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February 27, 2007
A Recurring Nightmare
I was breezing through the Financial Times last night and there was the bombastic Robert Mugabe, President of Zimbabwe, staring me in the face again. According to the FT, the President “has pulled out all of the stops for his 83rd (birthday) bash. Thousands of children draped in scarves adorned in the president’s familiar features will dance in honor of the father of the nation…he insists it is not time for him to retire…he could stand again for the presidency in 2008.”
I met Mr. Mugabe in New York City in the late 1980s. My client, H.J. Heinz Company and its charismatic CEO, Anthony O’Reilly, had made a significant investment in Zimbabwe by acquiring Olivine Foods, maker of edible oils and soaps. Mugabe had been elected prime minister in 1980, according to the FT, “inheriting a highly efficient commercial farming sector.”
Mr. Mugabe wanted to use the Heinz purchase of Olivine as a signal to the global business community that he was serious about opening his country for further corporate direct investment. Edelman was hired to organize a press briefing with business reporters for Mr. Mugabe and Mr. O’Reilly. Our photo prop was a giant can of iconic Heinz Baked Beans, presented by Mr. O’Reilly to the President with his usual sparkle, quipping about the product’s “anti-social side effects when consumed in too large quantities.” Mr. Mugabe then took the stage, to outline his Government’s commitment to a liberalized economy seeking to attract foreign capital.
The first question from an enterprising Newsweek reporter was along the lines of, “If you are liberalizing the economy, why not have free elections and a truly open political system?” Mugabe had just abolished the post of prime minister in 1987 and became executive president, a duly elected though dubiously derived position given the 90% plus votes he receives in each “election.”
Mugabe’s response was chilling and memorable. “We don’t waste our money and time on these types of elections. We know what the people want and need.” I guess that he has been proven correct; the FT says 2/3 of the population is close to starvation and inflation is at 1,600 percent and rising.
The risk to business leaders doing business with politicians who promise that electoral freedoms will follow deregulation of markets and economic liberalization. Business needs to be careful not to become a pawn in a game that it cannot win. There are certain risks that are not worth taking and values not worth compromising.
Posted by Edelman at 10:50 AM |
Comments
Dear Mr. Edelman,
I read with interest your blog about Robert Mugabe -- especially in view of Edelman's client relationship with the Moroccan-American Center for Policy (MACP), which is a registered agent of the Moroccan government. I find Edelman's collusion with the Moroccan government through MACP highly disturbing. You mention that "Mugabe had been elected prime minister in 1980...." As I am sure you are aware the king of Morocco was never elected, and what passes for a democratic institution in Morocco, the parliament, is widely regarded by human rights groups as merely a rubber stamp body that can be dismissed at the whim of the king. Everything you say about Mugabe's disdain for democracy is equally applicable to Mohammed VI. So my first question is why doing business with MACP, a Moroccan government proxy group, is for Edelman a risk worth taking.
I don't know whether you have ever taken a look at your client's website (moroccanamericanpolicy.com). If you have you would know that MACP is a very thinly disguised propaganda organization for the Moroccan government. The bulk of the site is devoted to historically inaccurate information about Morocco's invasion and occupation of the Western Sahara. In case you are not familiar with the issue, Morocco invaded the territory in the mid-70s and despite repeated calls by the United Nations to hold a referendum on independence Rabat has refused to allow the inhabitants their right to self-determination. The International Court of Justice, furthermore, rejected Morocco's claims to sovereignty over the territory, and not one country today recognizes Morocco's sovereignty. MACP's site is a blatant attempt to justify Morocco's flaunting of international law through a campaign of misinformation. So my second question is how you can justify doing PR work for such an ethically challenged group.
