2011 Edelman Trust Barometer - GLOBAL SUMMARY

trust2011 Edelman Trust Barometer Executive Summary

2 2011 EDELMAN TRUST BAROMETER

Business and Government: Trust Stabilizes Globally

In a year marred by corporate crises and financial turmoil for European governments, the 2011 Edelman Trust Barometer finds trust in business and government markedly resilient and sees a shifting center of gravity. Trust in NGOs, “the fifth estate” in global governance, stays strong.

In this year’s Barometer, a three-part picture emerges of trusters, neutrals, and distrusters of business and gov-ernment (figures 1 and 2). Countries hovering in the 50 percent-range, so called “neutrals,” occupy a middle ground as the divide widens between trusters (over 60 percent, including Brazil and China) and distrusters (under 50 percent, including the U.S., U.K., France, and Russia).

The United States, which last year enjoyed an 18-point spike in trust in business, saw an eight-point drop, placing the world’s largest economic power within five points of last-place Russia. Trust in government tumbled in the U.S., where the two political parties were at loggerheads (see page 4 for more on the U.S.).

In the early years of the Barometer, trust in business and government tended to move in opposition. In-creased trust in one was met by decreased trust in the other. We generally now see the two moving in tandem, an important step as the expectation is for the world’s two dom- inant institutions to work together.

The predominant exception is Ger-many, where trust in business is up by 12 points, but trust in government is down by 10 points—to 33 percent, the lowest of the top 10 economies. In Germany, business is now enjoying the benefit of the Hartz labor reforms, but the government is seeing wide-spread opposition to the country’s bailout of troubled European nations.

Figure 1: Emerging markets dominate as “business trusters;” U.S. drops to within 5 points of Russia (Top 10 GDP countries)

How much do you trust business to do what is right?

Brazil India Italy China Japan Germany France U.S. U.K. Russia

67%70%

59%64% 62% 61%62%

81%

+19

2010

49%44%

36%

48%

-8

54%

46%

57%

53%

42% 41%

20112010 20112010 2011

40%

52%

+12 +12

0

10

20

30

40

50

60

70

80

90

100Trusters Neutral Distrusters

Responses 6-9 only on 1-9 scale; 9=highest; Informed publics ages 25 to 64

Figure 2: China and Brazil drive rise in trust in government; U.S. now on par with Russia (Top 10 GDP countries)

How much do you trust government to do what is right?

43%49%

2010 201120112010 2011

China Brazil Japan France Italy India U.K. U.S. Russia Germany

39%

85%

42%

51%

36%

45%

74%

88%

+14 +46+46

-6

43%

33%

46%40%

43% 44%38%38%

43%39%

0

10

20

30

40

50

60

70

80

90

100

-10


Trusters Neutral Distrusters

3

2009 2011

32%

49% 48%53%

80%85%

75%

82%

China India U.S. U.K.

+7

2008 2011

83%87%

78%

90%

46%

16%

25%

71%-46

-30


+12

0

10

20

30

40

50

60

70

80

90

100

2008 2011

78%73%

69%73%

93% 93%

77%

98%


+21

+17

Figure 3: Banks’ reputation plummets in West, while tech stays high worldwide; automotive climbs across the globe


How much do you trust the following industries to do what is right?

Banks Technology

Trust in Banks Plunges in West; Technology Holds Firm at No. 1; Automotive Rallies

Technology, which is in the No. 1 spot for the third straight year, is now followed by automotive and telecom-munications. In the U.S., where GM posted the largest IPO in history, the automotive industry earned back half of the trust it had lost in 2009. The starkest contrast, however, is between technology and banks (figure 3). The dramatic three-year drop in trust in banks in the West keeps this industry stuck at the bottom in global industry rankings. By contrast, in China, where banks are credited with financing increased prosperity, trust surged by 12 points to 90 percent.

All four BRIC countries have gained trust as headquarter countries for global companies (figure 4). The trust comes mainly from fellow emerging markets, indicating that the BRIC strategy to target emerging economies is producing results. However, when compared to Germany and Canada, longtime leaders in the most-trusted-headquarter-country category, the BRICs still have a ways to go to be considered reliable business hubs.

In 16 of the 23 countries surveyed, NGOs are as or more trusted than business. Historically trusted most in developed markets, NGOs continue to gain trust in emerging markets (figure 5). In Brazil and China, where NGOs are on par with business, higher economic levels come with a greater concern for environmental responsibility, education, and public health, the very province of NGOs.

Figure 4: Trust in BRIC-based companies rises

How much do you trust global companies headquartered in the following countries to do what is right?

