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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America, companies and individuals are feeling the dire impacts of the coronavirus pandemic: almost 300 companies have withdrawn their financial guidance; about 175 companies suspended stock buybacks or cut their dividend; and 100 firms that together employ some 3M people have said they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 © 2020 Dentsu Aegis Network 7 Global and US Snapshot (as of April 15) 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 © 2020 Dentsu Aegis Network 8 Weekly Snapshot: Global and US 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.

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