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February 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 February 8, 2007 4:14 PM
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Edelman’s annual trust survey is out, and it makes fascinating reading for anyone interested in trust.
The study, called “The Changing Face of Trust,” provides survey data on “the state of trust in institutions, the compone [Read More]
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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