2010 20112010 2011

0

10

20

30

40

50

60

70

80

90

100

CanadaGermany

75%76% 76%75%

Brazil India RussiaChina

39%42%

36%40% 39%

34%30%

35%

+3+5 +5

+4


0

10

20

30

40

50

60

70

80

90

100

Brazil China U.K./Fr/GerU.S.

61% 63%

81% 80%

Business NGOs

46%

55%48%

55%

57%

53%

Figure 5: Trust in NGOs on par with business in emerging markets

How much do you trust business to do what is right? How much do you trust NGOs to do what is right?

Auto


20

25

30

35

40

45

50

55

60

65

70

NGOs Business Government Media

Jan 2008 Jan 2009 Jan 2010 Jan 2011

63%

46%

59%

43%

45%

31%

36%

30%

63%

46%

54%

38%

46%

55%

40%

27%

Worldwide financial crisis

Figure 6: In U.S., 2011 decline mirrors 2008-2009 drop; only country to see trust fall in all four institutions

Responses 6-9 only on 1-9 scale; 9=highest Informed publics ages 25 to 64

Trust in institutions: 2008-2011

The United States: The Stark Exception

In a reversal of last year’s uptick, the U.S. suffers an across-the-board tumble, with declines in all four institutions.

The downturn in trust in the U.S. in 2010 echoed the drop that resulted from the worldwide financial crisis. While not as steep a decline, the country lost half the gains it earned back in 2009 (figure 6).

Several explanations emerge for the grim U.S. picture: the prolonged fighting between business and government; unemployment rates— not the full recovery the country expected; and the nation’s spot as the epicenter of many of the head-line crises of 2010, including the oil spill, product recalls, and the SEC investigation of Goldman Sachs.

A four-year view paints a bleaker picture according to the Trust Barometer Index, in which each country’s score is an average of its trust in business, government, NGOs, and media. The U.S., fourth from the top in trust in 2008, sinks to the bottom this year, barely above the U.K. and Russia. On the other hand, the BRICs hew closer to their 2008 rankings, with the exception of Brazil, which climbs sharply.

But if American business is largely not trusted by Americans, the opposite appears to be the case for American business abroad. Continuing a trend we have seen in recent years, trust in U.S.-based multinationals moved up in many markets, including China (+15), Brazil (+16), India (+16), and Indonesia (+16), possibly a halo effect of President Obama’s good standing abroad.

Trust Barometer Index U.S. drops while Brazil rises in composite scoring

Responses 6-9 only on 1-9 scale; 9=highest; Informed publics ages 25 to 64 Composite score is an average of a country’s trust in business, government, NGOs, and media

Global

Brazil

China

Mexico

India

Canada

S. Korea

Japan

France

Germany

U.S.

U.K.

Russia

2008 2011

Global

Mexico

China

India

U.S.

Japan

S. Korea

Canada

Brazil

France

U.K.

Germany

Russia

—

69

62

60

53

50

50

48

48

44

43

36

36

55

80

73

69

56

55

53

51

50

44

42

40

40

5

Credentials Count More Than Ever

Trust in experts rises—and after years of being at or near the bottom, CEOs see increase in credibility.

Trust in all credentialed spokespeople is higher this year, signaling a desire for authority and accountability —a likely result of the skepticism wrought by last year’s string of corporate crises. Since 2009, academics and experts—long the front-runners—earned another eight points to climb to 70 percent. For the first time, the Barometer asked about the credibility of a company’s technical expert who is, in turn, deemed “very” or “extremely credible” by a vast majority (64 percent).

CEOs are now in the top tier of trustworthy spokespeople, a strik-ing shift from two years ago when they sat second from the bottom (figure 7). Fifty percent say CEOs are credible spokespeople about

a company, a 19-point increase over 2009.

By contrast, a “person like me” dropped by four points globally in that time, falling from the top three to the bottom two, virtually swapping spots with the CEO. This may be a result of changing attitudes about what constitutes “a person like me,” rather than an indication of a signifi-cant decrease in the actual credibility of peer-to-peer communication. With some estimates indicating that the average Facebook user does not know one-fifth of the 500 people typically listed as friends on his or her page, it is reasonable to ask whether the meaning of the word “friend”—and by association “a person like me”—has become devalued.

In the wake of last year’s crises, the Barometer posed a series of questions about who should speak for a company in a challenging time. “Multiple voices” is the first conclusion drawn, as CEOs, third parties, company chairmen, and technical experts all have a role to play when a company confronts a crisis. In the case of a product recall, the technical expert and the CEO are the preferred spokespeople (30 percent and 37 percent, respectively). In a situation where the local community has been damaged, more people want to hear from the CEO (38 percent) than they do a third-party representative (17 percent), government official (12 percent), or company technical expert (11 percent).

