Record unemployment, and bye-bye breakfast: Friday Wake-Up Call
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One for the record books
Unemployment filings spiked last week, smashing previous records, as 3.28 million people sought aid after mass layoffs nationwide resulting from the spread of COVID-19. Just two weeks ago, filings sat at 211,000 according to Bloomberg, a near-historic low. The previous record of 695,000 filings was in 1982, a full year into a recession.
The hockey-stick shape of the graph mirrors the sudden rise of coronavirus cases around the world, and with social distancing one of the few methods available to combat the disease, economists expect unemployment numbers will continue to rise at record rates in the coming weeks.
Despite the terrible news, stocks rallied for a third straight day, as investors placed their hopes on the $2 trillion stimulus bill passed by the Senate on Wednesday night. The Dow Jones Industrial Average ended 6.38 percent up on Thursday.
The most important ad dollars of the day
Restaurants have been hard hit by quarantine and isolation measures, with several fast food giants reevaluating their marketing budgets, looking for better ways to spend that cash. Wendy’s is taking the $40 million to $50 million it was planning to drop on advertising its new breakfast menu, which debuted Mar. 2, and using it to support franchisees.
“Over the next three months, it is extending payment terms for royalties and marketing funds by 45 days and deferring base rent payments on restaurants leased to franchisees by 50 percent,” writes Ad Age’s Jessica Wohl. “It is also giving franchisees another year to remodel and build new restaurants.”
And McDonald’s is phasing out its all-day breakfast menu as all of its U.S. restaurants move to drive-thru, delivery and carryout only, with limited menu options and hours.
Who watches the watchers?
Businesses and schools are relying on teleconferencing options like Zoom, and brands are releasing playful backgrounds so self-isolating workers can turn playrooms into sunny beaches. But questions are being raised about the tech company’s privacy protections—or lack thereof. Zoom reserves the right to store users’ personal data, including the recordings of video calls, instant messages and files sent through the program, according to research by Consumer Reports.
The Zoom app for iOS also sends personal data to Facebook, even if users don’t have Facebook accounts. “The Zoom app notifies Facebook when the user opens the app, details on the user's device such as the model, the time zone and city they are connecting from, which phone carrier they are using, and a unique advertiser identifier created by the user's device which companies can use to target a user with advertisements,” reports Motherboard.
The question is, will privacy concerns fall to the wayside as consumers become more concerned by their own health and safety?
Amazon lags behind
While brick-and-mortar shops are shuttering, e-commerce giants like Target, Walmart and Costco are seeing sales soar. Notably missing from that list is Amazon, whose sales have been flat, or even fallen. “Both a large third-party seller and an Amazon consultant who works across multiple categories say they see sales declines in many, or most, of their business or client businesses. Much of the decline, they say, stems from Amazon’s shift last week to temporarily allow only essential items from brands and independent sellers to move through its warehouses, meaning longer shipping times for almost everything else and more orders either not placed or canceled,” writes Ad Age’s Jack Neff.
Consumer spending is also shifting focus to essentials, so the days of frivolous shopping at 2 a.m. with a glass of wine are over, at least for now. For its part, Amazon is hiring 100,000 fulfillment center workers, and some d-to-c brands are listing their wares with Amazon in lieu of their own less-popular online stores.
He’s going the distance: Hotels are suffering as travel dries up, and the fear of coronavirus contamination is eclipsing old anxieties like bedbugs. But Hotel.com’s Captain Obvious isn’t trying to change that. “Normally, the brand's mascot Captain Obvious is out there trying to convince people to get off of their couches or social media and take a trip,” writes Ad Age’s Ilyse Liffreing. “But now that people have been encouraged to stay home, he too is laying low and urging others to do the same.” In a spot from Crispin Porter Bogusky, he kicks back and eats popcorn, while the brand adds the message, “Just stay home.”
Tech steps up: Add high-tech design firms Dyson and Tesla to the list of companies shifting their production facilities to make ventilators. Tesla will build them at its Giga New York factory, which usually makes solar cells. And Dyson will actually design and build 5,000 ventilators in-house.
Killer looks: Who didn’t see this coming? Influencers are paying up to $200 for designer N95 face masks. Normally retailing for as much as $69 for pearl-pink, supplies have dried up and prices have rocketed on outlets like eBay. Of course, with global shortages of the masks that could keep healthcare workers safe, the outcry against the practice has been harsh.
Spoiler warning: Netflix isn’t actually spoiling the endings to its own shows, at least not yet. A fake campaign that’s been circulating features out-of-home ads that give away the endings to Netflix shows, as a means to scare people into staying at home. The project is the brainchild of a creative duo at Miami Ad School Europe.
That does it for today’s Wake-Up Call, thanks for reading and we hope you are all keeping safe and well.
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