ANXIETYINDEX QUARTERLY 2ANXIETYINDEX.COM

ANXIETYINDEX QUARTERLYDuring periods of heightened consumer anxiety, brands need real-time data that can help themnavigate a rapidly changing landscape.They need answers to new questions and a point of viewon the types of businesses and business practices that will emerge out of the crisis.

JWT should know. At 145 years old, we have a proven track record of leading brands throughpivotal times.

We’ve done this by providing tools to help brands succeed. One such tool is our proprietaryAnxietyIndex, launched during the run-up to the war in Iraq; it tracks the level and drivers ofconsumer anxiety and explores how these affect attitudes and behaviors.

Earlier this year, we expanded upon our AnxietyIndex by debuting www.AnxietyIndex.com.With daily content updates and major research and trend reports added frequently, thisinteractive site is intended as a place to discover and discuss how brands and consumers areresponding to and coping with the global recession.

More than a hundred blog posts and mounds of research and trends data later, we areintroducing our inaugural AnxietyIndex Quarterly.This publication seeks to contextualize thecontent we published in the first quarter of this year, presenting a major theme that hasemerged and offering recommendations on how brands can address this challenge.

TOPLINE FINDINGSIn an increasingly anxious world, consumers are adjusting their attitudes and behaviors inorder to cope—whether they’ve been directly affected by the recession or not. Brands areresponding in kind, adopting a variety of responses to the rapidly changing marketplace.

Not surprisingly, many brands are focusing on price and value messaging.The problem is thatsuch tactics have historically been considered a generic, low-level marketing practice, andnormal branding rules have not applied. Eschewing smart branding practices is a problem thatbecomes more acute in light of the fact that shrinking marketing budgets are tipping in favorof short-term tactics and away from long-term brand-building.

Note that this is not another argument for maintaining or increasing brand spend during arecession. While this is a proper solution that has proven to work to the enduring advantage ofbrands, we understand the business realities that preclude many marketers from adhering to it.We understand that, quite frequently, it’s an either-or situation or a situation where themajority of a brand’s budget needs to be devoted to moving product now.

Instead, this is an argument for applying branding principals to short-term selling activity—for approaching tactics in a branded way. The recession has brought the need for this smarterapproach to the fore, and it will require an evolution in marketing. Without it, brands riskcoming across as interchangeable, schizophrenic, watered-down, reactionary. Brands riskbecoming unbranded—generic.

In our first AnxietyIndex Quarterly, we lay out this argument and offer recommendations forhow marketers can make branded tactics as important as brand strategy.

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LEVELS AND DRIVERS OFCONSUMER ANXIETYThe 16th installment of the JWT AnxietyIndex, fielded in February and March 2009, showsthat anxiety is running high as people fear for their jobs, investments and financial security.Levels of anxiety vary significantly across the eight markets we surveyed, however, rangingfrom a low of 61 percent in Australia to a high of 90 percent in Japan. (See Figure 1.)

While Japan is the most anxious market, Russia records the most intense anxiety, with 38percent of Russians saying they feel very nervous/anxious. (See Figure 2.)

Figure 1: Levels of anxiety

Overall, given everything that is going on in the world, the country, and your family’s life, how nervous oranxious would you say you currently are?

Japan Russia U.S. U.K. Spain Canada Brazil Australia

21

79

16

84

10

90

27

73

30

70

33

67

% Nervous/Anxious % Not Nervous/Anxious

34 39

66 61

Figure 2: Intensity of anxiety

Overall, given everything that is going on in the world, the country, and your family’s life, how nervous oranxious would you say you currently are?

Russia Japan U.S. Brazil U.K. Canada Spain Australia

2025

38

18 1512 12

9

% Very Nervous/Anxious

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Unsurprisingly, the economy is the primary driver of anxiety in most markets. (See Figure 3.)Brazil is a notable exception: Issues that hit closer to home are the biggest causes of anxiety.

While there were differences across markets in terms of specific drivers of anxiety, mostinevitably trickle down to a person’s pocketbook—e.g., the government’s budget deficit, bankfailures, unemployment rates and food prices. (See Figure 4.)

Political Leadership

State of Economy

Cost ofHealth Care

Cost ofLiving

Job SecurityCrime

CurrentMilitary

Hostilities

PotentialMilitary

Hostilities

Threat ofTerrorism

1400

1200

1000

800

600

400

200

0

U.K.U.S.

