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January 25, 2010
Edelman Trust Barometer 2010 - A New Mandate for Business
I have just arrived in Davos, ready to present the findings of our tenth annual Edelman Trust Barometer at a breakfast panel co-hosted by the Financial Times tomorrow morning. Here are a few of the important conclusions from this year's 22-country study of opinion formers, who are "media attentive," have more than $75,000 annual income and at least a college degree:
What does it mean for business in the coming year?
- Trust in business has stabilized and is trending upward, with a substantial jump of 18 points in the US (from an all-time low of 36% in 2009 to 54% in 2010). Trust in business falls into three categories (High-Brazil, China, India, Indonesia-at 60-70%; Middle-Canada, Japan, US-at 50-59%; Low-France, Germany, Russia, UK, Korea, -at 35-49%).
- Business tends to be more trusted than Government and less trusted than Non-Governmental organizations. Government trust has risen in the US (substantially), France and Germany, falling in Russia and mostly stable elsewhere.
- NGO trust has jumped profoundly in China in the past six years, from 31% to 56%, a level comparable to that found in Western Europe, India and the US. About 70% of respondents trust a company more when it partners with an NGO on important social issues.
- The most trusted nations for company headquarters continue to be Canada, Germany and Sweden, all of which are social democracies. Trust in US headquartered companies jumped 10 points to 61% this year, most notably in Germany and Russia. The least trusted nations are China and Russia, though China's scores rose from 27% to 34%.
- The most trusted industry is still technology, achieving rankings of 80% plus in most countries (leader in 20 of the 22 markets surveyed). The banking industry has suffered a profound fall from grace, with three year declines of up to 39 points in markets ranging from the UK to the US to Germany. Banking remains highly trusted in China and India. Automotive staged a comeback and is very highly ranked in developing markets.
- Credibility of chief executives has recovered but remains well below that of academics, financial analysts and NGO representatives. In a reversal of past trend, a "person like myself" has seen a drop in trust and fellow employees has remained stable, now at levels comparable to CEOs.
- Business magazines and analyst reports have widened their lead over TV, radio and newspapers as the most trusted sources of information about companies over the past few years. Corporate advertising is the lowest at 14%.
- The three leading factors burnishing corporate reputation are now "quality products and services, a company I can trust and transparency of business practices." This stands in stark contrast to 2006 Trust Barometer data for the U.S., where "top ranked leadership and strong financial performance" were two of the three key trust factors along with quality products. Financial results are now the least powerful factor in positive corporate reputation in most regions.
- There remains great skepticism about future behavior of business, with almost 70% expecting "a return to business as usual" by companies and financial institutions once the crisis is over. Two-thirds of respondents expect government to have active influence over the financial sector. More than 70% said reducing the gap between senior executive and ordinary employee pay and firing underperforming management was central to restoring trust in companies.
- Stakeholder society supplants the shareholder society: Companies will need to listen to and engage a wider range of stakeholders than in the past. Business must be ready to change its policies. This is the time for business to demonstrate its ability to deliver both profit and purpose, to prove that capitalism is a force for change and for the common good.
- Practice private sector diplomacy by partnering with government and NGOs: The relationship between business and government is very fluid, with populism likely to flare up around issues of compensation, employment and trade. The power of NGOs is enhanced by the new emphasis on sustainable consumption and supply chain; partnership will be necessary on important societal issues.
- Be transparent and communicate frequently across all channels: There is no longer a single/small group of credible sources of information. The new influencers--from bloggers to consumer enthusiasts--will continue to gain share-of-voice from traditional media. Cultivate a wide circle of spokespeople with substantial expertise and participate in conversation in real time across every channel, because people need to hear or read something five times in different places in order to achieve belief.
- Prominent CEO Leadership: Today, transparency and trust are more central aspects of reputation. The chief executive officer needs to be visible and communicative, especially with his employees. They will take the story forward in their own way to friends and family. Academics and other experts will provide added credibility.
Posted by Edelman at 12:39 PM |
Comments
This is great material for any senior executive trying to bring thought leadership to the client table. Thanks!
Posted by: Barry Collodi at January 28, 2010 7:23 AM
Interesting insights as always, Richard. Particularly your comments regarding transparency and leadership. As we watch the Toyota recall play out, it's clear to see the significance of how leaders handle times of crisis. Hopefully CEOs and their teams will take serious note of the importance of communicating early, often and openly in the midst of a crisis...given its determining effect on reputation, profits and trust.
