew lighter subscription numbers than expected, with just 300K downloads, coming in at 7.5% of Disney Plus’ first-day subscriptions for the same territory. • Local market news ratings continue to soar, with 6PM news viewings up an average 61% and 10/11PM late news up an average of 45% versus February 2020. • While total streaming dipped very slightly in the final week of March, total streaming still represented more than 2x that of March 2019. • Live streaming continues to trend across news, music, and gaming. • Twitch users’ minutes spent watching live content from gaming creators increased 20% between March 12 and March 25. During this two-week window, 26,000 gaming creators posted 132,000 livestreams, accounting for 20 million minutes (38 years) of content on the platform • Print subscriptions are growing, with magazine subscription growth of 22% over the last week of March, with orders generated from paid social, magazine sites, and Amazon. Media & • The reduction of available workforce has affected magazine publishing schedules, with many publications combining June/July/August issues. Entertainment • If all 5,400 US theaters remain closed for 3 months, domestic grosses may struggle to hit $7B, a 20-year-plus low. • This Week’s Headlines: • More films may skip theatrical release, go directly to streaming channels: Disney’s Artemis Fowl moved directly onto Disney+, rather than its intended May 2020 theatrical release. • The Streaming Wars may be put on hold as free content takes over: Many media companies, such as HBO, AMC Networks, Amazon Prime Video, and Fox, are offering free content that is typically pay-walled. • Media companies start seeking cash cushions: Disney, Comcast, ViacomCBS, and Fox have tapped into the debt market for $6B, $4B, $2.5B, and $1.2B respectively. • The CBS series “All Rise” preparing to produce an all-virtual episode: The entire episode will use virtual footage shot in each of the series regular’s homes, producers using VFX to create necessary backgrounds, Source: iHeartMedia, Nielsen, AdWeek, SemRush, Axios, and a cinematographer operating solo from a vehicle to capture exterior footage. Protocol, Instagram, Forbes, Verizon, Digital Trends, Variety, Tubular • Movie theaters turn to streaming: Select multiplexes, such as Alamo Drafthouse, Film Forum, and the Angelika, have launched “virtual cinemas” to reach audiences at home. US Movie Theatre Foot Traffic Trends

Sesame Street has expanded its "Caring for The Spotify COVID-19 Music Relief project has Snapchat launched a set of filters to encourage Each Other" initiative with new content for been set up with charity partners like users to donate money to help fight COVID. The families around mental and physical health. The MusiCares to fundraise for artists. Spotify will AR filters allows users to scan 23 international videos include songs and information about how match donations to the relief fund up to a currency notes across 33 countries. The app will to properly wash hands and sneeze. Some of the collective total of $10 million and allow fans to then give people the option of donating directly to content also inspires learning in math, science, directly donate to individual artists. the UN COVID-19 Solidarity Response Fund reading and other areas of education. which supports the World Health Organization.

TikTok. CBS. Launched “small gestures” Launched “In this together” to help bring users closer to campaign which features actors their loved ones by from its hit shows to showcase showering them with gifts that we are all together in this and goodwill gestures. fight against Covid-19.

AccuRadio. Participant Media. Launched a new site Participant Media which produced the where listeners can find 2011 pandemic movie Contagion, news and resources launched "Control the Contagion" related to Covid-19. campaign where cast members educate listeners on how we can all beat the virus by following protocols. The campaign was retweeted by Prime Video where the movie is currently available.

© 2020 Dentsu Aegis Network 85 Airlines Seek Relief Grant, Rewriting of Carbon Deal • Airline travel has dropped 96%, as of April 9th. Only approximately one in ten seats on US domestic plans is occupied, and on the limited number of international flights operating, only one in five seats is occupied. • TSA officers screened approximately 95,000 people at US airport checkpoints on April 8th, a significant drop from the 2.3M screened on the same date last year. • As non-essential travel continues to diminish, foot traffic to US airports decreased by 89% from the week of 1/20. • Based on travel recovery following 9/11, it may take up to five years for travel and passenger numbers to return to 2019 numbers. Influencing factors include government fiscal stimulus packages, timing of a vaccine, and overall public health and economic outlooks. • On average, US airlines have enough cash to survive 8 months before they face bankruptcy or insolvency. • American Airlines, which carries the most debt among US airlines, only has enough cash for 4.8 months of expenses, while regional carrier SkyWest has enough cash to cover nearly a year. Travel & • Approximately 80% of hotel rooms in the US are empty. In the top 25 domestic markets, Oahu, Hawaii, saw the biggest occupancy decrease, down nearly 91% with an occupancy level of 7%. New York City occupancy fell more than 79% to about 18%, while Seattle dipped about 73% to 19.5%. Hospitality • This Week’s Headlines: • American, Delta, United and other US airlines apply for relief grant: A group of US airlines submitted applications on Friday, April 10th to the Treasury Department for government grants to avoid furloughing employees through September 30th. • Airlines lobby to rewrite carbon deal in light of coronavirus: Under the CORSIA emission mitigation approach developed by the International Civil Aviation Organization, airlines have to pay to offset any growth in carbon emissions above a baseline set by the average emissions of 2019 and 2020. The widespread current grounding of aircraft means the baseline will be far lower than anticipated, and the carbon targets much more challenging for the future.

