“A PERSON LIKE ME” NOW MOST CREDIBLE SPOKESPERSON FOR COMPANIES; TRUST IN EMPLOYEES SIGNIFICANTLY HIGHER THAN IN CEOS, EDELMAN TRUST BAROMETER FINDS
Survey Shows Microsoft as Most Trusted Global Company and Technology Most Trusted Sector; Television, Not Newspapers, Loses Ground to Internet as Trusted Source
January 23, 2006, New York -- Global opinion leaders say their most credible source of information about a company is now “a person like me,” which has risen dramatically to surpass doctors and academic experts for the first time, according to the seventh annual Edelman Trust Barometer, a survey of nearly 2,000 opinion leaders in 11 countries. In the U.S., trust in “a person like me” increased from 20% in 2003 to 68% today. Opinion leaders also consider rank-and-file employees more credible spokespersons than corporate CEOs (42% vs. 28% in the U.S.).
The Edelman Trust Barometer found Microsoft Corporation the most trusted global company, followed by iconic companies in their home markets, including Toyota in Japan, Haier in China, Samsung in South Korea, and Petrobras in Brazil.
“We have reached an important juncture, where the lack of trust in established institutions and figures of authority has motivated people to trust their peers as the best sources of information about a company,” said Richard Edelman, president and CEO, Edelman. “Companies need to move away from sole reliance on top-down messages delivered to elites toward fostering peer-to-peer dialogue among consumers and employees, activating a company’s most credible advocates.”
This year’s survey assesses the impact on trust of a company’s national origin, industry sector, behaviors and communications policies. Key findings, which are being presented this week at the World Economic Forum in Davos, include:
Opinion leaders in Europe apply a significant “trust discount” for major U.S. brands, such as Coca-Cola (U.S.= 65% vs. Europe= 41%); McDonalds (51% vs. 30%); P&G (70% vs. 44%); and UPS (84% vs. 53%). There is no “trust discount” for non-American global brands operating in the U.S. or any other market (e.g. Sony = 74% in Japan, and 79% in the U.S.), with the exception of Japanese brands in China.
Western based companies continue to make big strides in winning trust in the Chinese market. Big gainers this year included Citigroup, Procter & Gamble, Shell, Unilever and UPS, all now rated trustworthy by more than 75% of Chinese respondents, and up from under 50% two years ago.
German and Canadian companies are highly regarded by more than 70% of opinion leaders in every market surveyed. Less than 40% of opinion leaders expressed trust in global companies headquartered in emerging markets such as China and India, as well as in Korea. Such companies face particular trust deficits when seeking to buy companies in overseas markets.
Companies in the technology and retail sectors are the most trusted, while energy and media-entertainment are the least-trusted industries. Pharmaceutical concerns face considerable skepticism in the U.S. and Germany, while financial firms fare much better in the U.S. and Asia than in Europe.
Television is the big loser in media trustworthiness with the rise of the Internet. When asked where they turn first for trustworthy information, 29% of respondents in the U.S. still cite TV first, down from 39% three years ago. The Internet is now cited by 19%, up from 10% in 2003. The same trend is evident in the U.K., where television has declined from 42% to 33% as respondents’ first choice, while the Internet has risen from 5% to 15%. Newspapers, which are often thought to be the most serious casualty of the Internet wave, show rankings essentially unchanged in most markets at approximately 20%. Newspapers remain the first trusted medium of choice for respondents in France, Germany, Japan, Brazil, Korea, and Italy.
“Articles in business magazines” is the most credible source of information about a company (US = 66%, Canada = 53%; Brazil = 75% Europe = 60%), followed closely by “friends and family,” which has grown very strongly in the U.S. (‘03=35% vs. ’06=58%); Brazil (‘04=66 vs. ‘06=73%) and Canada (‘05=43% vs. ‘06=58%).
Trust has important bottom-line consequences. In most markets, more than 80% say they would refuse to buy goods or services from a company they do not trust, and more than 70% will “criticize them to people they know,” with one-third sharing their opinions and experiences of a distrusted company on the Web.
Trust in institutions overall is lowest in Germany and France, and highest in China, Brazil and the U.S. Business was trusted by only 33% of respondents in Germany, and only 28% in France, vs. 45% in Spain, 51% in Italy and 53% in the U.K. (Comparable figures for the U.S. and China are 49% and 56%, respectively.) Government is the least-trusted institution in Brazil, Spain, Germany, and South Korea, and remains low in the U.S. (38%), UK (33%), France (32%), and Canada (36%). It has increased in China (83%, up from 63% in ’05) and Japan (66%, up from 43% in ’05). Trust in media is low across all countries except for China (73%) and South Korea (49%).
Trust in Non-Governmental Organizations (NGOs), which have consistently been the most-trusted institution in Europe during the six years that the survey has been conducted, has steadily increased in the U.S. (‘01=36%, ’06=54%); and increased significantly in the last 12 months in Canada (’05=45%, ‘06=57%) and Japan (’05=43%, ’06=66%). Despite the survey asking for only trusted global companies, many respondents volunteered NGOs such as the Red Cross in France and the UK and Greenpeace in Germany were also frequently mentioned. NGOs are now the most-trusted institution in every market except Japan and Brazil. The widespread rise in trust of NGOs has now extended to Asia, especially in China, where ratings went from 36% to 60% in last 12 months.
“Trust is the key objective for global companies today because it underpins corporate reputation and gives them license to operate,” said Michael Deaver, Vice Chairman, Edelman. “To build trust, companies need to localize communications, be transparent, and engage multiple stakeholders continuously as advocates across a broad array of communications channels.
About the Edelman Annual Trust Barometer
The Edelman Annual Trust Barometer tracks the attitudes of nearly 2,000 opinion leaders around the world – which institutions, companies, sources of information they trust, what drives that trust, and the credibility of institutions. The seventh survey was conducted through 25-minute telephone interviews among nearly 2000 opinion leaders: 400 in the United States; 750 in Europe; 150 each in the United Kingdom, France, Germany, Italy and Spain; 200 in China; and 150 each in Canada, Japan, Brazil and South Korea. All interviews were conducted in October 2005 by StrategyOne. Opinion leaders are defined as being between 35-64 years, college graduates with a household income of more than $75,000 or equivalent, and reporting a significant interest and engagement in the media, and in economic affairs and policy issues. There is no tracking data for Italy, Spain and South Korea, which were added this year.
About Edelman
Edelman is the world’s largest independent public relations firm, with 2,000 employees in 43 offices worldwide. In 2005, Advertising Age named Edelman PR "Agency of the Year," and PRWeek named Edelman the “Agency to Watch” in 2006. Edelman was also named the Pan European Consultancy of the Year by The Holmes Group. Edelman’s network includes four specialty firms – Blue (advertising), First&42nd (management consulting), StrategyOne (research) and BioScience Communications (medical education and publishing) – making it possible to offer clients a comprehensive spectrum of communications services.
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