My third question involves the specific campaign you ran for MACP: “Free Them Now! A Campaign to Win the Freedom of the World’s Longest Held Prisoners of War.” What's wrong with this award-winning campaign? Unfortunately, alot: 1) from 1975 to 1991 when a cease-fire was signed between Morocco and the Polisario Front, despite the longstanding desire of the Polisario to swap the Moroccans they held in a prisoner exchange, Hassan II, the current king's father, refused to negotiate their release. He was afraid that negotiation would legitimize the Polisario. 2) The 1991 cease-fire called for the release of prisoners on the holding of a referendum. Morocco flatly refused to uphold its part of the bargain by refusing to hold the referendum. 3) We are seeing more and more evidence that a major reason Morocco had no Saharan prisoners to exchange for the Moroccan prisoners held by the Polisario is that Morocco had "disappeared" or killed many of them. My point is that your campaign takes the side of and colludes with a brutal, autocratic regime with genocidal tendencies. Is this something you are proud of?
In addition, I have noticed that Edelman is a signatory to the United Nations Global Compact which prohibits collusion with countries in committing human rights abuses. Isn't that what you are doing in you campaign with MACP? And by the way, I have tried to find some mention on your website of your having signed the Global Compact, but have been unsuccessful. Could you point out for me where it is mentioned or are you hiding it for some reason.
If you want to talk about a "recurring nightmare," it is hard to find a situation much more nightmarish than Morocco's brutal illegal 30 plus-year occupation and plundering of the Western Sahara in flagrant violation of international law. How do you justify vilifying Mugabe while glorifying Morocco's equally vile deeds?
In conclusion I would like to remind you of your words from a couple years ago:
"Let me begin by recognizing that those who live in glass houses should not throw stones. I am sure that in the 53 year history of Edelman, there have been instances where we have drifted too close to the ethical line, whether in our choice of client or in our tactics on behalf of clients. With that caveat, I have a few thoughts that I hope will prompt further discussion in our industry.
First, we should not take on any client in the way that a lawyer can claim that every client deserves representation. We are not working in a court of law. We are working in the court of public opinion. We cannot say that the media is the ultimate screen on truth or the jury for the public. We are increasingly sending messages directly to end users of information, without the intermediate step of the media. What we disseminate often moves into public discourse with immediate effect and this information can move markets, affect consumer health or well-being. We should have a higher standard today on who we represent and what we say on their behalf."
Yes, you should have a higher standard today on who you represent.
Posted by: Charles Liebling at March 11, 2007 4:12 PM
Charles,
I am Peter Segall, a general manager in Edelman's Washington office, and oversee the relationship with the Kingdom of Morocco.
Thanks for your posting. Edelman takes great pride in our work on behalf of Morocco and has been awarded both national and international recognition for our efforts. The campaign that supported the release of the world’s longest-held POWs had a direct impact on the lives of these men and their families. Many of the POWs returned home to meet the children of their children for the first time. Regardless of political perspective, few would argue with granting freedom to 404 POWs who had been held in deplorable conditions in southern Algeria for an average of 23 years – 15 years after the UN brokered ceasefire called for their return.
In addition to being a strong and historic ally, Morocco is an example of a modern, moderate Islamic nation. As the Center for Strategic International Studies stated in its October 30 report, "In the past several years, Morocco has undertaken a number of profound steps forward toward political and economic transformation, setting a country at the forefront of reform efforts in the Middle East and North Africa."
Our work with Morocco has been transparent and forthright and we look forward to continuing our partnership with this unique and important country.
Posted by: Peter Segall at March 12, 2007 5:32 PM
Dear Mr. Segall,
Thank you for your response.
I’m not as cheery about Morocco as you are. Yes Mohammed VI is better than his father, who according to Morocco’s own Reconciliation Commission was a monster of major proportions. Yes Mohammed VI is saying all the right things, but basically Morocco is still an autocratic, corrupt, and underdeveloped country that tortures its political opponents and jails its reporters. Its failed social, economic, and political policies have created a “modern” Morocco that is the biggest breeding ground for Islamist terrorism in the world, which is the world’s largest exporter of hashish, and whose education levels resemble those of least developed countries. And certainly in the occupied Western Sahara its brutality and totalitarian ways are well documented by such groups as Freedom House, Amnesty International and Human Rights Watch.