Source: The Hill, USA Today , Skif t US Airport Foot Traffic Trends

Trying to make it easier for people who The Jamaica Tourist Board is using its digital Has suspended its marketing efforts as its are staying at home, Double Tree platform to throw virtual dance parties top executives take 50% salary cuts—with Hotels has released its coveted weekly over Instagram Live, as well as its founders agreeing to not take a salary for Chocolate Chip cookies recipe to the featuring cooking demos and wellness six months. CEO Brian Chesky also public. sessions like yoga and other relaxing self- promised to pay hosts $250 million to help care practices for people in quarantine. cover the cost of COVID-19 cancellations.

Cape Air. American Airlines. Given the current climate and the need Has started making face masks for fast, time-sensitive travel - from for its own employees at DFW personnel movement to ongoing relief International Airport and other logistics, Cape Air announced that its hubs after looking unsuccessfully personalized charter service can be for personal protective equipment used to build a completely on the open market. personalized travel itinerary, with service available to any of the cities served by Cape Air as well as select destinations outside their established routes. Drury Plaza Hotel. Hosted blood drives, in Universal Studios. partnership with American Universal Studios announced that Red Cross. it is going to keep US Theme Parks closed through at least May 31.

© 2020 Dentsu Aegis Network 89 Widespread Furloughs, Pay Cuts Across Automotive Industry • In March, US auto sales plunged to their lowest level in almost 10 years. Shutdowns have resulted in a 21% drop in vehicle sales to dealers versus Q1 2019. • GM reported a 7.1% decline in Q1 sales, while Fiat-Chrysler reported a 10.4% sales slide and Nissan reported a dramatic 29.6% YoY drop. Porsche, Hyundai, Volkswagen, and Honda reported similarly steep declines in auto sales. Kia was the main outlier, reporting approximately 1% increase in Q1 sales compared to 2019. • Ford expects to post a pre-tax loss of $600M for Q1. As of April 9, Ford said it had about $30B in cash on its balance sheet, including $15.4B it borrowed last month against two existing credit lines. • Concerns are also growing regarding Q2 and Q3 results and cash burn rates for various automakers, as the economic crisis worsens amidst long factory shutdowns and depressed consumer demand. • Used-vehicle auctions are virtually paralyzed, with fears around huge levels of supply piling up to create an imbalance and negative economic consequences for the market. Used-car sales fell 64% in the last week of March. Auction companies estimate that prices have fallen about 10% in recent weeks. • Attempting to mitigate these impacts on the wholesale market, GM and Ford are offering customers one-month lease extensions to delay the influx of off-lease vehicles headed to auction. Auto • If declines in sales and price continue, automaker giants, such as GM with over $30.4B worth of vehicles leased to customers, could face dire economic implications. If GM needs to boost its estimate of how much these leased vehicles will depreciate in value, each percentage point increase raises the firm’s expenses by $304 million. • Visits to auto dealerships decreased by 76% from the week of 1/20 and is expected to continue until the situation is under control and consumer confidence returns. • As dealerships scramble to connect with customers and drive sales digitally, analysts anticipate that 80% to 90% of American new car dealers will emerge from this crisis with full eCommerce capability by the end of 2020 • This Week’s Headlines: • Increasing layoffs, furloughing and pay cuts across automotive industry: All major automakers in the US are implementing pay cuts, layoffs and furloughing thousands of their employees to minimize operating costs, Source: USA Today , Ninth Decimal, Yahoo, CNBC, Car and Driv e including Tesla, Volkswagen, AutoNation, Honda, and Nissan. Auto Dealership Foot Traffic Trends

Lexus is running a campaign that highlights Audi released specially curated images for Cadillac aired a new spot to respond to the lack everything that they’re doing to stay ‘people video conferencing backdrops, “allowing Audi of financial security that many are feeling right first,’ including offering a variety of payment fans to enjoy the thrill of the road while now – letting customers know that they offer relief options for new and existing owners. working from home” flexible payment arrangements, OnStar crisis assist services, in vehicle Wi-Fi data and home delivery for new vehicle purchases

Volkswagen. BMW. Volkswagen dealer Toms River All major automakers are VW provides essential supplies to manufacturing some form of local retirement communities. medical device or personal protective equipment. BMW also shares a post about its efforts to produce masks for its workers and healthcare professionals.

Porsche. Hyundai. Launched a new campaign Hyundai is providing testing kits #DreamsAreMadeAtHome to Detroit authorities along with and asks people to share $100,000 in donations images or videos of their garage and car (any car, Local Hyundai dealership is any brand). providing complimentary labor for critical vehicle service of healthcare workers and first responders vehicle, of any make or model