Brazil

CanadaAustralia

RussiaSpain

Japan

Figure 3: Drivers of anxiety

Events in your life, in the country and in the world can make people nervous or anxious. For each of thefollowing, please indicate how nervous or anxious you currently are, or not.

The War in Iraq

The HousingMarket

The Warin Afghanistan

Gasoline/PetrolPrices

Food Prices

Bank Failures*

YourGovernment’sBudget Deficit

The Stateof Our NationalInfrastructure

Safety ofthe FoodSupply

Quality ofProducts we

Import from China

NaturalDisasters

The StockMarket

UnemploymentRates

Impact ofGlobal Warming

1000

800

600

400

200

0

U.K.U.S.

Brazil

CanadaAustralia

RussiaSpain

Japan

Figure 4: Specific drivers of anxiety

Events in your life, in the country and in the world can make people nervous or anxious. For each of thefollowing, please indicate how nervous or anxious you currently are, or not.

Note: The AnxietyIndex Score isderived by the ratio of those who arenervous to those who are not nervous,multiplied by 100.

*”Bank Failures” not asked in Australia

Note: The AnxietyIndex Score isderived by the ratio of those who arenervous to those who are not nervous,multiplied by 100.

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CONSUMER RESPONSE TO ANXIETYOur research shows that as consumers find themselves affected by events outside their control,they are responding by exercising greater control of the immediate world around them invarious ways. Uncertainty about the future is driving even those who have not been directlyaffected to take precautions.The anxious are planning their purchasing behavior around whereand when they can get the best deals and exercising greater restraint.

Some are reducing their transportation, energy and entertainment costs, while others aretaking more extreme measures, such as moving in with family members. Grocery shoppers aretrading down, clipping coupons and spending much less. Parents are having uncomfortableconversations with their children—about not being able to afford big purchases, downsizingvacation plans and cutting back on clothing allowances, among other things. (See Figure 5.)And young adults are making value assessments to determine what they would give up ordowngrade if their budgets become tighter. (See Figure 6.)

As a qualitative complement to our AnxietyIndex surveys, our bloggers asked people fromtheir respective countries what they thought about the recession and its impact on their lives.

I am a little scared about the future because I think the crisis will force me to delay my professionaland personal life. —MARINA, 24, Spain, student

I would very much like to know what to do with my savings. It’s not that I have a lot, but I know mymoney is shrinking, and I feel hesitant. Should I keep it in the bank? Should I invest in something?I’m worried I could lose my savings, which were so difficult to earn. —LUCIA, 38, Argentina, cook

I paid attention to the thermostat this winter like I never have before. My family says I froze themout. But in an attempt to save money, I did turn it down, and I can truthfully say that has never beena concern—comfort was always premium before. —STEPHANIE, 40, U.S., stay-at-home mom

For me and my wife, we’ve tended to stop buying anything that seems unnecessary or indulgent. Forour kids, we’ve been teaching them to share and play with a toy together instead of each havingindividual toys. —SANTI, 31, Thailand, graphic designer

I have different supermarkets for my shopping—one for detergents, soaps and shampoos, andanother one for food products such as oil, rice and sugar, since both product categories are cheaperin their specific supermarket. —GHADA, 39, Egypt, homemaker

I’ve heard at work that they will fire people and cut salaries. These are the kinds of things that arehappening now, whether you like it or not. I’ve felt so impotent—it’s really upsetting. —MANUEL,30, Mexico, film editor

See the appendix for more on the AnxietyIndex methodology, details on levels and drivers ofanxiety, and a closer look at anxiety and consumer response to that anxiety in Japan, Russiaand Brazil.

In addition, find more information on how consumers are responding to the recession byvisiting the Trends and Research section of www.AnxietyIndex.com.

See appendix for variations by country.

