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June 22, 2009

CALAMITY:
MARKETING YOUR WAY
OUT OF THIS RECESSION

2 Source: Conde Naste Portfolio, January 2009 Copyright John Gerzema/Young & Rubicam
RESULTS 1–10 OF ABOUT
22,200,000 FOR RECESSION
AND MARKETING

3 Copyright John Gerzema/Young & Rubicam
FUNDAMENTAL SOCIETAL
SHIFT
FROM A CREDIT TO A CONFIDENCE CRISIS

SEA CHANGES IN CONSUMER BEHAVIORS

COMPANIES MUST CHANGE HOW THEY

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CONNECT WITH CONSUMERS Copyright John Gerzema/Young & Rubicam
MANAGING FOR AN UPTURN

SUPERIOR CASH FLOW AND
SUSTAINABLE GROWTH
ALIGN BRAND AND BUSINESS
STRATEGY
ACQUIRE TALENT AND QUALITY
DO MORE WITH LESS
SHARPEN MESSAGING AND ROI
RETURN TO YOUR CORE
FACE YOUR CUSTOMER

5 Source: Y&R Strategy, HBR: Anthony T Jan, John Quelch Copyright John Gerzema/Young & Rubicam
HALF OF ALL GLOBAL WEALTH
HAS EVAPORATED

$36 TRILLION DOLLAR LOSS
WORLDWIDE
S&P 500 DECLINED 64.4% FROM 2000
45% OF AMERICAN WEALTH FROM LOSS
OF EQUITY AND HOUSING VALUES
AVERAGE RECESSION IS 6-12 MONTHS.
THIS IS A MARATHON

6 Source: Bloomberg, Iconoculture March 2009 Copyright John Gerzema/Young & Rubicam
THE NEW FEAR ECONOMY

UNEMPLOYMENT NATIONAL DEBT

HOUSING VALUES DETROIT

EQUITY MARKETS CURRENCY VALUATION ?

INTEREST RATES ? PROTECTIONISM ?

COMMODITY PRICES BANK LENDING

IN(STAG)FLATION ? FACTORY & HOUSING STARTS

BAILOUT ? CREDIT CARD EXPOSURE
}
CONSUMER CONFIDENCE

7 Copyright John Gerzema/Young & Rubicam
CONSUMER CONFIDENCE:
LOWEST SINCE 1967 (INCEPTION)
EXCLUDING 2003 / IRAQ WAR PERIOD

8 Source: ABC News
THE LARGEST U.S. BUDGET
DEFICIT POST WWII

9 Source: Board of Governors of the Federal Reserve System Copyright John Gerzema/Young & Rubicam
VISUALIZING THE BAILOUT

10 Source: The Atlantic Copyright John Gerzema/Young & Rubicam
HOUSING VALUES CONTINUE TO
DECLINE ACROSS THE U.S.

12 Source: “Irrational Exuberance”, 2nd edition, 2006, by Robert J. Schiller Copyright John Gerzema/Young & Rubicam
AMERICAN’S HOMES NO LONGER
PERSONAL LINES OF CREDIT

13 Source:Us Department of Housing and Labor, 2009 Copyright John Gerzema/Young & Rubicam
WHILE THE CREDIT CRISIS HAS
HALTED HOUSING STARTS

14 Source: www.calculatedriskblog.com Copyright John Gerzema/Young & Rubicam
INTO THE GREAT WIDE OPEN

UNEMPLOYMENT 8.9%; HIGHEST IN
TWENTY-FIVE YEARS
SIXTH STRAIGHT MONTH OF 600,000
JOBS LOST

15 Copyright John Gerzema/Young & Rubicam
THIS PERIOD MARKED BY MOST JOB
LOSSES, WEAKEST RECOVERY

16 Source: Change in Nonfarm Pay rolls, Reported Monthly, Bureau of Labor Statistics, U.S Dept of Labor Copyright John Gerzema/Young & Rubicam
DEALING WITH THE STRESS
OF THE CURRENT ECONOMY

3 Source: Comscore Copyright John Gerzema/Young & Rubicam
AN EQUAL OPPORTUNITY
RECESSION

MILLIONAIRES HAVE LOST ONE-
THIRD OF THEIR NET WORTH.