© 2020 Dentsu Aegis Network 93 Against Declines in Discretionary Spending, Retailers Lobby Government for Relief • Amidst widespread store closures and almost 300M Americans under shelter-in-place orders, discretionary retail spending is estimated to decline by up to 50% for the first half of 2020. Fitch Ratings estimates retail sales to remain in decline during the second-half of 2020. Sales in 2021 are expected to be down as much as 10% from 2019 levels • American retail and its associated industries represent 52 million jobs — one in four of all workers — and almost $4 trillion worth of gross domestic product. Retail leaders warn that their industry, especially segments dependent on brick-and-mortar stores and discretionary shopping, will fail without government-supported relief. • A coalition of retail and fashion companies have begun discussions with government officials, asking for: (1) financing loans for real estate companies, so brands and department stores can have rent forgiven until they reopen; (2) grants that cover at least 80 percent of employee salaries if kept on payroll; and (3) tariff and duty relief for the next twelve months. • Essential retailers saw sharp sales gains in March, largely induced by panic-buying. Walmart sales surged 20% during the month of March and spiked 30% since the beginning of February, compared with the same period a year ago. Target also witnessed a 20% jump in YoY March sales. • Food and household goods sales drove these increases, while apparel sales declined. • In the last week of March, 37% Americans claimed they were digitally shopping for groceries more than the previous Retail week, a 7% WoW increase and a 26% increase from the first week of March. • This Week’s Headlines: • Retail report shows biggest decline in sales in three decades. Retail sales, which include purchases in stores and online as well as on auto, gasoline, and in bars and restaurants, plunged in March as businesses shuttered from coast to coast and shoppers restricted their spending, resulting in an 8.7% drop from the previous month– by far the largest in the nearly three decades the government has tracked the data. The outlook is expected to worsen next month as this data only represents the early weeks of the crisis. • Amazon hiring additional 75,000 workers after filling more than 100,000 positions in March: The company continues to hire warehouse and delivery workers amid a strong surge in online shopping during the pandemic. As it hires more workers, Amazon has also raised hourly pay and doubled overtime pay for warehouse employees.

Source: Fast Company , New York Times,Reuters, • Amazon stops accepting new online grocery customers: While working to add capacity each week, Amazon Retail Div e, Fitch Ratings will place all new online grocery customers on a waitlist. The Seattle giant will also further curtail shopping hours at some Whole Foods stores for the public so that its employees can fulfill online grocery orders faster. March Retail Sales in US Show Steepest Drop on Record

Note: Seasonally adjusted Note: The New York Times, The New York Times

The heritage brand has converted its New NIKE is making full-face shields and powered The grocery chain has launched a program to help York, North Carolina and Massachusetts air-purifying respirator lenses out of struggling local restaurants in Texas by selling their factories, now producing medical gear. The repurposed materials from footwear and entrees in its stores. Through the partnerships, goal is to turn out 150,000 masks per day apparel to help health care workers on the select H-E-B stores will sell ready-made meals from and make gowns for hospital personnel. frontlines. restaurant partners. All proceeds from the sales of these chef-prepared meals will go directly to the restaurants.

Walmart. Nike. Invites everyone to join the Nike spotlight the importance of staying home #WalmartWatchParty of in its most recent spot, “You Can’t Stop Us,” Trolls World Tour on their shot using still and video footage from homes Twitter on Friday. all around the world. The spot represents Nike’s much larger quarantine-era commitment to help people stay active under shelter-in-place orders, including livestreamed workouts from Nike Master Trainers and interactive competitions.

Neighborhood Goods. Anthropologie. introduces The Common – a free Shares ideas of “inviting outdoors platforms to support small in” when you can’t go out – businesses to help them to engage creative tips of making a flower- with customers, restart businesses crown is shared. and bring people back to work.

© 2020 Dentsu Aegis Network 100 Shifts in Consumer Buying Habits Causes Concern for Luxury Brands • Fashion executives remain focused on crisis management and how to eventually shift to reimagining their industry post-pandemic, taking into account the significant impacts of coronavirus on consumer spending. • Potential impacts of coronavirus on human consumption and buying patterns include shifts in types of items being purchased, such as fewer luxury items and more comfortable athleisure wear, while the economic consequences of the pandemic may also result in less money spent on luxury goods. • In Q1 2020, global luxury sales are predicted to suffer a YoY decline of 25% although there are signs of recovery in China. • Luxury is highly exposed to COVID-19, especially being as though Chinese consumers represent 35% of the global personal luxury goods market. But in an encouraging rebound, Hermès is said to have brought in at least 19 million renminbi, or $2.7 million, in sales on the reopening day of its flagship store in Guangzhou’s Taikoo Hui last week. Luxury brands hope that this signals potential for a strong recovery. • Experiential luxury (high-end hotels, resorts, cruises and restaurants) has been one of the most dynamic and fast- growing components of the luxury sector, which will begin to slow down in the short-term as consumers revert to Luxury buying goods over experiences. • As luxury remains a cash-rich sector with high profitability and margins, there is speculation that the better- capitalized groups, like Kering and LVMH, might accelerate M&A activity post-crisis. Targets might include & Beauty companies in financial distress with fragile balance sheets, publicly traded companies without a majority controlling shareholder (i.e. Burberry), and financially solid, family-controlled businesses (i.e. Chopard, Prada, and Chanel). • This Week’s Headlines: • More than 30 top beauty brands have joined the initiative to raise money and donate supplies to medical workers on the coronavirus frontlines: Several startups have teamed up to support health care workers during this pandemic. Gwyneth Paltrow, Drew Barrymore and Victoria Beckham were a few of the beauty founders to join this social fundraising campaign, BeautyUnited. BeautyUnited’s goal is to raise $10 million for the Frontline Responders Fund to provide protective equipment for all care workers. • To survive, luxury fashion must hibernate: Companies are advised to reduce their cost perimeters, to keep as many of their personnel and key assets as possible, while stopping virtually all manufacturing and Source: The Holly wood Reporter, Bain, McKinsey , sourcing to lower overhead costs. Business of Fashion, WWD, Vogue Business Brand Actions | Luxury & Beauty

Schwarzkopf USA launched a campaign The brand is putting its resources to use by Hermes is paying its 15,500 employees their and platform to help salons stay in taking excess fabric and turning them into mask regular salary without need for government business by enabling them to create and covers. To date, employees and factory teams intervention. The iconic brand is also donating sell digital vouchers for post-quarantine have created more than 27,000 of them, which €20 million to Paris' public hospitals, along with hair appointments. have been donated to healthcare workers at the 30 tons of hand sanitizer and 31,000 masks more than 60 organizations. produced in its factories.