But, actually, whether Morocco is a nice or not-so-nice place is not the main point of my comment. All countries have their warts and I have no problem with Edelman working for the Moroccan government per se -- for instance on say trade policy or tourism. Once you start working, however, for Morocco on the Western Sahara issue, you have crossed a line from public relations to propaganda because it is an issue with no ethical high ground for you or Rabat. As I mention in my previous comment, the UN and the world community are unanimous in refusing to accept Morocco’s sovereignty or annexation. You (Edelman), in cahoots with Rabat and the MACP, can spin it any way you like, but what you are doing is endorsing a brutal and illegal occupation and the denial of the Western Saharans right to self-determination.
Your cynical use of the sad and regrettable POW situation to demonize the Polisario Front is just that, cynical. Morocco, itself, has a long sad history of either ignoring the POWs or else using them to further their colonialist agenda. You are colluding in the perpetration and perpetuation of gross human rights abuses. You are making a mockery of the UN Global Compact of which you are a signatory.
Similarly, no matter how much you stand up for your client, MACP, it is hard to see this group as anything more than a propaganda factory for Morocco. The information they propagate on Morocco is at best a whitewashing of a very dubious record on human rights and development. Their information on the Western Sahara is simply false. Almost NOTHING they say about the Western Sahara stands up to academic or scholarly scrutiny. This misinformation is a deliberate and malicious attempt to prevent the Western Saharans from realizing their right to self-determination and to justify gross violations of international law on the part of Morocco. You should be ashamed to have these people as your clients.
By the way, since it was Mr. Edelman’s post on Zimbabwe that got me started here, I thought I’d check the recently released Freedom of the World 2007 report from Freedom House to see how the occupied Western Sahara stacked up against Zimbabwe in terms of political rights and civil liberties. As I had suspected, the Western Sahara and Zimbabwe have exactly the same score, only slightly above the “worst of the worst” such as Tibet, Cuba, North Korea, and Sudan and in line with lovely places such as Equatorial Guinea, Eritrea, Syria, and Laos.
In summary, while you have indeed been “transparent and forthright” in your endorsement of Morocco’s illegal and reprehensible policies in the Western Sahara, it is not something of which I would be proud.
Sincerely,
Charlie Liebling
Posted by: Charles Liebling at March 19, 2007 10:21 AM
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| TrackBackFebruary 23, 2007
Message in a Bottle
On Wednesday night, I was trapped in an elevator at the Harvard Club of New York City for a half hour in very close quarters with a dozen sweating PR people. I was one of the featured speakers at an Arthur Page Society event about how PR should evolve given the rapid development of new media. After a pleasant cocktail hour, too many of us crowded into the elevator en route to dinner. The doors closed and the elevator promptly plunged two floors to a hard landing. Matt Creamer from Ad Age was the control panel of the elevator, managing the static filled communication with the outside world. Blackberries and cell phones were rendered useless in the basement of this place—we were cut off, well and truly.
During our time together, the conversation ranged from the banal (“Can I share your half imbibed drink?”) to the serious (Tim Andree, a former NBA player with a serious height advantage, tried to push the top of the cab open). Nobody became agitated, probably the result of media training or yoga classes. A few of us tried to make more meaningful conversation, with my best gambit being how Israel conducted its press policy during the recent conflict in Lebanon (confirming your supposition that once a nerd, always a nerd). Anyway, the messengers escaped the bottle after intercession by the crowbar-wielding club manager.
Following our elevator debacle and a wonderful dinner, a discussion was led by Jonah Bloom, editor of Ad Age. A few important points that arose during the course of the panel:
1) There must be a better way for companies to respond to press stories they don’t like than to cut off reporters and threaten reprisals. One old approach, the Letter to the Editor, has been updated for the web. The online edition of The Economist engages in rich conversation threads whose starting point is a letter to the editor. If you disagree with a reporter’s rendition of the facts, you post a comment with links to credible sources, thereby starting the discussion.