Informed publics ages 25 to 64 in 20 countries“Extremely credible” and “very credible” responses only

Academic/expert 62%

Financial/industry analyst 49%

Person like yourself 47%

NGO representative 41%

Regular employee 32%

CEO 31%

Government official 29%

Academic/expert

Technical expert in company

NGO representative

Financial/industry analyst

Person like yourself

Government official

CEO

Regular employee

70%

64%

53%

50%

47%

43%

43%

34%

Figure 7: CEOs lead rise in trust in authority, but “person like me” drops amid flight to credentialed spokespeople

2009

If you heard information about a company from one of these people, how credible would that information be?

2011


Surround Sound Needed in Time of Skepticism

Figure 10: Search engines “go-to” source; online news second

A jumbled media landscape and the domino effect of corporate and government crises have increased skepticism in key Western nations.

Online search engine

Online news sources

Company website

Print (newspapers/magazines)

Friends and family

Social media

Broadcast (radio/TV)

Online news sources

Print (newspapers/magazines)

Company website

Online search engine

Friends and family

Social media

Broadcast (radio/TV)

15%

12%

29%

19%

11%

7%

5%

16%

14%

23%

17%

11%

10%

7%

Where do you generally go first for news about a company? Then where do you go?

Informed publics ages 25 to 64 in 23 countries

While trust in media as an institution inched up globally, it declined signifi-cantly in the U.S. and the U.K. (figure 8). As in 2009, the majority need to hear something between three and five times to believe it (figure 9). But in the U.S. and the U.K., approximately one-quarter say they need to hear something six or more times to believe it, twice as many as two years ago.

Search engines rank No. 1 as the place people go first for informa-tion about a company, followed by online news sources, print, and broadcast media (figure 10). Their second stop is on the screen as well, with 23 percent saying they go to online news sources, which do include the Web versions of traditional media like newspapers and television. Thirty-three percent globally say they trust newspapers a great deal, followed by 31 percent who say the same for television.

The data portray a savvy consumer who turns first to search engines to see what is available on the topic of interest, and who then seeks out traditional media to confirm or expand on what he or she has learned. Information ubiquity has changed the playbook for corporate communications, the data suggest, signaling to companies that they cannot simply be present with their messages, but rather must be omnipresent through an approach that encompasses mainstream, new, social, and owned media.

First Source Second Source

Figure 9: Repetition enhances credibility

How many times in general do you need to hear something about a specific company to believe that the information is likely to be true?


10+ times6%

Don’t know2%

Twice 22 %

3 times33%

3 to 5 times 59%

4-5 times26%

6-9 times8%

Once 4%


How much do you trust media to do what is right?

36%

48%

2010 201120112010 2011

China Brazil India Japan France Italy Germany Russia U.S. U.K.

54%

73%

58%50%

36%

45%

63%

80%

+17

31%22%

38%45%

38%39% 37% 37% 37%

27%

0

10

20

30

40

50

60

70

80

90

100

-9-11

+19

+12

Trusters Neutral Distrusters

Figure 8: Developed markets more distrustful of media (Top 10 GDP countries)

7

negative information57% will believe

positive informationwill believe

15%

after hearing it 1-2 times


negative informationwill believe


need to hear positive information 3-5 times

to beleive it

57%

25%

51%positive information

will believe



This year’s Barometer explored whether trust can diminish the impact bad news has on a company. The answer is yes (figure 12). Fifty-seven percent will believe negative infor-mation about a company they do not trust after hearing it just once or twice. When a company is trusted, however, only 25 percent will believe negative news about it after hearing the news once or twice. The same holds true for positive information, with far fewer believing good news about a distrusted company. These findings send a strong signal that corporate leaders would be well advised to create a trust foundation so that positive information has an echo chamber in which to resonate.

The most important corporate repu-tation factors remain quality products, transparency, trustworthiness, and employee welfare, while a company’s financial performance is tied at the bottom with its having widely admired leadership (figure 11).

When a company is distrusted When a company is trusted

Figure 11: Quality, transparency, trust, and employee welfare most important to corporate reputation

High quality products or services

Transparent and honest business practices

Communicates frequently

Company I can trust

Good corporate citizen

Widely admired leadership

Financial returns

Prices fairly

Treats employees well

Innovator

65%

63%

69%

65%

55%

55%

51%

46%

39%

39%

Responses 8-9 only on 1-9 scale; 9=highest. Informed publics ages 25 to 64 in 23 countries

How important are these factors to corporate reputation?