© 2020 Dentsu Aegis Network 102 Rise in B2B Tech Demand, IT Spending, Digitization of Telecom • While there is decreased demand for some telecom brands YoY as the coronavirus progresses (-3% category decrease), COVID-19 has accelerated the digitization of telecom. • The shift to digital was already well underway prior to the pandemic. COVID-19 has underlined the criticality of telecom infrastructure, and the rise of remote working has triggered a wave of demand to build out business continuity and collaboration strategies, underpinned by a digital transformation agenda • Businesses expect COVID-19 to be a business trigger for increased IT spending in the future, with approximately 40% of ITDMs anticipating spending more on software in the future. • B2B technology brands are fielding increased demand YoY as the pandemic progresses (+5% Category Increase), with companies who offer diversified cloud services seeing the greatest increase in demand. • AWS leads YoY growth and now has 11% of the category brand intent. • This Week’s Headlines: • WhatsApp limits message forwarding to slow spread of coronavirus misinformation: WhatsApp tightened message forwarding limits, restricting users to sharing forwarded content one chat at a time after a jump in messages touting bogus medical advice since the start of the coronavirus crisis. High-Tech • Employers face tech gear shortages: Corporate technology leaders are facing shortages of laptops and other devices that have enabled the sudden shift to remote work. Even as China comes back online, surging global demand, coupled with the ripple effects of initial closures have made sourcing difficult. IBM & B2B CFO Fletcher Previn said supply chains are backed-up, with increasing demands for hardware devices, laptops, phones and tablets. Large enterprises that have ordered laptops and were originally experiencing a delay of three to four weeks could now expect delays of eight to nine weeks. • Google’s G Suite now has 6M paying businesses: Google’s G Suite bundle of productivity software had over 6M paying businesses in March, up from 5M inFebruary. G Suite faces competition from Microsoft’s Office suite, which held 87.5% of the market for productivity suites against Google’s 10.4% in 2018. • Google also made Meet and Google Classroom available to 1.3 million New York City students in just days as the city’s education department sought to stop the use of Zoom. • Free tool helps manufacturers map where COVID-19 impacts supply chain: Assent Compliance, a company that helps large manufacturers like GE and Rolls Royce manage complex supply chains through an online data exchange, announced a new tool this week that lets any company, whether a Source:: Venture Beat, Savanta, Wall Street Journal, Tech customer or not, upload bills of materials and see on a map where COVID-19 is having an impact on Crunch, CNBC their supply chain. How COVID-19 Is Fast-Tracking Emerging Tech? COVID-19 is helping accelerate the development and commercialization of several emerging technologies that previously received lukewarm public and/or government support. This is especially true for innovations that reduce human-to-human contact, automate processes and increase productivity amid social distancing.

Delivery Drones Telemedicine

• In China, JD.com, Pudu Technology and others have mobilized drones and robots to • The need for virtual healthcare and wellness advice has exploded and is accelerating transport medical supplies within hospitals and clinics as well as bring food, supplies telemedicine adoption. The US government expanded telehealth consultations to and medicines to people confined to their homes. nearly 62M Medicare beneficiaries.

• In the US and elsewhere, a growing list of companies, including Amazon, UPS, • The government also announced it would temporarily ease HIPAA privacy rules for Alphabet, Domino’s Pizza and Walmart, are already testing drones to help cut last- providers seeking to deliver remote care. mile delivery costs for products like retail goods, medicines and fast food. • An October 2019 survey by Stanford Medicine found that just 39% of US physicians • COVID-19's unique challenges could force the relaxation of rules and regulations as used telemedicine in their practice, but this easing of restrictions will likely encourage deliveries to homebound and infected people escalate. For example, medical drone more providers to offer virtual care. delivery company Zipline, which currently delivers blood and blood products in Rwanda, planned to begin US operations later this year. • The virus’ stress on the healthcare system is also spurring interest in asynchronous healthcare, a form of telemedicine that can help patients monitor and manage chronic • Gartner anticipates that 24.9K enterprise drones designed for this purpose will ship conditions without face-to-face appointments. worldwide this year (2020).