Posted by: Michele Nix at January 30, 2010 4:21 PM
Richard, there are always some interesting findings from the suervey. But what jumped for me was the massive drop in trust of peers.
Here's more: http://su.pr/1ePOQZ
Posted by: Tom Foremski at February 2, 2010 10:58 PM
Interesting take on the Trust Barometer as usual. One point to correct; CEOs are not trusted source of information. You must utilize employees, academics, NGOs and others in the supporting cast around the CEO.
-Richard
Posted by: Richard Edelman at February 4, 2010 11:53 AM
Entering the second decade of the 21st century, is there a more pervasive issue affecting stakeholders' economic, social and political outlooks than trust? If not, leaders, that realize that results are no longer the sum of the parts but rather the product of their interactions, should look into the root causes that short-circuit effective interaction.
Regardless whether the unsatisfactory interaction is of an economic, social or political nature; the causes that adversely inhibiting effective interaction will tend to relate to: prior result (tract record), integrity or lack thereof, competencies and intent (agenda).
Intent/agenda is likely to have played a significant role in this year’s Trust Barometer’s decline with respect to the media. If intent/agenda makes the media’s message resemble propaganda rather than news, why shouldn’t trust decline?
Posted by: Hugh Campbell at February 14, 2010 10:39 PM
This is an extremely interesting blog post, especially for those aspiring to enter the business field or government. It was fascinating to see how the United States ranked opposed to other countries trusting businesses, and how trustworthy NGO’s truly are throughout the world.
It does not come as a shock to me that NGO’s are so well trusted, but that banks are so distrusted. I understand that with the economy the way that it is, trusting anyone or anything with your money can cause individuals to become hesitant. However, it would seem that the trust level would begin to grow as our economy slowly begins to improve.
I guess for any college student, including myself, the technology field still proves to be a field that continues to grow and gain trust throughout the globe. Technology is one industry that no matter what country, it is still widely renowned and vital for countries to continue to grow and prosper. The field as a whole is also growing, as more and more individuals are realizing the multiple opportunities that lie within the technology industry. The advice that was given about being able to communicate across different channels is in my opinion the most important business advice to anyone. Companies must be able to expand and grow with the times. No longer can successful businesses stay planted in one area of communication. They must be willing to globally expand through multiple networks to help grow and prosper their business.
Posted by: Kyle at May 5, 2010 1:00 AM
I agree that trust in business has stabilised, but is at a lower level than financial executives? Can't correlate that after a finance sector induced global recession.
I do however agree with the conclusion that a stakeholder society will emerge over a shareholder model. Executive pay has got wildly excessive, leading to some daft risks. If pay levels were defined by market levels and internal company wide compensation plans, we might see some sense coming back into this world
Posted by: Ian | Executive CV at June 27, 2010 7:46 PM
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| TrackBackJanuary 19, 2010
Breaking Media -- The Vertical Play
I had lunch with my old friend, Jonah Bloom, until recently the editor of Advertising Age and now the CEO of Breaking Media, a collection of vertical professional sites launched over the past four years. Jonah helped expand Advertising Age’s-- a must-read for us-- focus on the broader communications industry, and report the most compelling ground breaking work as well as the big campaigns and brands. The media brands under the Breaking Media umbrella include Fashionista (fashion), Dealbreaker (M&A), Above the Law (legal) and Going Concern (accounting). Here are the highlights from our conversation:
The dispersion of media continues apace with significant implications for PR firms. We have conflicting pressures, with many more media outlets and ever more time-pressured reporters, while procurement officers seek discounts in our hourly rates. We need to employ better software that enables sharing of media lists (preferences, experiences with reporters) while enhancing our training efforts for staff. The second key point is that the nature of influence has been altered, with specialist blogs often the first point of call for decision makers. This is corroborated by a recent study by Edelman’s Public Affairs unit on legislative assistants in Brussels, London, Paris and Washington, in which more than half (55%) polled said they read online sources even before mainstream media. On matters of category-specific interest which lend themselves to discussion, we should counsel clients to break the news on vertical social media.
- The editor of each site has a celebrity borne of subject mastery and provocative content. Bess Levin of Dealbreaker and Lauren Sherman of Fashionista lead from the front, not the traditional editors who assign reporters to stories, then massage the content.