0 10 20 30 40 50 60 70 80 90 100

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Figure 5: How parents are coping with the recession

Had to tell child(ren) we couldn’tafford a big purchase they wanted

Had to downsize family vacation plans

Cut back on child(ren)’s clothing allowance

Cut back extracurricular activities for child(ren) that

cost moneyMaking child(ren) pay for things

I once helped pay for

Cut back allowances for child(ren)

Made child(ren) get a job

Talked to child(ren) aboutattending a less expensive college

Average across U.S., Canada, U.K., Australia and Brazil

Figure 6: What young adults would give up altogether if budgets become tight

Paying to download music

Magazine subscriptions

Attending sports events

Dining out

Buying video games/equipment

Going out to the movies

Gym membership

Movie rentals

Buying new clothing

Alcohol Consumption

Cable/Satellite TV

Your Mobile/Smart Phone

Your Internet Connection

Average across U.S., Canada, U.K., Australia and Brazil

0 10 20 30 40 50 60 70 80 90 100

% among young adults 18-29

% among parents of teenagers

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BRAND REACTIONS TO ANXIETYBrands have adopted a variety of tactics in response to changing consumer attitudes andbehaviors. In the first quarter of 2009, we monitored more than 100 brand responses to therecession. We found that most approaches fit into six buckets: optimism, humor, nationalism,nostalgia, consumer empowerment and value/price. (Some of these approaches overlap.)

Optimism: During crisis, people learn to live with losses (jobs, homes, savings) anduncertainty, making them more sensitive to what really matters. As in every extreme changeand loss situation, people start pondering the meaning of their lives. Brands are taking part inthis process by trying to inspire consumers with optimism. Coca-Cola Spain’s “OpenHappiness” campaign tackles the meaning of life via the concept “What would you tellsomeone who has just arrived in the world in times like these?” While the times might seemdire, Coca-Cola reminds us that the future always offers hope.

There are also two compelling case studies from Argentina that focus on optimism; both campaignswere executed after the country suffered from a period of high unemployment, high inflation andgeneral social instability in the early aughts. Beer brand Quilmes debuted a stirring television spotfor the 2002 FIFA World Cup that featured the country’s soccer players cheering on the nation,urging their fellow citizens to pull through and get past the crisis while Aerolineas Argentina’s2003 campaign focused on the concept of “Argentine-ness” as a powerful social connector.

Humor: Trying to make light of a dismal situation, brands are resorting to all sorts ofrecession humor, some successfully (JetBlue poking fun at those who seem most responsiblefor the financial crisis), others with a thud (Manhattan Mini Storage using recession wordplayto persuade those who must downsize to store their belongings; one ad highlights the“Storagista,” defined as a “city gal who downsizes to a studio and stores to save money”).

Nationalism: Brands are making a point of emphasizing the impact that doing business withthem has on the local economy.Take iconic Australian auto brand Holden: With the tagline“Times are a bit tough. But Australians and Holden are tougher,” the brand is trying toleverage national pride to drive affinity with consumers. And in one TV commercial, aChevrolet dealer compares Toyota and GM, noting that 97.5 percent of GM vehicles sold in theU.S. are made in the U.S. compared with only a little over half (53.6 percent) for Toyota. Heends the spot asking customers to “Consider America’s jobs. Consider America’s future.”

Nostalgia: Anxiety and nostalgia go hand in hand—when times are tough, it’s only natural toseek comfort in memories of what seems like a simpler era. So brands including General Mills’Trix and Cocoa Puffs in the U.S. and Heinz in the U.K., are “retrograding.” Equal parts witand nostalgia, one ad for New Zealand soft drink brand L&P walks Kiwis through a classicchildhood summer before reminding them that “You were there, and so was L&P.”

Consumer empowerment: Brands are providing consumers with choices (payment plans,different sizes, etc.), making them feel they have greater control. NatWest in the U.K., forexample, is highlighting the bank’s MoneySense financial advisers. E*Trade’s talking babiescampaign in the U.S. acknowledges the rough economy and tanking 401Ks and urgesconsumers to “take control.”

Price and value: With consumers making all sorts of value assessments in response toanxiety, it’s no surprise that the vast majority of recession-related work we’ve observedrevolves around value and price. Everyone from airlines, fast-food restaurants and retailers toautomakers, packaged-goods purveyors and real estate properties is rolling out pricepromotions, savings or discounts, as well as value or “more for less” messaging, to motivateconsumers to buy in this depressed economy.

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Since we found that value- and price-conscious marketing is so critical—and so dominant—anissue in brand responses, we focus on this area of activity for the balance of this paper.