Source: eMarketer

Biometrics, Computer Vision and Thermal Imaging 5G Connectivity

• The use of biometric technology remains controversial, but COVID-19 is driving some • As telecom providers start to roll out limited 5G service, it remains a chicken-and-egg governments and organizations to use it in the interest of public health. Tech situation. They’ve been hesitant to build out capacity until they’re confident demand companies, including Baidu, Hanvon, Dermalog and Telpo, have developed systems will reach expected levels. that use facial recognition and temperature sensing to identify suspected cases. • Due to COVID-19, 5G markets may materialize sooner than expected. As large • While these measures may help prevent infectious spread, they also raise major numbers of people work and study from home, they are stressing networks, and privacy concerns, especially in Western countries. Although, 59% of US adults creating higher demand for bandwidth. surveyed by Pew Research Center in June 2019 thought it was acceptable for law enforcement to use facial recognition to assess security threats in public spaces, • “Due to the sudden uptick in existing network access to support remote work, we will some privacy experts worry that the appropriate privacy protections might be witness an acceleration in the development of 5G to ensure the bandwidth and overlooked. capacity challenges of existing infrastructure can be addressed,” says Ian Runyon, VP, Tangoe. • When it comes to advertisers seeing how people respond to public ad displays, around 54% of respondents said its not acceptable to them. • Once widely available and accessible, 5G will serve as the foundational support for emerging technologies in IoT and automation, among other applications.

Source: eMarketer

Social Virtual Reality Voice Tech and Smart Homes

• While the pandemic has caused a drop-off in theme park- and mall-variety VR, it is • The infection-conscious consumer is becoming increasingly concerned of their mobile spurring interest in other areas. devices—which are touched more than 2,600 times per day.

• Homebound people are using VR headsets to play video games, explore virtual travel • As public panic over germ spread grows, so will the use of voice tech, which can destinations and partake in online entertainment, they’re seeking human interaction reduce these touches and, at least theoretically, slow the spread of germs within through social VR platforms such as Rec Room, AltspaceVR, Bigscreen and VRChat. households.

• Businesses are also experimenting with VR platforms to train employees, hold • Voice usage will continue to pick up and extend to other smart-home components conferences, collaborate on projects and connect employees virtually. implicated as major germ hubs.

• VR headset maker HTC held its first virtual “VIVE Ecosystem Conference” completely • As more TVs and entertainment components, light switches, appliances, plumbing in VR. The March 2020 event, which drew 2,000 registrants from more than 55 fixtures and alarm systems incorporate voice control functionality, there will be a countries, marked the first physical industry event that was fully replaced by extended lesser need to touch them. reality (XR).

Source: eMarketer

Both Apple and Google are working to build Twitch hosted a benefit called Stream Aid 2020, The organization will work closely with WHO to technology into their mobile operating systems, featuring a host of celebrity guests, a lot of music, support COVID-19 research and provide WHO with allowing for large scale contact tracing in a and gaming. The goal is to raise as much money as cloud tech and technical expertise. Also, to ease post-COVID world. This tech will let everybody possible for the COVID-19 Solidarity Response Fund teachers into home-based teaching, AWS’ Educator record points of contact without collecting any for the World Health Organization Mobilization initiative will leverage its network of precise location data. educators with online experience teaching, offering webinars on a variety of remote learning topics.

Google. Amazon Web Services. Shared a post about its increased users and how they AWS is providing its support to state and local governments, educational are supporting this increased user activity. institutions and non profits and also conducting virtual interviews to expand the public sector team.

UPS. ExxonMobile. CenturyLink. Supporting small businesses through its Partnered with government and academics to In partnership with Frost & Sullivan, CenturyLink is Ware2Go warehousing and fulfillment business produce face mask and highlight what they are hosting a seminar on the current business scenario line. doing to resolve mask shortages. and encourages people to join.

AT&T T-Mobile. EA Sports. AT&T #LightBlue campaign to appreciate T-Mobile also participates in #LightBlue Is hosting an online gaming event for charity. healthcare professionals and frontline workers. campaign to show their support.

Sources: Twitter

Dell. HP. Talks about its mobile solutions for businesses to improve Offers tips on how to make work from home more secure productivity of their employees while working from home. with its devices.

Sources: Twitter

Microsoft. Assent Compliance. Is offering its AI platform to researchers and organizations Highlights its platform capabilities and how it can help companies to working on COVID-19. In a blog post, Microsoft also highlights map their supply chain. The company is offering free access to its which organizations are using its AI platform. platform.