17 Copyright John Gerzema/Young & Rubicam
AFFLUENT MORTGAGE
RATE DEFAULTS

18 Source: LPS Applied Analytics Copyright John Gerzema/Young & Rubicam
DRAMATIC INCREASE IN
FINANCIAL AND ECONOMIC
RELATED SEARCHES

1 Source: Comscore Copyright John Gerzema/Young & Rubicam
ONE STORY IN
THE AMERICAN NIGHTMARE

20 Source:New York Times Copyright John Gerzema/Young & Rubicam
A GROWING REALITY:
A MORTGAGE IS FOREVER

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19 Copyright John Gerzema/Young & Rubicam
MASLOW UPENDED:
MARKETING MUST MOVE FROM PASSION TO COMPASSION

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07

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19 Source: American Progress.org February 2009 09 Copyright John Gerzema/Young & Rubicam
THE ONLY CERTAINTY IS
UNCERTAINTY

24 Copyright John Gerzema/Young & Rubicam
“WE HAVE A STRONG
CAPITAL POSITION”

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TECTONIC SHIFTS IN CONSUMERISM:
LACK OF
DECAYING PERMANENCE LACK OF
INFRASTRUCTURE LEADERSHIP AND
RESPONSIBILITY

TAXPAYERS SELFISHNESS
ARE NOW
SHAREHOLDERS TRUST AND
COLLUSION

FAILURE OF
REGULATORS PROLONGED
CONFLICTS AND
EGREGIOUS PARTISANSHIP
AND CRIMINAL
BEHAVIOR

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LACK OF LEADERSHIP
AND RESPONSIBILITY

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SELFISHNESS AND
COLLUSION

27 Copyright John Gerzema/Young & Rubicam
PROLONGED CONFLICTS
AND PARTISANSHIP

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EGREGIOUS AND CRIMINAL
BEHAVIOR

29 Copyright John Gerzema/Young & Rubicam
FAILURE OF REGULATORS

30 Copyright John Gerzema/Young & Rubicam
TAXPAYERS ARE NOW
SHAREHOLDERS

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25 Copyright John Gerzema/Young & Rubicam
DECAYING INFRASTRUCTURE

32 Copyright John Gerzema/Young & Rubicam
LACK OF PERMANENCE

33 Copyright John Gerzema/Young & Rubicam
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35 Copyright John Gerzema/Young & Rubicam
WE EXAMINED 15 YEARS
OF DATA FROM BRANDASSET
VALUATOR®

WORLD’S LARGEST 40,000 BRANDS QUARTERLY U.S.
DATABASE OF PANEL OF
BRANDS 215 STUDIES 15,000+
RESPONDENTS
OVER 500,00 ACROSS 44
CONSUMERS COUNTRIES 72 DIFFERENT
BRAND METRICS

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BRANDS NOW ACCOUNT
FOR 30% OF THE VALUE OF
THE S&P 500

Source: Millward Brown Optimor 2007

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37 Copyright John Gerzema/Young & Rubicam
THE 250 MOST VALUABLE
GLOBAL BRANDS ARE
$2.197 TRILLION DOLLARS
WHICH EXCEEDS THE GDP
OF FRANCE

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38 Copyright John Gerzema/Young & Rubicam
BRAND ESTEEM AND
REGARD IS DOWN 12%

BRAND AWARENESS HAS
DECLINED BY 20%

PERCEPTIONS OF BRAND
QUALITY HAS ERODED 24%

TRUST IN BRANDS HAS
DECLINED BY 50%

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39 Copyright John Gerzema/Young & Rubicam
TRUST IS DESIRABLE, BUT IT HASN’T
DIFFERENTIATED

40 Source:BrandAsset Valuator 1993-2007 Copyright John Gerzema/Young & Rubicam
IN THE PAST QUARTER, A ‘TRUST VIRUS’
INFECTED MANY CATEGORIES

41
Source: BAV USA FY2006, FY2007, Q4 2007, Q4 2008; All Adults
Copyright John Gerzema/Young & Rubicam
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“I SCREWED UP”
Source: Barack Obama Press Conference, February 2009 Copyright John Gerzema/Young & Rubicam
CONSUMERS ARE BEGINNING
TO OWN THEIR PROBLEMS

43 Source: Time Magazine Copyright John Gerzema/Young & Rubicam
SAVINGS RATE HAS RISEN IN PAST FIVE
CONSECUTIVE MONTHS

45 Source: U.S. Department of Commerce: Bureau of Economic Analysis Copyright John Gerzema/Young & Rubicam
Q4 SPENDING FELL 3.7% FROM Q3 -
STEEPEST DECLINE IN 62 YEARS.
$3 TRILLION IN SPENDING STOPPED IN Q4, WAS SUSTAINING US GDP

46 Source: www.calculatedriskblog.com Copyright John Gerzema/Young & Rubicam
MOST POPULAR TAG’S ABOUT
CONSUMER BEHAVIOR

45 Source: Gabriel Dance, Aron PIlhofer and Andrew Kueneman - New York Times
CREATE COMPETITIVE
ADVANTAGE NOW

EVERY RECESSION ENDS...EVENTUALLY
CONSUMERS MOVING FROM ANXIETY TO ACTION

HOW YOU ACT NOW WILL SHAPE YOUR FUTURE
PERFORMANCE
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39 Copyright John Gerzema/Young & Rubicam
THE NEW RULES OF
‘POST-CRISIS CONSUMERISM’