Trust Is a Protective Agent

Figure 12: Trust protects reputation

Trust has tangible value. Companies that are distrusted and facing an onslaught of negative news will have a harder time changing opinion after the storm than they would if they were trusted at the outset.


The 2011 Edelman Trust Barometer is the firm’s 11th annual trust and credibility survey. The survey was produced by research firm StrategyOne and consisted of 30-minute telephone interviews conducted from October 11-November 28, 2010, with the exception of France and Germany, fielded January 3-13, 2011. The 2011 Edelman Trust Barometer survey sampled 5,075 informed publics in two age groups (25-34 and 35-64) in 23 countries. All informed publics met the following criteria: college-educated; household income in the top quartile for their age in their country; read or watch business/news media at least several times a week; follow public policy issues in the news at least several times a week. For more information, visit http://www.edelman.com/trust or call 212.704.4530.

About the Edelman Trust Barometer About EdelmanEdelman is the world’s largest independent public relations firm, with wholly-owned offices in 53 cities and 3,700 employees worldwide. Edelman was named Advertising Age’s top-ranked PR firm of the decade and one of its “2010 A-List Agencies” and “2010 Best Places to Work;” European Excellence Awards’ “2010 Agency of the Year;” PRWeek’s “2009 Agency of the Year;” Holmes Report’s “Agency of the Decade” and “2009 Asia Pacific Consultancy of the Year;” and among Glassdoor’s top five “2011 Best Places to Work.” Edelman owns specialty firms Blue (advertising), StrategyOne (research), Ruth (integrated marketing), DJE Science (medical education/ publishing and science communications), and MATTER (sports, sponsorship, and entertainment). Visit www.edelman.com for more information.

The Transformation of Trust

Trust in business may have stabilized globally, but it is different and condi-tional, premised on what a company does and how it communicates. In this transformation, there are new expectations for governments, cor-porations, and leaders—as well as a new architecture for earning trust. It supplants the “fortress framework” in which corporations have customarily protected their brands, controlled information, and given short shrift to partners, aiming to maximize returns solely for shareholders. The new model, a “trust triangle,” is based on the expectation for companies to act collaboratively to benefit society not just shareholders (What); be trans-parent about their operations and profit engines (How); and engage using a range of spokespeople and all forms of media—mainstream, new, social, and owned (Where). Trust is no longer a commodity that is acquired, but rather a benefit that is bestowed. Business has the opportunity to build an enduring foundation of trust by asking its leaders to commit to a strategy that brings value to both investors and society.

Richard Edelman President and CEO, Edelman

Question A Question B

Franc

eSp

ain

S. Ko

reaBr

azil

72% 71% 71%67%

63% 62%58%

89% 89% 89%

China

Mexico

Indon

esia

Canad

aNeth

erlan

dsSw

eden

Russ

iaAu

strali

aSin

gapo

reAr

genti

na

85% 85% 85%82% 81% 81% 80% 79% 78% 78%

82% 82%

62% 61%56%

70%74%

57%

66% 69%73%

67%63%

50%

German

y

91%

49%

India

Italy

74% 73%

61% 63%

48%53%

44%

53%

42%

55%

0

10

20

30

40

50

60

70

80

90

100

U.K.Ire

land

U.S.

Polan

d

Japa

nUAE

Figure 13: Expectations high for business to invest in society


A. Agree: Should corporations create shareholder value in a way that aligns with society’s interests, even if that means sacrificing shareholder value? B. Agree: Should government regulate corporations’ activities to ensure business behaves responsibly?

© Edelman, 2011. All rights reserved.

On the cover, from top left: newspaper stall in Dublin, Ireland; Wikileaks founder Julian Assange at press conference; oil-soaked pelican in wake of BP Deepwater Horizon rig explosion; Goldman Sachs chairman and CEO Lloyd Blankfein testifies before Senate Subcommittee on Investigations; unemployed worker holds sign at rally; Dilma Rousseff, Brazilian president, receives presidential sash from Lula da Silva; relatives of Foxconn employees mourn family members following suicides at Chinese manufacturer.

Old Trust Framework New Trust Architecture

Control Information

Focus Solely on Profit

Prot

ect t

he B

rand Stand Alone

WHAT

HOW

WHERETra

nspa

renc

y Engagement

Profit with Purpose

2011 Edelman Trust Barometer - GLOBAL SUMMARY

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