Sources: Twitter

© 2020 Dentsu Aegis Network 112 Testing Evolves, Telemedicine and Asynchronous Healthcare on Rise • Consumer spending on health has fallen, led by precipitous declines in spending on fitness and gyms, but also on personal care and nutrition, healthcare, drug stores, pharmacies, lab testing, and insurance. • Consumer health companies have, however, reported an an uptick in prevention- and immunity-oriented products during this phase, including a more than 40% YoY increase in sales of multivitamins. • Under the stress of the pandemic, healthcare providers are turning to telemedicine. • The US government recently expanded telehealth consultations to nearly 62M Medicare beneficiaries, and announced it would temporarily ease HIPAA privacy rules for providers seeking to deliver remote care. As of October 2019, only 39% of American physicians used telemedicine in their practice; this easing of restrictions may, however, result in increased permanent telemedicine implementation. • The virus’ stress on the healthcare system is also spurring interest in asynchronous healthcare, a form of telemedicine that can help patients monitor and manage chronic conditions without face-to-face appointments. • Meditation apps have seen a spike in downloads and usage during the pandemic. In the last week of March Headspace, a meditation app, saw a 19x jump in users completing a calming exercise and a 14x surge in those doing a “reframing Health & anxiety” session. • This Week’s Headlines: Wellness • CVS ramps up drive-through testing sites: CVS is launching two offsite testing locations with Abbott Laboratories' faster diagnostic kits, able to handle 1,000 tests per day. Walmart, Walgreens and Target will also start this testing. • Inovio begins first human test of experimental coronavirus vaccine: On Monday, a healthy volunteer in Philadelphia received the first dose of an experimental coronavirus vaccine developed by Inovio Pharmaceuticals. Inovio aims to recruit 40 people into its study and to have an initial data by late summer. • Amazon bans public from buying N95 and other face masks: Amazon banned the public from buying PPE products on its website. While such products will still be listed on Amazon, their purchase will be strictly reserved for hospitals and government agencies. • CDC website drops guidance for hydroxychloroquine as COVID-19 treatment: The CDC has abruptly switched its guidance for use of drugs “hydroxychloroquine and chloroquine” as a possible treatment for COVID-19, dropping its Source: BioPharmaDiv e, The New York Times, Fierce Pharma, Wall Street Journal, USA Today , Wired, McKinsey , reference to anecdotal dosages to instead state that "there are no drugs or other therapeutics approved by the FDA The Economist to prevent or treat COVID-19." Brand Actions | Health & Wellness

In addition to its previous efforts for A government led UK organization has launched a The self-care app teamed up with US non-profit healthcare workers, and in partnership with national campaign to help people stay active during Mental Health America to build a website, Gov Andrew Cuomo, Headspace launched a the coronavirus outbreak. "Join the movement" offering wellness tools that can help people get new landing page designed for New Yorkers offers creative ideas for people to exercise indoors through the who are experiencing the brunt of the COVID- following the government's advice to stay at home pandemic. 19 pandemic in the US during the pandemic, using the hashtag #StayInWorkOut.

Roche. AbbVie. Merck. Shares an informative video about the process that On #ThankYouThursday, AbbVie shares a video of Talks about its efforts to meet the needs of takes place after the sample is taken by the doctor how company workers are working in the labs, pregnant women before, during and after child to test for COVID – 19. manufacturing sites, pharmacies and warehouses to birth in the pandemic. get medicines to the patients during the pandemic.

Pfizer. CTCA. Mayo Clinic. Talks about reviving a compound developed to Shares pointers as to what caregivers should do to Mayo Clinic and Minnesota use AI to find COVID potentially treat SARS to fight the novel coronavirus. protect themselves as well as cancer patients during – 19 hot spots. the pandemic.

© 2020 Dentsu Aegis Network 116 While Panic Buying Abates, Consumer Spending Remains High • In the two weeks following the CDC’s 15-day pause on activities on March 16th, CPG sales (in-store and online) grew $8.5 billion compared to a year ago, approximately 15x the average rate of change for a typical two-week period. • But in the last week of March, in-store sales were only $3.2 billion above the same time last year, likely driven by a combination of factors including out-of-stocks and increasingly more consumers facing community lockdowns. • CPG eCommerce saw a YoY increase of 85% in the week ending March 21, which represented an unparalleled leap ahead of past measures. However, this sharp peak in growth was followed by a WoW decline (-22%) in online sales in the last week of March, as online fulfillment systems were pushed to extremes, panic-buying abates, and consumer demand depressed. • While grocery spending remains high, consumers’ focus shifts. The “extreme buying” peak of the COVID-19 pandemic has fallen, but the average household grocery spend remains at elevated levels. • Consumers have started to change their buying habits and beginning to add more food and drinks to their carts and fewer paper products and household cleaning supplies, due to the lack of supplies. This Week’s Headlines: • Transportation bottlenecks complicate food supply chains: Truck driver shortages and other transportation CPG issues related to COVID-19 are keeping grain and other commodity supply chains from flowing normally. The impact has hiked prices for some basic food ingredients and is likely to hit the developing world first and hardest, as interrupted and delayed supply lines lead untenable price swings. Chicago saw notable jumps in wheat prices in March, while Canadian durum wheat priced at a three-year high this past week. Thai rice export prices were also at a six-year high as of this past Monday. • Mondelez faces 'unprecedented demand' online for snacks during coronavirus: As consumers turn to eCommerce to stock up their pantries, Mondelez’s Oreo, Ritz, Triscuit, and other snack offerings are experiencing a huge surge of demand online. In response, Mondelez has tweaked some of their packaging to make it unique for online channels. Their marketing team has increased its online brand presence to spend more time reaching out to consumers and their families at home, and are developing challenges to engage customers. For example, Oreo is challenging consumers to a TikTok contest where Mondelez will donate money to Save the Children as part of its $15 million commitment to fund coronavirus relief efforts. Source: Nielsen, Tinuiti, Supermarket News, Food Dive, Supplychain Dive Brand Actions | CPG

Hormel has partnered with Diageo to push at- Puts a new face on “real beauty” in a salute to Announced it is joining forces with the International home food and drink making, including a healthcare workers. Through the “Courage Is Federation of the Red Cross and Red Crescent partnership with the Jimmy Kimmel show Beautiful” campaign, Dove shows faces of Societies (IFRC) with donations of food, medical healthcare workers marked by the protective nutritional supplies and bottled water. Nestlé will gear they’ve been wearing during the also match 1-1 employee contributions to the Red coronavirus crisis. The brand is also donating to Cross Direct Relief as part of the effort.