- The best reporters are often those with professional credentials in the given field. At Above the Law material is generated by three former attorneys turned journalists.
- The goal of each site is to get “the community to gather around news that they really want; a good example is salary levels at law firms or investment banks,” said Bloom. “This is a fundamentally different experience than Facebook or Linkedin. We aim to offer insight and conversation.” The look and feel of Fashionista is a hybrid of Facebook and a mainstream media digital site.
- The business model for Breaking Views includes vendor advertising (LexisNexis on Above the Law), conferences, recruitment advertising, and data analysis in verticals. There is quite specific actionable connection to advertisers (Lateral Link, the recruiting firm, has a job of the week listing—and earns a success fee from the employer).
- The stories are enriched from consumer generated content, particularly on Fashionista, with photos and commentary from fashion events around the world.
- The four brands practice “open garden journalism” in that they are constantly posting links to the best sources on the web or MSM content, then adding their own short form commentary. Above the Law teams with Law Shucks on layoffs and with the 10th Justice on possible court appointments. This enables broader coverage than the 5-8 person internal staffs can achieve on their own.
According to our study:
- One in five staffers have changed a policy position based on online sources
- 39% of capital staffers use blogs to monitor policy news and opinion
- 64% of staffers are using facebook as proxy for face-to-face meetings
- The first source of information checked in the morning—aside from email--is the still the leading local media – Washington Post in DC; Spiegel in Germany; BBC.com in the US
Posted by Edelman at 9:44 AM |
Comments
I have found that Twitter lists are a valuable tool for organizing and responding to niche media streams online. The nice thing about Twitter lists is that they are transparent, and can be followed by others.
For example, I follow Steve Rubel's Edelman list: http://twitter.com/steverubel/edelpeeps, and I also frequent http://listorious.com to discover the best Twitter lists developed by other media curators.
Free software such as Seesmic Desktop http://seesmic.com/seesmic_desktop/ allows multiple streams of information, such as Twitter lists, Facebook news, and Twitter search queries, to be managed at once.
With online media sources having greater influence on reputations than ever before, the companies that are able to leverage these free tools to manage media will emerge as leaders.
Effective management of real time news enables a business to act on real time media and establish a competitive advantage by creating an engaged company community and a stronger brand.
Posted by: Garin Kilpatrick at January 20, 2010 7:46 PM
Interesting post, thanks for sharing.
I took some time to check out Breaking Media and they seem to have some interesting discussions around the different niches they operate in.
My interest in this post was especially sparked by the fact from the Edelman Public Affairs unit’s report on legislative assistants that “more than half (55%) polled said they read online sources even before mainstream media.”
I proceeded to read the entire report and I was surprised to learn that:
-Over half of all staffers have first learned about a policy issue online.
-Nearly half of all staffers see blogging as an effective way to reach constituents.
-83% of staffers do not use twitter.
I found the low usage of Twitter quite surprising. One trend that I think will gain momentum in the near future is an increasing use of Twitter by legislative assistants, and others in similar careers.
The recent implementation of Twitter lists is part of the reason why I am predicting a growth in Twitter usage. Twitter lists can provide a way for legislative assistants and others to manage multiple information streams related to their field, in real time, from their mobile device.
Legislative assistants should look to this study by Edelman’s Public Affairs unit if they need evidence of the opportunity in social media tools such as Twitter and others. If legislative assistants are seeking other methods of digital innovation I also recommend checking out the very recent Edelman Digital white paper “Ten">http://www.steverubel.com/ten-ideas-for-the-new-decade-an-edelman-digit”>“Ten ideas for the new decade.”
Posted by: Garin Kilpatrick at January 26, 2010 2:36 PM
Dear Richard,
Kudos for your Davos-comment.
@The Vertical Play. Due to all respect: blogs like fashionista start to get on my nerves royally. I am in the fashion-/luxury business for some years, ceated and published 2 successful lifestyle-magazines in Germany. What`s bothering me with fashionista, glam, and all the sartorials of this world is the impression, they only deal with the subject superficially: some PR-Gags (celebs dressed in Armani/ Dolce& Gabbana/ whatever), Marketing-Schnickschnack and big fotos with small texts.