2) The mix of content from traditional media versus web content has shifted significantly toward the web. Of 100 stories created at Ad Age in a given week, only 18 are for the traditional publication, the remaining 82 are on line.
3) The historic distinction between corporate communications and marketing communications is ebbing, though the separation of chief marketing officer and director of PR/PA remains. In a world of multiple stakeholders and dispersed media, there is no validity to a separation of church and state approach. There is in fact wisdom in using marketing stories to build corporate reputation.
4) We need to create programs that work on both the vertical and horizontal axis. That implies a more open attitude toward consumer generated content, away from messages and towards a conversation. Mainstream media, from the BBC to Reuters, is recognizing the benefits of offering a platform for discussion, not just a “we talk, you listen” approach.
I continue to be impressed by a finding in the 2007 Edelman Trust Barometer: In most markets, business media is the most credible source of information about a company (55% trust in the US, about comparable to findings in 2003-6). In fact, according to our data, radio, television and newspapers also play a vital role in creating a whole picture. We have moved from a time of single source credibility (Walter Cronkite, anchor of CBS Evening News as example) to the present requirement of multiple sources, each reinforcing an initial impression that is constantly iterating with factual updates. Our job in PR, therefore, must be to enhance the position and performance of mainstream media, while simultaneously participating in the discussion constantly underway on line regarding how media platforms are changing.
P.S. Edelman is doing pro-bono work for the 18Seconds movement (www.18seconds.org) that aims to inspire businesses, organizations, government entities and individuals to take steps to be more energy efficient. This is not an effort to get companies to join but instead to make their own commitments, then to promote their activities independently. The most tangible, immediate action is to switch to compact fluorescent light bulbs (CFLs) in homes and businesses. The 18Seconds movement launched yesterday in San Jose, California. For our part, Edelman is buying a CFL bulb (at $2.50 apiece) for each of its employees as an incentive to get them to change all of their bulbs at home. That will give a running start to the tool on www.18seconds.org that tracks nationwide sales of CFLs! We need to evaluate other energy saving ideas. Must we really have small refrigerators in each executive’s office holding small bottles of water? Could we not go back to putting water bottles into a single refrigerator in the office? Can we recycle paper, bottles and cans in all of our offices? In any case, thanks to Lauren Cole, Tish van Dyke and Jonathan Adashek at Edelman for making this CFL initiative come to life for our firm.
Posted by Edelman at 2:23 PM |
Comments
My only problem with Jet Blue is the central communications thesis—the air traveler bill of rights seemed an attempt to deflect attention from the core issue, which is lack of command HQ able to handle difficult air travel scenario and lack of understanding of tolerance of passengers for sitting on tarmac.
Posted by: Richard Edelman at February 26, 2007 4:17 PM
I agree that it deflected attention from a catastrophic infrastructure failure on JetBlue's part. But I see parallels between the customer bill of rights as an attempt to lead/better the industry after a fiasco, and the improvements made after the Tylenol scare (tamper-proof caps, etc.). In the YouTube video, JetBlue's CEO mentions the specific things they will be doing to improve their communications between HQ and the "ground forces" and I can only take them at their word. Having once sat on the tarmac for a couple of hours, I can't bear the thought of sitting for some of the longer times mentioned. And any airline that consistently has customers waiting on the tarmac for that long needn't worry about understanding and anticipating passenger tolerance, because it will quickly find itself out of business. I can understand if your issue with the passenger bill of rights is that at a certain point, no amount of vouchers or refunds will overcome the negative experience of having once spent X hours in a tiny seat on the tarmac. Therefore, it's only part of the larger remedy. From a PR standpoint, I think it was an effective component to what is ideally an operational infrastructure and communications overhaul. However, when customers don't care why they are rotting on the tarmac in the first place — only that they should be in the air — pulling out a bill of rights is preferable to pulling out an updated P&P manual.