THE GENERICIZING OF BRANDSAs marketing budgets shrink and tip in favor of value messaging and cost incentives ratherthan brand-building, the absence of the latter in favor of the former is acutely dangerous.

This type of price-driven activity has historically been considered a generic, low-levelmarketing practice, and normal branding rules have not applied. While that may have workedwell enough during flush times—when larger branding efforts acted as a halo andcompensated for generic activity—today all communications must incorporate brand-building.Otherwise, brands risk coming across as interchangeable, schizophrenic, watered-down andreactionary.

Take, for instance, the interchangeable messages that are coming from various U.S. fast-foodjoints.There’s Subway’s $5 Footlong, Arby’s 5 for $5 and Little Caesars $5 Hot-N-Ready.Thesimple message: Get more for less. Little is said about the taste or quality of the food.

And little is said of Citroën’s technological prowess in a U.K. campaign that simply lists theprices and economic advantages (fuel-consumption data) of the automaker’s C1, C3 and C4models.This is a real departure from Citroën’s previous long-running campaign for the C4,which starred a funky futuristic transformer that illustrated the tagline “Alive withtechnology.”

Even more problematic is when price-led efforts are disconnected from concurrent brandedefforts—evident in an effort for the Morrisons supermarket chain in the U.K. In a clearattempt to stifle the ominous threat from discounters, Morrisons has ramped up its price-ledadvertising. A series of cheap-looking ads fronted by Nick Hancock—a fairly low-profile, low-cost TV face—highlight some worryingly low prices: all the ingredients for a family barbecuefor just £4. Confusingly, a simultaneous campaign uses higher-profile celebrities (HelenBaxendale,Tara Fitzgerald, Lulu) waxing lyrical about their passion for fresh, quality Britishproduce.

Figure 7: Price and value messaging vs. other approaches used by brands as recorded by anAnxietyIndex.com tag cloud

68%

Price andValue

32%

Other

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Schizophrenic behavior of this nature dilutes core brand equity. While it may help in the shortterm, knee-jerk reactions to the immediate environment can prove detrimental to the long-termvalue of the brand, especially if they don’t link up to what a brand represents or the biggerbrand idea.

Australia’s top-selling breakfast cereal, Sanitarium Weet-Bix, is a case in point.The latestcampaign touts the cereal as “Cheap Fuel” and talks explicitly about its low cost-per-serve,with the closing line “Just 9 cents per Bix.” While the strategy pushes value rather than price(with a new endline of “Exceptional” and a commercial touting a raft of nutrition claims),being seen as “cheap” provides no protection from the threat of private-label brands that offerthe same product at a lower price.

In today’s landscape, it’s more important than ever to differentiate your brand—to give peoplea reason to believe and, subsequently, a reason to buy. But now that we’ve entered an era inwhich price- and value-related tactics comprise a large part of many marketing budgets, howcan brands avoid messaging that feels or sounds generic?

MAKE BRANDED TACTICS ASIMPORTANT AS BRAND STRATEGYThis is not another argument for maintaining or increasing brand spend during a recession.While this is a proper solution that has proven to work to the enduring advantage of brands,we understand the business realities that preclude many marketers from adhering to it. Weunderstand that, quite frequently, it’s an either-or situation or a situation where the majority ofa brand’s budget needs to be devoted to moving product now.

Instead, this is an argument for applying branding principals to short-term sellingactivity—for approaching tactics in a branded way. The recession has brought the need forthis smarter approach to the fore, and it will require an evolution in marketing.

Tactics can no longer be divorced from larger brand-building efforts. Branded tactics—especially those having to do with price and value—need to become as important as brandstrategy.

The challenge for brand owners is to develop branding skills in what for the most part hasbeen an unbranded arena.They must find their “value voice” so that promotions have brand-building effects, leaving a brand in a better rather than worse place. And everything, includingsales tactics, must be seen as a part of brand strategy. Without developing these skills, brandswill become more generic at a time when their unique qualities are most essential.

Admittedly, this is far easier for some than others, especially those that had price-driven brandstrategies well before the recession. It comes naturally to brands like U.K. retailer John Lewis,which promises that it’s “Never knowingly undersold,” or Wal-Mart, with its theme “Savemoney. Live better.”

But what if you’re not John Lewis or Wal-Mart? What then?