The fashion-business is a 300-Billion-business! But fashion ist not only about selling skirtseems and the 1000th IT-Bag. What makes the industrie really interesting are background-informationsand the journalistic approach (even more in the internet with the flood of information) - to classify things, put them into perpective and explain contexts. Fashion ist last not least also culture.
Quasi out of selfe-defence I cerated my own (journalistic) interpretation of style. To be ckecked out on www.stylesublime.wordpress.com. With cordial redards!
Posted by: Uschka Pittroff at February 2, 2010 11:27 AM
One thing about this blog really sparked my interest. I understand social networking is an extremely effective way to communicate to mass groups of people, but using Facebook as an alternative to face to face meetings? I feel that it is much too generic for high standard businesses to use.
As a college student, I realize that the effectiveness of online communication that is used today is incomparable to a standard newspaper. I realize that it is inevitable for companies to use online communication techniques to keep up with minute-to-minute news, but, in my opinion, Facebook is too juvenile, common and underdeveloped to take the place of any communication in a thriving company. Honestly, when I hear that a corporation of any kind is using Facebook as an alternative to a face to face talk or even a phone call, it makes me question the company’s maturity and reputation. It’s hard to respect a maturing business that is using the same proxy as pre-teens use to keep up with their friends.
I don’t mean to trash Facebook or online communication at all. Being updated with minute-to-minute news about everything that’s going on in the world 24/7 is a fantastic luxury. I simply believe that companies should depend on it for reasons other than mass corporate communication. Too many companies mistake social networking as the “hip” new way of staying on top of communication. Let your 12-year-old kids use the “hip” ways, let’s be adults.
Posted by: Andrea Leachman at February 26, 2010 12:20 PM
Dear Richard,
Jonah Bloom’s Breaking Media Company is fascinating. In fact, I had to check out the website myself after reading the blog. His innovative strategy of combining the styles of a social network site with a digital media site is the perfect blend for modern-day professionals looking for the latest news in their fields presented in an informal, casual fashion. The four publications deal with very different career fields.
Even the advertisements on the specific brand sites relate to the profession and could be useful to the reader. For the PR professional, the media kits for all four digital publications are easily accessible on the Breaking Media home page. This type of digital media site is a wave of the future. Catering the news to the individual means the stories are relevant, interesting and more likely to be read. In a world where the consumer rarely reads three lines below the headline, what more could we ask for as public relations professionals?
Posted by: Michelle Child at March 1, 2010 9:43 AM
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| TrackBackJanuary 12, 2010
Without Boundaries
I went to a luncheon at the Metropolitan Museum of Art in New York City yesterday in honor of the late Eunice Johnson, who died last week at age 93. Eunice and her husband John were co-founders of Johnson Publishing Company, which owns Ebony (1.2 million circulation) and Jet (900,000 circulation) magazines, trailblazers in Black media and still among the leading media for the African-American community. The Johnsons were close friends of my parents in Chicago; here are my observations about this unique success story from 35 years of acquaintance.
When people question the ability of private enterprise to make positive societal change, I will cite the Johnson family. By employing and training, by imagining and pushing, by reinvesting in their community, they have left a proud legacy. I am fortunate to have known them.
- The Johnsons operated as partners, with John running the publishing group and Eunice the Ebony Fashion Fair, the traveling tour that brought high fashion to local communities. They had deep commitment to both their marriage and their business. As in our family, it was always hard to see where one part started and the other ended.
- They both had stories of perseverance about the early days of the company, when segregation was the standard in America. John told me that he was asked to take the back elevator at the Waldorf Astoria Hotel to get to his room. He doggedly pursued advertising from brands such as Colgate or Seagram, pounding the pavement, through sheer force of will, persuading companies to take the chance. He told me that African Americans are incredibly loyal to companies who ask for their business.
- The family was very aggressive about providing new opportunities where few had been before. The Ebony Fashion Fair was the original platform for such notable models as Pat Cleveland, Judy Pace and Terri Springer, plus black designers such as Lenora Levon and L’Amour. John told me that he employed people even if they had less experience in a given area such as marketing because they would learn the business.
- Both the publishing and Fashion Fair units were agents of empowerment. As their daughter, CEO and Chairman, Linda Johnson Rice said yesterday, “We showed ourselves in living brown color. You deserve to wear these clothes. Dark-skinned models wearing pinks, yellows and reds….sometimes over the top flamboyant and at other times quite practical..we have been the unique laboratory.”