Nestle, P&G, & L’Oreal. Showcase their specially designed hand sanitizer bottles to be distributed to healthcare professionals across communities.

Mondelez. Danone. Mondelez International talks about collaborating Danone Manifesto Ventures contributes $10M with 3P innovation to 3D print medical visors for relief fund to various startups to support their the frontline workers. portfolio and help them face exceptional circumstances during the pandemic.

© 2020 Dentsu Aegis Network 120 Restaurants Continue to Seek Financial Aid From Government • Restaurants and bars can expect a 11.4% decline in their businesses if there new COVID-19 cases peak in May. If there is a second wave of outbreaks later in Q4, restaurants and bars can expect a decline in sales of 27.1%. • The Independent Restaurant Coalition sent a letter to Congress asking to fix the Paycheck Protection Program to extend the maximum loan from 8 weeks to 3 months after the restaurant can legally open to full capacity. They are also asking for a restaurant stabilization fund that would provide up to $100 billion in grants to all independent restaurants, so they can continue to employ full staff and pay rent. • This Week’s Headlines: • Financial Assistance Tracker For Businesses: Companies are continuing to run campaigns like The Great American Takeout to encourage their customers to order from restaurants. Money collected from the efforts goes to the employee relief fund for each restaurant chain. • Restaurants step up to help hospitals and schools: Restaurants all over the country are working to provide food and different types of support for healthcare staff as well as K-12 students. Just Salad has begun delivering meals to healthcare workers at a variety of different hospitals in the Mount Sinai Health System, averaging 10,000 meals weekly. Restaurants • Google Maps adds delivery, takeout filters to boost restaurant traffic: Google Maps has recently launched a new app feature that will show users which restaurants are offering takeout and delivery. The effort is aimed at helping restaurants that may be struggling to generate enough business to stay afloat during this difficult time. • Bars and restaurants get creative with drink sales in the wake of a coronavirus pandemic: While many restaurants have closed, many of those that remain open offer robust beverage programs. Sales of alcohol have skyrocketed over the last few weeks, so restaurants who offer easy and accessible beverage options are seeing a favorable response. • The Ugly Legal Battle Over Restaurant Insurance Has Begun: While many restaurant owners are focusing their efforts on securing government assistance, some see their existing insurance coverage as a potential, equally crucial lifeboat. Since business interruption insurance will typically only cover losses related to damage, such as fires or floods, insurance companies argue they are not liable for any losses related to the coronavirus. In response, notable restaurant chefs have formed an advocacy organization called the Business Interruption Group. This effort doesn’t aim to just protect well known industry players, but to ideally set a precedent which will ultimately help all small businesses. Source: Nation's Restaurant News, Restaurant Dive, Restaurant Business, Inc., Eater Quick Service Restaurants Foot Traffic Trends

The brand gave away a free Taco to each Offering a free dozen donuts to healthcare Giving away 10 million slices of pizza to thank drive-thru customer during its Taco Tuesday professionals every Monday from first responders and other essential personnel. promotion. It also launched a new campaign #NationalDoctorsDay through All of Domino’s 6,126 U.S. locations (the that shows fans embracing the drive-thru #NationalNursesWeek in May majority of which are owned by franchisees), are process that’ shows its sticker-sealed bags expected to take part in the “feed the need” giveaways

Texas Roadhouse. KFC. With everyone spending more Informs customers that the time inside, Texas Roadhouse company would provide $20 wants to make sure they are worth of extra food with a bringing some fun to everyone's minimum order, which would lives. They are actively be sufficient to feed an entire uploading games and activities family. on their Facebook page.

Burger King. Starbucks. Talks about healthcare Mentions that coffee breaks workers staying at work these days feel different but for people and urges urges consumers to mention people to stay at home their coffee break stories with as a way to express them on Instagram. gratitude to them and respect their sacrifices.

© 2020 Dentsu Aegis Network 125 President Weighs In on Business Interruption Insurance, Car Insurance Continues to Adapt • The insurance industry remains largely braced for potential incoming legislation regarding coverage of businesses for business interruptions caused bycoronavirus. While insurers maintain that their coverage plans do not include pandemics, government and legislative officials have begun to discuss forced coverage, leaving insurance companies concerned for the future of their industry. • In a White House press briefing, President Trump said he “would like to see the insurance companies pay if they need to pay. [While there’s] an exclusion [for pandemics] in some cases, in a lot of cases, I don’t see it.” • This Week’s Headlines: • Insurance companies pause nonpayment policy cancellations, offer free coverage to delivery drivers: Insurance Car insurance companies continue to adapt to the Americans’ changing behavior. Several companies, including Geico and Allstate have paused policy cancellation actions due to non-payments, while others are offering free coverage to anyone using their personal car for important deliveries. • Immediate relief offered by some insurance companies: Companies that sell 82% of the auto policies in the U.S. have announced refunds or credits to drivers with more than $6.5 billion during the next two months. State Farm is giving credits starting in June that amount to a 25% reduction in bills, equating to around $20 per month, per vehicle.