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RECOMMENDATIONSBelow we provide some ways in which brands can ensure they are handling tactics in abranded manner.

Find your value voice.You can’t just simply tout price, or you’ll sound like everyone else.Understanding how your brand should speak about price and value is absolutely critical.Exploit your unique voice to talk about price.

• Since 1988, when Charlton Heston was on hand to open one of the twice-yearly salesat Harrods in London, a parade of celebrities from Brooke Shields to ChristinaAguilera to Eva Longoria has followed. These stars arrive in a horse-drawn carriage,get a tour of the store accompanied by owner Mohamed Al-Fayed and address thehoards of shoppers lined up outside.With pomp and circumstance, Harrods has turnedwhat could be just another sale into an occasion befitting its upscale image.

• Target’s “Brand new day”TV commercials, which showed cool-looking people actuallyenjoying various recession-era lifestyle compromises (e.g., “the new vacation glow:self-tanner, $9.39,” “the new nightclub: Wii dance game, $69.99”), were right in linewith the brand’s established “cheap chic,” “more-for-less” sensibility while toutingspecific prices for the first time.

• In Sainsbury’s award-winning “Try something new today” campaign, which has beenrunning in the U.K. for several years, TV chef Jamie Oliver encourages shoppers toexperiment with new ingredients by demonstrating simple recipes. Since 2008, Oliverhas been showing shoppers how they can feed their family for just £5.The ads reflectthe changing times while remaining true to the brand’s core value of encouragingexperimentation.

Find creative ways to talk about price. This is the moment for brands to provide consumerswith choices (in how they pay, how much they pay, when they pay, etc.), making them feel theyhave some control.

• Casas Bahia, Brazil’s largest retailer and advertiser, built its empire on a businessmodel that provides credit to low-end consumers, who have been able to acquirefridges, stoves, furniture, etc. through monthly installments. One key factor inattracting these consumers has been to make clear that the company is open tonegotiating the payment plan and doing all it can to ensure the monthly installmentfits the household budget. In one campaign, Casas Bahia actually asked consumers,“How much are you willing to pay?” in an attempt to provide the comfort that comesfrom being able to choose the most suitable payment plan.

• “Pay what you want” has been used by a number of marketers as a novel way toattract buzz and engender goodwill by making patrons feel empowered. In February,Singapore’s new Ibis hotel ran a promotion via the site paywhatyouwant.com.sg, whereguests could name their price for a room during a brief window each day. A handful ofrestaurants around the world have also picked up on the idea. Little Bay in London,for example, ran a “pay what you think it’s worth” promotion during February, and atthe Taverne Crescent restaurant in Montreal, “pay what you want” is in effect duringlunch on weekdays.

• While many retailers discontinued their layaway service in recent years, amid a declinein use thanks to credit-card-happy consumers, Kmart remained committed to it. Lastholiday season, the retailer leveraged this in a series of ads that used its Mr. Blue Light

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animated light bulb to tout the layaway service as an affordable way to buy gifts.Others have followed suit, reviving layaway as a more financially sensible alternativeto buying on credit.

Remove the risk from price. With anxiety levels high and the future uncertain, people arereluctant to spend—even if they haven’t been directly impacted by the recession.This isespecially true of higher-ticket items or long-term financial commitments. While your productor service may be the same price as it was before the recession, you can sell some peace ofmind by taking risk out of the equation.

• The originator of the movement to provide certainty in uncertain times, Hyundai MotorAmerica launched a program in January that assured customers that “if you lose yourincome in the next year, we’ll let you return your car.” In a press release announcingthe program, acting president and CEO John Krafcik said, “Ten years ago, Hyundai’sindustry-leading warranty provided peace of mind to consumers about Hyundai’squality and reliability. Today we’re extending that peace of mind to cover consumers’employment status and personal finances.”

• Telefonica in Spain is promoting rebates for people who have lost their jobs—an offerthat’s less about increasing penetration than about crafting an image as a caringcompany.

• AIG Israel is selling mortgage insurance for people afraid they’ll lose their job aftertaking on a mortgage. If the fear is realized, AIG will pay the person’s mortgage forup to a year. It’s a way to sell security to consumers afraid of long-term financialcommitments—and, for a brand that’s facing serious challenges, a way to attractconsumer attention.