- The Johnsons worked until the end of their days. President Bill Clinton said they had an ageless vitality. “As long as you are doing good, you can be forever young.” He added, “They changed forever how the rest of America sees African Americans and how African Americans see themselves.”
- They gave back to the society. The Ebony Fashion Fair raised $55 million for the United Negro College Fund, hospitals and community centers.
Posted by Edelman at 4:40 PM |
Comments
Thanks for this very informative article on the Johnsons. I love Ebony and Jet magazines, and those dresses from Ebony Fashion Fair were elegant and beautiful. I still keep pages of fine designs I collected from their magazines going back several years, since I am a Artist/Designer and fashion fan, and get new ideas by looking at old ones when designing.
I think all women of color (I am not African American, but of Dutch Caribbean decent) are grateful to the Johnsons for their contributions they have made in the field of publishing and fashion.
I like the way you ended your article by saying: "I am fortunate to have known them".
Millions of people can say the same only if it means knowing them through their magazines and fashions.
Posted by: Glenda Brill at January 17, 2010 9:37 PM
Appreciated reading this. Over the last several months, it's been distressing to hear that Ebony and Jet have been unsuccessful in capturing the younger demographic and are on the brink. As a boomer, I find these magazines only marginally relevant while my Gen Y and Gen X relatives view them as total dinosaurs -- a real shame given the important role they've played for generations of Black folks. Let's hope Johnson Publishing figures out the solution soon!
Posted by: Julia Walker at January 22, 2010 9:25 AM
Reading this blog on the Johnson family was encouraging and influential from a public relations standpoint. Mr. and Mrs. Johnson’s work as a team in developing a successful fashion line and the world’s largest traveling fashion show, while staying rooted in the fundamentals of family life is legendary. As a future career-oriented wife and mother, I found their story to be very inspiring. I hope to have the same balance between my career and family, once I enter the field.
The fashion PR world alone is fast paced and competitive, but with the fight of segregation on their hands, the Johnson family made tremendous achievements. I find it amazing how much has changed in our society since the Johnson family started their business. Then, Mr. Johnson was asked to take the back elevator; now, our country has elected its first African American as president. Differences in skin colors are fading in the industry, and people are becoming more accepting of different ideas.
Posted by: Emily Bell at February 26, 2010 12:29 PM
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| TrackBackJanuary 8, 2010
Losing the News
Alex Jones, who runs the Shorenstein Center on Press, Politics and Public Policy at the JFK School of Government at Harvard, has written a book called, Losing the News. In it he chronicles the shrinking of the “iron core” of authority news. He contends that 85% of authoritative content is published in newspapers, while local TV, radio and bloggers are generally “piggy-backing” onto the investigative or accountability news. He acknowledges that “part of the news crisis is finding a solution that will pay the significant costs of generating accountability news that is essential to our democracy and still allow an acceptable profit.”
Jones has very important views on public relations. In a phone call yesterday, Jones made the case for PR, but in its role as supporting excellence in journalism. “PR people should not try to circumvent the journalists; of all professions, PR has the most to gain from a vibrant media.” He writes, “Good and honorable PR people facilitate good reporting and the best ones know that their clients’ best interests lie in adherence to the truth.” He goes on to blast the video news release as a “stealth bomb of journalistic dishonesty…crafted to look like objective journalism….this is a subversion.”
He argues for “genuine objectivity” in which journalists arrive at a story with bias, but the bias must be tested, arriving at a “practical truth.” To the extent that PR people provide sources that make this process more complete, we are providing an important service.
I asked Jones about the notion that every company can be a media company. He acknowledged the value of a company contributing to the conversation based on its expertise (J&J on baby care as example). He noted the higher standard for content is required. “I would expect both good and bad to be presented in the material. I would demand third party sourcing. I would want a level of objectivity and professionalism in the writing.”
I was at USA Today yesterday with clients. The two reporters conducting the interview talked about how they were being compelled to change their game, to write shorter form content for the web, to append video and photo supporting material. For all of our bravado about how public relations is reinventing communications, let’s be clear-- we need the media to be the credible source of information. We need to play our part by helping reporters--challenged by headcount reductions and diminished travel budgets-- to deliver compelling stories that help to shape the public discussion.
Posted by Edelman at 5:44 PM |