NEW CULTURAL VALUES

NEW CONSUMER BEHAVIORS

NEW MANAGEMENT PRINCIPLES

49 Copyright John Gerzema/Young & Rubicam
POST-CRISIS CONSUMERISM
RULE #1

CULTURAL VALUE = LIQUID LIFE

CONSUMER STRATEGY = DÉCLASSÉ
CONSUMPTION

MANAGEMENT = DOLLARS AND
PRINCIPLE SENSE

56 Copyright John Gerzema/Young & Rubicam
DÉCLASSÉ CULTURAL VALUE=LIQUID LIFE
CONSUMER BEHAVIOR = DÉCLASSÉ CONSUMPTION
MANAGEMENT PRINCIPLE= DOLLARS AND SENSE

CONSUMPTION

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Copyright John Gerzema/Young & Rubicam
DOLLARS AND SENSE CULTURAL VALUE=LIQUID LIFE
CONSUMER BEHAVIOR = DÉCLASSÉ CONSUMPTION
MANAGEMENT PRINCIPLE= DOLLARS AND SENSE

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Copyright John Gerzema/Young & Rubicam
POST-CRISIS CONSUMERISM
RULE #2

CULTURAL VALUE = ETHICS AND
FAIR PLAY

CONSUMER STRATEGY = EMPATHY AND
RESPECT

MANAGEMENT = VALUE AND
PRINCIPLE VALUES

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Copyright John Gerzema/Young & Rubicam
EMPATHY AND RESPECT CULTURAL VALUE = ETHICS AND FAIR PLAY
CONSUMER BEHAVIOR = R-E-S-P-E-C-T
MANAGEMENT PRINCIPLE = VALUE AND VALUES

54 Copyright John Gerzema/Young & Rubicam
VALUE AND VALUES CULTURAL VALUE = ETHICS AND FAIR PLAY
CONSUMER BEHAVIOR = R-E-S-P-E-C-T
MANAGEMENT PRINCIPLE = VALUE AND VALUES

55 Copyright John Gerzema/Young & Rubicam
POST-CRISIS CONSUMERISM
RULE #3

CULTURAL VALUE = INDESTRUCTIBLE
SPIRIT

CONSUMER STRATEGY = DURABLE LIVING

MANAGEMENT = BRAND THAT

PRINCIPLE LASTS

50 Copyright John Gerzema/Young & Rubicam
DURABLE LIVING CULTURAL VALUE = INDESTRUCTIBLE SPIRIT
CONSUMER BEHAVIOR = DURABLE LIVING
MANAGEMENT PRINCIPLE = BRAND THAT LASTS

51 Copyright John Gerzema/Young & Rubicam
BRAND THAT LASTS CULTURAL VALUE = INDESTRUCTIBLE SPIRIT
CONSUMER BEHAVIOR = DURABLE LIVING
MANAGEMENT PRINCIPLE = BRAND THAT LASTS

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Copyright John Gerzema/Young & Rubicam
POST-CRISIS CONSUMERISM
RULE #4

CULTURAL VALUE = RETURN TO THE
FOLD

CONSUMER STRATEGY = COOPERATIVE
CONSUMERISM

MANAGEMENT = COMMUNITY
PRINCIPLE ORGANIZER

59 Copyright John Gerzema/Young & Rubicam
COOPERATIVE CULTURAL VALUE = RETURN TO THE FOLD
CONSUMER BEHAVIOR = COOPERATIVE CONSUMERISM
MANAGEMENT PRINCIPLE= COMMUNITY ORGANIZER

CONSUMERISM

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Copyright John Gerzema/Young & Rubicam
COMMUNITY ORGANIZER CULTURAL VALUE = RETURN TO THE FOLD
CONSUMER BEHAVIOR = COOPERATIVE CONSUMERISM
MANAGEMENT PRINCIPLE= COMMUNITY ORGANIZER

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Copyright John Gerzema/Young & Rubicam
THE OPPORTUNISTIC CEO:
BRAND MANAGER IN CHIEF

53 Copyright John Gerzema/Young & Rubicam
MARKETING IS NOT A COST, BUT
A FIDUCIARY RESPONSIBILITY
TO SHAREHOLDERS

54 Copyright John Gerzema/Young & Rubicam
THE CHINESE CHARACTER FOR
CRISIS ALSO MEANS
OPPORTUNITY

BAD COMPANIES ARE DESTROYED
BY CRISIS. GOOD COMPANIES
SURVIVE THEM. GREAT COMPANIES
ARE IMPROVED BY THEM.”
—ANDY GROVE

65 Copyright John Gerzema/Young & Rubicam
RECESSION-PROOF
YOUR BRAND

JOIN THE CONVERSATION AT
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ON FACEBOOK
OR TWITTER
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