Don’t mention price. If you want your product to be seen as valuable, avoid mentioning price.An increasing number of brands are latching onto the “more for less” message—and it’s fastbecoming trite. Make your message different by stating it in a new, refreshing way—withouttalking price—that is aligned with your brand. Allow consumers to connect the dots.

• With its current iteration of “Happy Jetting,” JetBlue subtly communicates “more forless” by telling “bigwigs, muckety-mucks and big cheeses” how “jetting on JetBlue isa lot like on your private jet, with a few basic differences.” A section on the airline’sWeb site describes features such as lots of leg room, DirectTV, free snacks and “faresthat won’t give the CFO a conniption.” The work is perfectly aligned with JetBlue’sdistinctly un-stuffy, anti-stodgy airline brand.

• OMO, a leading washing-powder brand in the premium segment in China, is positionedas cleaning more types of stains than competitors—99 types of stains, as itsadvertising claims. Heightened consumer sensitivity to price recently prompted thebrand to further justify its cost. Without relinquishing any of its premium creds,current advertising tells housewives that OMO is a good value because it cleans twicethe amount of clothing with the same amount of powder.

While it may be difficult in a climate dominated with price and value messaging, it’s imperativeto make branded tactics as important as brand strategy. It’s a matter of long-term thinking:Brands must be sensitive to consumers’ changed priorities but nevertheless maintain theiruniqueness. Brands that successfully accomplish this will not only retain customers duringthese lean times but remain relevant once the economy picks up again.

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APPENDIX

METHODOLOGYThe 16th installment of the JWT AnxietyIndex was fielded in February and March 2009,using SONARTM, JWT’s proprietary online research tool.The online survey polled 1,065American adults, 1,004 Britons, 992 Canadians, 983 Australians, 500 Brazilians, 500Japanese, 205 Russians and 203 Spaniards. Data was weighted by age, gender and householdincome based on government population statistics.

ANXIETY LEVELS AND DRIVERSAnxiety is running high as people fear for their jobs, investments and financial security. Acrossthe eight markets we surveyed, anxiety levels ranged from 61 percent in Australia—whichhasn’t yet felt the full impact of the global recession—to as high as 90 percent in Japan. Justas Japan’s economic prospects were looking up following the “Lost Decade,” the currentrecession hit, and its export-dependent economy has become even more hobbled. In addition,Japan’s political leadership has demonstrated a lack of vision, its economic and politicalsphere of influence is rapidly shrinking in the face of India and China, and the lack of eldercare is a hot topic in a country whose population is the fastest-aging in the world.

While Japan is the most anxious market, Russia records the most intense anxiety, with 38percent of Russians saying they feel very nervous/anxious. Memories of the ’98 financial crisisare still top-of-mind for Russians, and most believe this crisis will be long-lasting. Amid layoffsand salary cuts, Russians are seeing a reduction in their household income even as the cost ofproducts and services continues to climb—prices are two to three times higher in Moscow thanin other European capitals.

Unsurprisingly, the economy is the primary driver of anxiety in most markets. Brazil is anotable exception: Issues that hit closer to home are the biggest drivers of anxiety in thatmarket, especially crime and the cost of health care. While the crisis has affected Brazil—andthe official index indicates a rise in unemployment—few feel they’ve been hit hard.This islikely because the Brazilian economy is still very informal, and because Brazilians tend to findopportunity in crisis.

Concern about the cost of living is higher than average in Russia. Similarly, concern about thecost of health care is higher than average in the U.S. and Russia. When asked about specificfactors that may contribute to anxiety, Russians expressed most concern about food prices,Americans about the budget deficit and unemployment, and Britons about bank failures. InBrazil, food prices, the unemployment rate and global warming are major concerns; in Canada,the biggest worries are the unemployment rate and food prices; in Australia, it’s food prices;and in Spain, it’s the unemployment rate.

Since Japan has the highest level of anxiety and Russia the most intense, we take a closer lookat these markets here. We also take a closer look at Brazil, since the drivers of anxiety therevary greatly from those in the other countries we surveyed.

A CLOSER LOOK AT JAPAN, RUSSIAAND BRAZIL Economic downturn is just the tip of the iceberg for anxious Japanese

Japanese culture—more than most and, some would argue, even to a fault—places greatemphasis on stability and harmony. So when those break down, Japanese people get antsy.