Thanks for the quick reply!
Posted by: Eric Hansen at February 26, 2007 5:27 PM
I find #3 particularly true. It also speaks in general to the way large firms are organized by practice areas and how this matches up to client needs. It will be interesting to see how long this model holds up.
Posted by: Leo Bottary at February 26, 2007 7:29 PM
It's great to see Edelman doing the work for 18Seconds. Now if I could just get my hands on a bulb...
Trackback: http://www.jobsearchmarketing.com/2007/02/the_night_the_l.html
Posted by: Matt Martone at February 28, 2007 12:17 PM
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| TrackBackFebruary 16, 2007
Business – Its Time to Lead
One of the most interesting dichotomies in this year’s Edelman Trust Barometer is the rise in trust in business as an institution but the decline in trust in CEOs as spokespeople (down from 28% to 22% in the US, lower in key European markets). As I have traveled around to Silicon Valley, London, Frankfurt, Chicago, Los Angeles and New York City to discuss this year’s findings, I am always asked about this seeming contradiction.
Here are a few thoughts on why trust in business is rising. Business is helping to create prosperity and new jobs, especially in the developing world--trust in business especially high in the BRIC countries of Brazil, Russia, India, and China). Stock markets are buoyant, enriching investors, 401K and pension plan holders. The pace of product innovation has quickened, improving quality of life and also provides opportunity for employees to be more productive. Business is taking on important issues, such as environment and HIV/AIDS. Many companies are responding better in crisis-- Siemens immediately appointed an outside legal counsel to conduct an investigation of bribery charges, promising to “let the chips fall where they may.”
At the same time, CEOs have largely adopted a “duck and cover” approach since the onset of the crisis of confidence in 2002 stemming from accounting scandals (Tyco, Global Crossing, Enron, and Parmalat). More recently, the questions about executive compensation (Nardelli at Home Depot) and backdating of stock options (McGuire at United Health) have undermined public trust. Matthew Bishop, US editor of the Economist, remarked today at our Trust Barometer client briefing event in Chicago, “Business leaders have been rightly pilloried. They have let the side down. They have damaged their own ability to operate effectively.”
We are now at a point where CEOs and other members of top management have to lead in a more public manner. They must go beyond their comfort zone of financial analysts and institutional investors, of numbers and quarterly performance. There are critical issues to be addressed in the coming months, such as the preservation of free trade agreements in the face of rising political pressure to preserve jobs in the US and EU. Business leaders need to explain why open markets are critical for the future prosperity of the global economy and how trade benefits each individual consumer, and benefits employees. The same sort of argument must be joined about our energy future and the appropriate mix of oil and gas, nuclear, plus alternative energy options. The progress of science, whether stem cells or genetically modified seeds, will be halted without evidence of the tangible future benefits. As Alan Murray of the Wall Street Journal said so well, public companies are now political institutions and need to solicit support from stakeholders including NGOs, employees, communities as well as shareholders.
According to a McKinsey study released in December, CEOs are actually aware of the need to change. The study stated that half of American CEOs know they should shape the debate on key issues but only 14% said they are doing it now. The key reasons for not entering the arena: lack of knowledge of the issues; absence of a strong network of peers on the issue; fear of negative publicity. Neville Isdell, CEO of Coca Cola, said it well at the World Economic Forum in Davos. “CEOs have had their heads below the parapet since 2002. We have not engaged enough in the debate. It is time for business to step up. We need strong CEO leadership to embolden politicians on trade, environment and other issues.”
There is a very important role for PR professionals in facilitating this transition for CEOs, so they will take the leadership role on key issues. We have to explain that such CEO advocacy does not imply a rock star positioning that was so prevalent in the 90s. Nor does it mean that a CEO is distracted from his or her primary task of achieving financial results. By moving from defense to offense, by taking on bold initiatives such as Jeff Immelt’s Eco-Imagination for GE, CEOs will be able to inspire employees, reach out to new customers and have a robust interaction with new influencers such as NGOs. Our job in PR is to think of ourselves as more than listeners and communicators; we are actually relationship managers with important constituencies who are demanding a mutually beneficial outcome on important issues. As always, I appreciate your views on how we can help Business lead.
