1. The last few months have been a roller coaster for consumers as reopening, a second COVID wave, BLM protests, and economic uncertainty intensified. 2. Initially, most advertisers adjusted campaigns to show empathy for COVID challenges, but approaches are now diverging as some brands address racial equality while others remain silent. 3. Advertising spend decreased significantly due to economic uncertainty, but research shows maintaining or increasing spend during a crisis can boost future sales and market share, leading some brands to increase digital advertising.

1. Marketing and the
present moment
Last updated: June 19th, 2020
1SOURCE/CREDIT: SEATTLE MET

2. 2
Consumer Update:
Where we are in the crisis &
factors to consider
Advertising update:
Why now?
And how?
We’d like to thank these organizations who have published the valuable research shown in this report:
Acupoll, AEI, Avira, Bain, BCG, Citibank, Civiqs, Comscore, emarketer, Financial Times, IAB, IAS, Ipsos, IRI, Journal of Advertising Research
Kantar, LEK research, Luth Research, McKinsey, MAGNA, Mindshare, Nielsen, NCS, NY Times, Persado, Peter Field, PWC, Real Eyes, System-1,
Unacast, Vidmob.
Marketing and the present moment

3. 3
Consumer Update:
Where we are in the crisis &
factors to consider
Advertising update:
Why now?
And how?
Consumer and the present moment

4. 4
Everything is now different. Will it ever be the same?
Source: BSG consumer survey May 25th
Source: BSG consumer survey April 2020

5. It hasn’t been all bad.
5
Source: Acupoll, April 16
Majority of Americans
feel Better about:
Relationship with their
family: +19%
Their priorities in life:
+18%
The development of
their children: +12%
“This has changed me
for the better”
“I stop to thank people
at the grocery”
“I am proud of myself for
not breaking down”
“Taking time to reflect,
exercise, spend more
time with my family”
“Engaging my family in
activities they never
participated before like
cooking”

6. But, the last 4 months have been a roller coaster
6
March April May June
•Pandemic
•Lockdown
starts
•Panic buying
•Stocks crash
• Lockdown expands
• Economy concerns
emerge
• Stocks rebound
•Economy concern
intensify
•Reopening in sight
•BLM, police issues
•Stocks rally
• Reopening
accelerates
• New CV19 spike
• BLM
• Economy
uncertainty

7. Consumer sentiment is not favorable
7
Source: The Conference Board Source: Ipsos public affairs

8. Re-opening brings its own challenges
8
-70%
<-25
Daily cases:
36,000+
Daily cases:
20,000+
Source: Unacast
Daily cases:
27,000+
85% of Americans live in areas where stay-at- home restrictions have been lifted
But in those areas, 52% have continued to stay home if able (Source: Mindshare)

9. Perceived risk of outside activities ticks upward
and ”normal” is being pushed back, again.
9

10. Safety measures, but not at the expense of privacy
10
Source: Avira

11. Economy:
Unemployment and uncertainty shoot up
11
Source:
US Bureau of Labor Statistics

12. Entire world is affected
12

13. Stimulus increased personal income, but
that’s not nearly enough for some groups
13

14. Economy in perspective: BLM

15. Racial Equality: Public support for Black Lives rises
15
• 74% of Americans agree
that they support the
Black Lives Matter
movement.
• They also agree that the
protests related to BLM
are important & should
be happening (71%)

16. Police:
Americans support reform measures but not dismantling
16

17. Media: More digital, more streaming.
17
Source: comScore, NY times, emarketer
Total digital visits
across ten key
categories remains 37
percent higher for the
week of May 25, 2020
than for the week of
February 3, 2020.

18. Consumer mindset: Covid, Summer (and protests)
18
Rising Retail Categories in Google Search
Source: https://gweb-dat-demand-seeker-
prod.appspot.com/feature/category-trends/us/month
VS a year Ago (up to 900% or more)
Household disinfectants 1000%+
Sneeze Guards 1000%+
Neck Gaiters 800%+
Hand sanitizers & wipes 700%+
VS a month ago (up to 200% )
Sprinkler control 300%+
Coolers 80%+
Rash Guards & Swim Shirts 80%+
Radio Scanners 70%+
39% of Americans are planning to take a summer vacation
47% will no longer go on vacation or will postpone it

19. In Summary:
• Everything is now different. Will it ever be the same?
• Last 4 months: A roller coaster (but not all bad)
• Re-opening: New concerns as cases spike
• Consumer sentiment: negative
• Economy: Unemployment and uncertainty shoot up
• Racial equality: Front and center, as BLM gains support
• Current Mindset: Covid, Summer and protests
19

20. 20
Consumer Update:
Where we are in the crisis &
factors to consider
Advertising update:
Why now?
And how?
Advertising and the present moment