Our most recent AnxietyIndex finds that 90 percent of Japanese consumers say they areanxious, and a quarter of those express intense anxiety.The recent global economic woes areperhaps the proverbial straw that’s breaking the camel’s back. It’s the latest in a string ofevents that have led to a dramatic loss of stability and revealed cracks in the cultural fiber ofthe country.

Unlike other parts of the world, Japan has not enjoyed the growth and prosperity of the last15 or 20 years, thanks to the “Lost Decade” of economic stagnation following the early-’90sbursting of Japan’s bubble economy. And just as the country’s economic prospects werelooking up, the current global recession hit, and its export-dependent economy has becomeeven more hobbled.

In addition, Japan’s political leadership has demonstrated a lack of vision with policies thathave done more harm than good. Programs meant to stimulate the stagnant economy of thelast decade and a half have failed and only put the country in big debt relative to GDP; thehealth care system is in shambles due to poor planning; and the lifetime-employment systemhas broken down, with unprecedented unemployment rates.The list goes on and on.

(continued on next page)

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The War in Iraq

The HousingMarket

The Warin Afghanistan

Gasoline/PetrolPrices

Food Prices

Bank Failures

YourGovernment’sBudget Deficit

The Stateof Our NationalInfrastructure

Safety ofthe FoodSupply

Quality ofProducts we

Import from China

NaturalDisasters

The StockMarket

UnemploymentRates

Impact ofGlobal Warming

1000

800

600

400

200

0

Japan

Average of 8 Markets

Figure 1: Drivers of anxiety (Japan vs. other markets)

Events in your life, in the country and in the world can make people nervous or anxious. For each of thefollowing, please indicate how nervous or anxious you currently are, or not.

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As if those weren’t enough sources of anxiety, Japan’s population is the fastest-aging in theworld, its birthrate is the lowest among developed countries, and the tradition ofmultigenerational households has all but disappeared in less than 20 years.The lack ofadequate elder care is becoming a hot topic; a Japanese celebrity recently committed suicidebecause the burden of caring for her elderly and infirm mother 24 hours a day without anysupport had become too much.

What’s more, beyond domestic concerns, Japan’s economic and political sphere of influence israpidly shrinking in the face of the Indian and Chinese juggernauts, and there is a real sense—in one of the most natural-disaster-prone countries in the world—that the impact of globalwarming will hit Japan hard, perhaps sooner than later.

Many Japanese are therefore looking toward the future without much hope, seeing theirsociety moving further and further away from the stability and harmony so deeply ingrained inthe culture.This lack of hope is feeding fear and, ultimately, anxiety.

For brands looking to connect with Japanese consumers, providing a vision of hope is the placeto start.This does not mean sugar-coated aspiration; consumers in Japan, as much asanywhere else, are savvy and hungry for transparency and authenticity. Rather, it’s aboutconnecting with core cultural values—the deep-seated Japanese belief in the collective powerto overcome adversity, for example—and expressing belief in a positive future. Ironically, itmay also involve looking to the past and deep into the culture itself; brands that can helprenew a national sense of pride stand a better chance of striking the right chord with today’sJapanese consumer. —JORDAN PRICE, TOKYO

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Highly anxious Russians see their country as hardest-hit

Russians were the most intensely anxious consumers among the eight countries JWT surveyedearlier this year.They feel that Russia is suffering the most in this global recession, ahead ofthe U.S.

Memories of the ’98 financial crisis are still top-of-mind, and most Russians believe this crisiswill be long-lasting. Still, they see the mass media as exaggerating the crisis’ influence andstirring aggravation and anxiety.

There’s a panicked mood among circles of friends and colleagues, and for good reason: Withlayoffs and salary cuts, Russians are seeing a reduction in their household income even as thecost of products and services continues to climb—prices are two to three times higher inMoscow than in other European capitals. (Only petroleum has become a little cheaper with thecrisis.) As a result, the country is seeing major cutbacks in consumer spending and a crimewave.

Russians are reducing their expenses and saving more.They are economizing not only in food,clothing and entertainment but also in their pharmaceutical purchases.