Posted by Edelman at 10:02 AM |
Comments
Interesting stuff, indeed.
I agree that CEOs need to "engage," "step up," and otherwise lead more than they have. And doing so will eventually cause CEO trust ratings to catch up to business ratings.
But I worry about your suggested "very important role" for PR.
A great job of selling a lousy product is the way to ruin. When you use phrases like "moving from defense to offense," I hear the risk of sizzle without the steak. This has been the response, broadly speaking, of the pharmaceutical industry--a natural one, given the importance of marketing, but an unfortunate one--to its critics. Using the language of conflict--defense and offense--is not typically the best way to establish better relationships with new constituencies.
Try googling BP Green ad campaign. When I did it just now, the first 9 items were critical of BP, ranging from articles citing consumer skepticism to the nummber one listing, an outright satire of BP. What are the risks to a company like BP of being perceived as cynical?
When you define PR as analogous to relationship managers, I'm not sure I buy it. A "relationship manager" in the professional service industries of accounting or consulting is generally charged with articulating the voice of the client, solving problems, helping the company serve the client--and as a result, developing business.
Here's how one employment ad for a "client relationship manager" puts it:
"XYZ is currently searching for a Client Relationship Manager.
"As the Client Relationship Manager you will be working directly with some of North America’s top [blah blahs.] You will become our client’s trusted business partner by proactively managing their account and taking responsibility to make sure their needs are met. Ultimately, you will be responsible for the overall client experience and act as the face of the company to ensure the voice of both the client, and the voice of the company is heard.
Is that really what you mean?
The language of "client relationship manager" doesn't typically rhyme with "from defense to offense"--an inherently competitive, rather than collaborative phrasing--or with "bold initiatives." The best relationship managers don't institute bold initiatives; they go out and listen, deeply and intently, then quietly mobilize forces back in the company.
Finally, when you say it "doesn't mean that CEO is distracted from his or her primary task of achieving financial results," doesn't that beg the question? If corporations are indeed coming to be political entities, as you correctly suggest, then their new and evolving role needs to be addressed head on. By guaranteeing the old single-stakeholder role at the outset, you don't help the debate.
Let me try to be constructive. Leaders aren't leading. Yes, you can help them lead by framing the issues to the various constituencies. Implicit in that approach is that they are helpless, that they need help leading.
A far greater service to all if the profession tackled head on the consequences of failure of CEOs to lead. Start with the presumption that they are fully competent to lead, but have been derelict in not doing so.
In this sense, it is a virtue to look within. CEOs must recognize that quarterly earnings, one-way pronouncements, and spin campaigns are guarantors of medium to long term failure with various constituencies. On many issues--energy, environment, free trade, employment, demographics--corporations need to develop a framework for looking longer term than they have, at least in the US.
The PR profession can do a service by articulating political dynamics; by learning from longer-term companies and cultures (e.g. Toyota); by translating the strident language of various political groups into straight business talk that CEOs can understand; by helping CEOs understand that they are living in a new age of transparency; that the impact of cynicism and mistrust is huge and that the solution is not spin control, ads and PR campaigns, but solidly well thought out programs that address issues.
Tell the CEOs that their first instinct should be to address the issues with concrete business proposals--then to sell them. Not the other way 'round. If that's an unnatural act for the PR profession, well, it's time to act unnaturally.
[the posting shows up in preview mode without paragraph breaks, though I intended them in the draft--if you edit, might you add these in?]