Source: NBC Miami, Insurance Journal, Market Watch, Insurance Business Magazine, ABCNews Brand Actions | Insurance

Launched a new Coronavirus Disease Protection In Singapore, Prudential launched a video to UnitedHealth Group will invest $50 million to plan in Hong Kong to protect "from any counter coronavirus discrimination against fight the COVID-19 pandemic, supporting those unforeseen circumstances associated with the healthcare workers, showing scenes of people most directly impacted by the public health COVID- 19 outbreak." To show gratitude to helping people along with the hashtag, emergency, including health care workers, hard- healthcare professionals, it's offering the #DOgood The campaign is also encouraging hit states, seniors and people experiencing food protection free to eligible hospital staff in Hong everyone to donate to the Courage Fund. insecurity or homelessness. Kong with a 45-day coverage period

Allstate. Progressive. Is providing relief to Informs all active personal auto communities, worth $5M, consumers that 20% of their April to support domestic and May premiums will be violence victims, youth in automatically credited to their need and other accounts. emergencies.

State Farm. Protective Insurance. Under the Good Neighbor Shares a free course offered by Relief Program, Instructional Technologies for announces that auto professional drivers to be more customers will receive an aware about COVID – 19. average of 25% policy credit to their accounts.

© 2020 Dentsu Aegis Network 128 Nonprofits Sees Stimulus Support • More than 200 national nonprofit organizations have sent letters to congressional leadership, calling for inclusion of a "Nonprofit Track" in future legislation building on the CARES Act. This Nonprofit Track would expand nonprofit access to credit by designating funding exclusively for nonprofits within the principal loan programs. • 49% of nonprofit organizations have seen an increased demand for services or support from clients and communities. Almost 36% reported a significant expansion in the types of needs their clients or communities have. • The most frequently cited resources that could help nonprofit respondents meet challenges were more funding, funding operations, and flexible funding; resources and funding to support transition to virtual work and service delivery; and support in gaining access to basic supplies. • This Week’s Headlines: • Notable influencers mobilize around #HopeFromHome, the world’s first multi-platform livestream fundraising event: United Way Worldwide, United Nations Foundation and Red Nose Day are teaming up to raise efforts to combat COVID-19. This multiplatform digital fundraising event’s proceeds will go to relief efforts. Over 2,000 creators have signed up to participate with a presence in over 34 countries. This initiative will bring together celebrities, athletes, and creators. Participants will hear inspiring stories about the heroes on the frontlines of the pandemic, learn about Nonprofit important prevention measures, and be invited to donate to relief funds. Their first initiative was last week on World Health Day. • Foundation leaders starting to step-up on COVID-19: Leaders at more than 400 foundations issued a joint statement calling on foundations to significantly increase grant spending during this crisis. These include: converting project- based grants to unrestricted support; accelerating payment schedules; and not holding grantees responsible if conferences, events, and other project deliverables are postponed or canceled. Ultimately, what nonprofits need most right now is more money. Without the additional resources these organizations will have to dramatically pare back their services and programs.

• Facebook introduces new fundraising tools and digital gift cards: Facebook has recently announced new updates to its small-business grant program, including $40 million in grants for small businesses. These grants will go to 10,000 U.S. small businesses in 34 locations that Facebook employees live and work. They are also introducing new tools for small businesses in its social media platform including digital gift cards, which will expand its fundraising portal Source: Yahoo News, PR Newswire, The Nonprofit with easier ways for businesses to communicate service changes such as delivery and pickup to their customers. Times, USA Today Brand Actions | Non-profit

Mark Zuckerberg has organized relief Aware that stay-at-home orders may put individuals in The foundation has created an all-in-one-place campaigns through Facebook and his own danger, the organization is providing resources and toolkit for parents who are home-schooling their philanthropic organization, the Chan support for those who may be living in unsafe children during the pandemic, launching Zuckerberg Initiative, committing $25 environments. CLF also donated $2 million towards educational tools that help families, parents and million to fund virus research. helping the families of health workers on the frontlines children learn together at home. of fighting the pandemic, undocumented workers, the elderly and the homeless in Los Angeles and New York City.

Children of Promise. Planned Parenthood. has teamed up with Upworthy At a time when the nation is asked and TBS Network to support to stay at home, some might be in children whose parents are isolation with their abuser. incarcerated. TBS Network will Planned Parenthood reached out donate to Children of Promise for to this segment of citizens and every retweet up to $50K. asked them to reach out to National Domestic Violence Hotline to get help.

Lutheran Services. ASPCA. Lutheran Services in America American Society for the outlined their letter to Prevention of Cruelty to Animals Congress for the coronavirus informed users that even thought package and asked users to they are apart they can still help join them as they plead with protect animals through lawmakers to address urgent donations. needs.

• An article on our new lax attitude about screen-time by The New York Times.

• The New York Times also covering changes to the pandemic pantry.

• Vulture’s piece on how Jimmy Fallon found a new audience from the comfort of his home.

• Axios outlines what Google and Apple’s contact tracing looks like. Click to add text • Early coverage of the outbreak focused on brands doing good, now consumers are noticing brands doing bad, by The Drum.

• Nike’s campaign pivot in the time of coronavirus is a great example of good brand behavior. It thoughtfully reflects the moment, lifts our spirits and stays true to brand.

132 This report was prepared through a broad collaboration of Dentsu agencies and functions.

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