Brands can connect with these consumers by speaking simply and clearly to the commonpeople—who are tired of seeing the promotion of unaffordable luxury lifestyles—andemphasizing transparency. Focusing on value is important, as the key criterion for mostconsumers is the correlation between price and quality. —EKATERINA FILIMONOVA, MOSCOW

The War in Iraq

The HousingMarket

The Warin Afghanistan

Gasoline/PetrolPrices

Food Prices

Bank Failures

YourGovernment’sBudget Deficit

The Stateof Our NationalInfrastructure

Safety ofthe FoodSupply

Quality ofProducts we

Import from China

NaturalDisasters

The StockMarket

UnemploymentRates

Impact ofGlobal Warming

1000

800

600

400

200

0

Russia

Average of 8 Markets

Figure 2: Drivers of anxiety (Russia vs. other markets)

Events in your life, in the country and in the world can make people nervous or anxious. For each of thefollowing, please indicate how nervous or anxious you currently are, or not.

ANXIETYINDEX QUARTERLY 16ANXIETYINDEX.COM

Brazilians brush off temporary woes, downturn included

“We’ve already been through a series of economic crises, and no one died because of them”—this seems to be the dominant attitude among Brazilian adults. And in fact, Brazilians nowhave a stable currency and are living in times of effective social mobility.

While the crisis has affected Brazil—and the official index indicates a rise in unemployment—few feel they’ve been hit hard.This is likely because the Brazilian economy is still veryinformal and also because Brazilians tend to find opportunity in crisis. People deal with highunemployment in enterprising ways: selling foodstuffs or beauty products, performing serviceslike house painting and gardening, etc.

Despite this tendency to brush off temporary woes and to find opportunity in crisis, even themost optimistic people sometimes feel defeated by the country’s deeply entrenched problems,primarily its crime, government corruption and violence.This defeatism in turn makesBrazilians more fearful.

To counteract this anxiety, brands should reinforce, reflect and even drive consumer optimism.Brands can also get behind Brazilians by helping or encouraging them to take advantage ofwhatever opportunities exist. —KEN FUJIOKA, SAO PAULO

The War in Iraq

Quality of Products we Import

from China

The State of Our National Infrastructure

Your Government’sBudget Deficit

Natural Disasters

Impact of Global Warming

Safety of theFood Supply

Gasoline Prices

The Stock Market

Food Prices

UnemploymentRates

The War in Afghanistan

Bank Failures

Trade Balance

Violence

Inflation

Impunity

Depreciationof Currency

GovernmentCorruption

Excess of Vehicles The Housing Market

1200

1100

1000

900

800

700

600

500

400

300

200

100

0

February 2009

Figure 3: Drivers of anxiety (Brazil vs. other markets)

Events in your life, in the country and in the world can make people nervous or anxious. For each of thefollowing, please indicate how nervous or anxious you currently are, or not.

Note: Since we did not measure government corruption and impunity as specific drivers of anxiety inother markets, we are not showing Brazil’s anxieties relative to the other markets surveyed here.

~

ANXIETYINDEX QUARTERLY 17ANXIETYINDEX.COM

0 10 20 30 40 50 60 70 80 90 100

Figure 4: How parents are coping with the recession

Had to tell child(ren) we couldn’tafford a big purchase they wanted

Had to downsize family vacation plans

Cut back on child(ren)’s clothing allowance

Cut back extracurricular activities for child(ren)

that cost moneyMaking child(ren) pay for things

I once helped pay for

Cut back allowances for child(ren)

Made child(ren) get a job

Talked to child(ren) aboutattending a less expensive college

U.S. Canada U.K. Australia Brazil

Figure 5: What young adults would give up altogether if budgets become tight

Paying to download music

Magazine subscriptions

Attending sports events

Dining out

Buying video games/equipment

Going out to the movies

Gym membership

Movie rentals

Buying new clothing

Alcohol Consumption

Cable/Satellite TV

Your Mobile/Smart Phone

Your Internet Connection

U.S. Canada U.K. Australia Brazil

0 10 20 30 40 50 60 70 80 90 100

% among young adults 18-29

% among parents of teenagers

466 Lexington AvenueNew York, NY 10017

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For AnxietyIndex inquiries, please contact Ann Mack (ann.mack@jwt.com, 212-210-7378).For press inquiries, please contact Erin Johnson (erin.johnson@jwt.com, 212-210-7243).