Posted by: Charles H. Green at February 20, 2007 10:51 PM
This is a really interesting comment—thorough, constructive. I agree that the best PR is based on substance. I would argue that Wal-Mart’s environmental initiative is just that sort of effort, based on serious change in supplier behavior and commitment to customers. PR should bring these types of big ideas to the table. And you are right to insist on a stakeholder, not a shareholder, model. Thanks for reading my blog
Posted by: Richard Edelman at February 22, 2007 11:29 AM
Richard,
Thanks for the prompt and thoughtful response; and for the high-content blog you produce.
I’ll make it a point to become more familiar with Wal-Mart’s situation. I confess I haven’t followed it closely, and from what you say it sounds like a good model for the industry.
As you might imagine, since my business is built on helping create trust, I’m very interested in your trust survey. Keep up the good work, it’s quite valuable.
Best wishes,
Posted by: Charles Green at February 22, 2007 1:35 PM
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| TrackBackFebruary 8, 2007
The Changing Face of Trust
For each of the past seven years, Edelman has conducted a multi-country research study seeking to understand the state of trust in institutions, the components of corporate trust rankings (nationality, industry, chief executive reputation) and the best means of building trust (media outlets, spokespeople, actions including CSR or philanthropy, local versus global). This year’s study, released just before the World Economic Forum in Davos, offers research on opinion leaders in 18 countries (ten from Europe, four from Asia, two in North America and two in Latin America) with the survey audience 35-64 years of age, in the top 25% of wage earners, and as “media attentive” (reading or viewing three or more media per day). We define trust as “trust to do the right thing.” The margin of error is + or – 1.8% globally, but differs by market. Here are the key findings for the Edelman Trust Barometer 2007.
Trust in Institutions—Business has recovered from a low point in 2002-3, after the Enron/Tyco/Parmalat scandals. It is now the leading institution in trust in eight of the 18 nations. Business is particularly well regarded in the developing world, as the leading institution in three of the four BRIC nations (Brazil, India and Russia). Meanwhile, trust in Government is at an all time low in our seven years of survey work, particularly in the UK (16% down from 33% a year ago), France, and Korea. The gap between trust in business and government in the US is now the widest (15 points) since we began our survey in 2000. The NGO sector (Non Governmental Organizations) continues to be the most trusted institution in several of the developed countries and is a clear favorite in Europe.
Trust in Specific Companies/Nations—There is continued evidence of an American trust discount in Europe and trust advantage in the less developed nations, particularly in Asia. Only American companies seem to show this substantial regional variation in trust. Korean, Japanese and European companies are rated quite evenly across regions. For example, McDonalds is trusted by 60% of Americans surveyed but only 26% of those in the UK, France and Germany, a huge 34% difference. This gap seemed to be shrinking last year for such American icons as Coca-Cola, ExxonMobil, Citicorp and McDonalds but has become even wider than in 2005. In that same period, trust in American brands has soared in China, with McDonalds, Citicorp and Coca-Cola all in the 75-82% range. A European brand, such as Gucci or Electrolux, or Asian brands such as Nissan and Samsung, show quite high scores across all regions, from 60% in the US and EU to 80% in Asia and Latin America. We find that companies with headquarters in Canada, Germany, and Sweden have a consistent trust advantage while those based in Russia, China, India and Mexico are viewed with suspicion, particularly in Europe and North America.
Trust in Industries—Technology is the clear winner among all sectors, placing first in 17 of the 18 nations (China is the sole exception, where energy is most trusted). Our hypothesis for this finding is that tech is seen as an industry of the future, helping to create prosperity through new jobs, providing good returns for shareholders, without any pressing issues, such as environment and it is an industry that gives back to its communities. Entertainment and media consistently score poorly. Our view is that the industry is necessarily linked to celebrities, is seen as largely an American import (and suffers from the ‘trust discount’ for US companies) and is not seen as philanthropic.