21. Ad Spend & the economy move in the same direction
• 75% of the change in ad
spend is explained by
change in GDP
• Basically, advertisers adjust
their spend based on the
economy and follow a herd
mentality
21

22. Recession: We hit the brakes HARD on ad spend
• On average 1% drop in
GDP causes 4.4% drop
in advertising
• Advertising is still not
seen as a source of
competitive advantage
although it could be.
According to a study by (AAAA) advertising during difficult times results in increase in a 1.5-point gain in incremental
market share, much greater market share gains than in periods of economic prosperity. 22

23. GDP is down 5% in Q1 and CFOs expect
revenue to go down
23

24. State of advertising: Spend is already down
• Digital ad spend is down 29%, slightly improving
• Yet, nearly 26% more brands are advertising on TV today vs. a year ago
• Audience targeting is up (+38%)
Sources:
1. IAB buy side survey, April 2020
2. iSpot analysis of national advertising from
March 14 through April 12. (March 14 was
selected as the starting point because it
marked the first Saturday at the start of
pandemic lockdown without live sports
broadcasts.
24

25. What the research says: keep spending (if you can)
Strategy Expected outcome based on
research
Cutting
Spend
Cutting back on advertising during a recession
can hurt sales during and after the recession,
without generating any substantial increase in
profits.
Maintaining
Spend
Not cutting back on advertising during a
recession could increase sales during and after
the recession
Increasing
Spend
Increasing advertising during a recession may
boost sales, market share, or earnings during or
after the recession because most firms tend to
cut back on advertising during a recession.
Source: Journal of Advertising research
http://www.journalofadvertisingresearch.com/content/49/3/304
25
Source: Ipsos

26. 26
“Do not hit the panic button and withdraw
brand advertising, unless short-term survival
depends on it.
Resist the pressure to switch advertising
spend from brand solely to activation.
Maintaining SOV is likely to be cheaper than
in normal times.”

27. The rest of the year: Digital especially Social is
forecasted to grow, all other traditional down
27
Sources: IAB

28. Planning:
Increase of uncertainty and short-termism
28

29. 29
Source: GroupM
New challenges:
There is such thing as too much brand safety• Advertisers who leverage news are more likely to pause/cancel ads
• Marketers are also increasingly preventing their ads from appearing alongside content related to Covid-19 and recently
Black Lives Matter protests, with some blocking keywords including ‘black people,’ ‘George Floyd’ or ‘BLM,’"
Source: Forbes, Dr Augustine Fou
“Algorithms rely
on keywords,
which means
clever fraudsters
can simply
plagiarize content
for their fake sites
and exclude
keywords they
know will be
blocked.”

30. Safety: Most consumers don’t have an issue
with ads placed next to CV-19 content
30
Source: Lumen research
Source: IAS

31. Branding:
Initially, all marketers got the same brief
Decided to:
1. adjust tone of voice
2. show empathy
3. Communicate that we
are in this together
31
73%
of advertisers adjusted
their messaging for CV19
Source: IAB

32. Most brands got to the same placeA tinkling piano.
Monochrome deserted streets.
An old newspaper blows past.
Empty chairs. Gloomy skies.
Concerned faces.
“We’ve been there for you since 19-
something something,” says a comforting,
homespun voice.
The tempo of the piano increases. The sun
rises.
“But in these unprecedented times,” the
voice continues, “we can still be there for
each other and our families.”
Product shot.
Slow motion video of employees interacting
in a friendly yet socially isolated manner.
Children play at home on the sofa. An old
person waves through a web cam.
“Together with you.”
Logo. 32
Source: Youtuber Microsoft Sam - https://www.youtube.com/watch?v=vM3J9jDoaTA

33. Then, BLM resurfaced.
33

34. Most (but not all) consumers expect brands
to take a stand
34
79%
73% 69%
21%
27%
31%
0%
20%
40%
60%
80%
100%
Promote black
onwned businesses
Address issues in
their ads
Support protesters
in social media
More/same liklihood to support brands that… Less likely
Source: Mindshare, Wave 11Source: Edelman
79%
21%
0%
20%
40%
60%
80%
100%
Take a stand on racial justice
Brands will win my trust
Brands will lose my trust

35. What if you stay out of it all?
System1 re-tested 100 ads — mostly B2C — in the UK (50 ads) and the US (50 ads) from January and February 2020 (the period before
the pandemic hit these countries) to investigate whether these ads are connecting any differently today. The ads were chosen at
random from across the sectors covered and the re-test was conducted over the weekend of 21-22 March.
35

36. Concluding:
36

37. Summarizing: Increase of complexity
1. Consumer attention: Roller coaster intensifies
1. Re-opening, Wave 2, BLM, economy (and summer).
2. Advertising: From convergence to divergence
1. Most brands “in this together” for CV-19, most cut spend
2. Some brands taking a stand for racial equality, some increase spend
37
Last updated:
June 16th