Trusted Information Sources—Business magazines continue to be the #1 credible source for information about a company in most markets, though it is important to note that in China the top source is television while in Japan and France it is newspapers. Stock or industry analyst reports (think Lehman Brothers or Forrester) generally rank as the second most credible source, a very significant change from 2003, reflective of the increased confidence in the independence of analysts. Both a company’s own website and blogs continue to lag as sources (the latter is likely a reflection of our older age demographic since blog readers tend to skew younger. We will amend study methodology for next year).
Trusted Spokespeople—The remarkable rise of the “Person Like Yourself” as credible spokesperson from 2003-6 (from 22% to 68% in the US in that period) saw a decline this year (in the US, trusted by 51%), but still ranks as the #1 trusted spokesperson in most of the countries surveyed. We found that the “Person Like Yourself” shares common interests with you and may be from your profession or local community but is likely not of the same religion, gender or race. Importantly, independent experts such as doctors, academics and financial/industry analysts have nearly comparable credibility to the person like yourself. Meanwhile, the trust in a CEO of a company as spokesperson has gone backward, from 28% to 22% in the US (the numbers are comparable in Europe), while trust in the CEO of your own company is at 31% in the US. Trust in CEOs is markedly higher in both Latin America and Asia. Note that in most markets, employees are more trusted than CEOs.
Here are some conclusions we’ve drawn from the 2007 Trust Barometer:
First, the smart company will communicate on both the vertical and horizontal axis. The top down, one way, controlled messages often from the CEO that have characterized corporate communications is still important. The traditional media, particularly business magazines and newspapers, is vital to achieving credibility. So are expert spokespeople, such as academics, financial analysts and doctors, who can help the CEO carry the message because of their credentials. But the peer-to-peer horizontal conversation, led by impassioned employees and consumers, is now a critical companion.
Second, the proper treatment of employees is the new “green” in building trust as a global company. The number one activity for a socially responsible company is fair treatment of its employees, comparable to how its products meet environmental standards. Positive employee relations are as important as fair pricing of products in being a good corporate citizen.
Third, there is a general decline in trust in all spokespeople and sources of information. That means a company must tell its story consistently and in multiple venues in order to achieve trust. We live in a world—as Linda Stone describes--of continuous partial attention.
Fourth, using seven years of data it is possible to segment influencers into categories. We believe that trust has a personality and that Trust Holders have distinct orientations in how they form or share opinions and how they act on trust in brands. There are Public Activists who engage in outspoken public actions, Social Connectors who share, seek and value public opinions, Solo Actors who take personal action and the Uninvolved whose opinion of brands is not driven by trust reputation. We see that different spokespeople and media will reach these segments; for example, a Social Connector responds best to peers, employees and friends and family.
For more information, a copy of the official report, the media coverage, and findings by region click www.edelman.com/trust/2007/. I welcome your questions and comments about this year’s study.
Richard
Posted by Edelman at 4:14 PM |
Comments
Based on what the Trust Study states, why do more companies not use "People Like Yourself" as spokespeople? It seems as if companies overall are not paying attention to the findings of these reports and it is affecting them negatively. Although the numbers have dropped in the effectiveness of these types of spokespeople, just think of the possibilities if a company 1- was able to push forward with the fair treatment of employees and 2- had a spokesperson that was really on the target market's level as a person "Like Yourself"?
As far as anything I have come across obviously the most successful companies (e.g. Google) treat their employees as peers rather than obligations, however many of these companies do not use spokespeople. When I first read about spokespeople "Like Yourself" using Jared as the Subway spokesperson first came into my mind. When that campaign first came out, the buzz it created alone really changed the whole market for Subway, especially at a critical point in the carb-crazy fiasco that was just starting out.
Do you feel like this has been achieved by anyone out there today? because I sure don't.
Erin Little
Chicago, IL
Posted by: Erin Little at February 13, 2007 2:51 PM
EL
Those companies (Subway and now Dove on the Campaign for Real Beauty) that recognize the power of a person like myself are now finding traction in both the mainstream and on-line media. This multiplies the effectiveness of a campaign. So in short, you are right.
Posted by: Richard Edelman at February 14, 2007 11:22 AM