Almost two years of high-profile corporate scandals have changed the way the nation¡¦s journalists approach business stories, sparking significant changes in how media weigh company information, view corporate leadership, measure corporate success and, ultimately, report company news, according to results of the Euro RSCG Magnet Survey of Media.
The study¡Xa continuation of the annual media surveys conducted by Euro RSCG Middleberg in partnership with Steven Ross, associate professor at the Columbia University Graduate School of Journalism¡Xchronicles journalists¡¦ growing distrust of senior executives and other established sources for business coverage and reveals a credibility crisis that spans all of corporate America, not just those companies embroiled in controversy.
As CEOs and others in the C-suite lose credibility in the eyes of the media, a host of alternate sources and attributes are emerging as the preeminent drivers and shapers of business coverage. Journalists are more likely to be influenced by consumers¡¦ experiences with a company, the quality of that company¡¦s products or its status as an industry innovator than by the assessments and pronouncements of its CEO.
According to the study¡¦s authors, ¡§This represents a significant shift from the way reporters have been covering companies for the last two decades and indicates that media will be making coverage decisions and gauging business performance by a new set of criteria in the years to come.¡¨
This year¡¦s study surveyed 1,875 journalists in North America on the critical topics of ethics, credibility and influence to assess how the growing number and scale of corporate scandals in the U.S. and abroad are affecting reporting practices.
The findings build on last year¡¦s study, which established that corporate misbehavior¡Xand personal ethical lapses by individual executives¡Xwere affecting the way journalists covered business stories. This year¡¦s results show a continuation of that trend and identify the sources and attributes that have arisen to fill the void. As journalists turn an increasingly jaundiced eye to CEOs, they are looking instead at consumer experience, product quality and innovation to inform their reporting. Specifically:
„X Only 14 percent of respondents say they are very likely to turn to CEOs for information. CEOs fell to ninth place from last year¡¦s fourth place as the most-frequently cited sources.
„X Respondents list product quality as the most important attribute they consider when reporting on a company overall. Forty-six percent say it is an absolutely critical attribute when reporting on a company in general, and 31 percent say they consider product quality more carefully this year.
„X Respondents rank innovation as one of the top three criteria for measuring a company¡¦s success. Nearly 80 percent say innovation is important when reporting on a company overall. Thirty-three percent consider more carefully today the innovation companies demonstrate; 37 percent believe innovation is absolutely critical when looking at a product or service; and 24 percent believe it is the most critical element when evaluating a company overall.
„X Customer satisfaction ranks third in the attributes more carefully examined by today¡¦s media, second only to innovation and product quality: 32 percent say they consider customer satisfaction at the companies they cover more carefully today than one year ago. Thirty percent say client commitment/customer service is absolutely critical when evaluating a company.
While these findings underscore the low esteem the media hold for corporate leaders, they also indicate, in no uncertain terms, how companies can recapture media regard and encourage positive coverage.
¡§The results have profound implications for how business leaders must act to build, manage and safeguard corporate reputations both within the media and the wider world,¡¨ says Aaron Kwittken, president and chief operating officer of Euro RSCG Magnet. ¡§As journalists adopt more democratic and tangible measures of corporate success, it will increasingly be the company¡¦s commitment to customers, record of innovation and dedication to product quality that will testify to its leadership, rather than the profile of the CEO or management team.¡¨
Consumers, product quality and innovation aren¡¦t the only media influencers, study results show. Journalists also hold academics and industry (not financial) analysts in high regard. In fact, media currently view academics as the most credible and influential sources for their stories¡X40 percent indicate that academics are very likely to shape their views of an issue and 80 percent cite information from academics in their routine reporting.
Readers, too, wield significant amounts of influence with reporters: 85 percent of media indicate that consumers and readers are very likely to somewhat likely to influence their perceptions.
The growing importance of consumers and readers to the media coincides with the rise of what Euro RSCG calls ¡§prosumers,¡¨ proactive, empowered, informed consumers who have shifted power away from manufacturers, retailers and marketers toward the end user. With more product choices, more media options and greater access to information, today¡¦s prosumers are able to exert far greater control over the purchasing process, as well as on the value of a company¡¦s brand.
With media spurning information from CEOs and turning instead to prosumers and such third-party influencers as academics, the old corporate communications paradigm of company to media to consumer has become significantly less effective, the authors say.
¡§To build visibility and credibility simultaneously, companies must break free from traditional, linear communications models and adopt a more proactive, holistic approach,¡¨ says David Kratz, CEO of Euro RSCG Magnet. ¡§An integrated communications strategy that unifies messaging across all marketing disciplines is only part of the answer¡Xalthough certainly a critical part.
¡§But companies must go even further if they are to leverage the opportunities created by the emergence of the prosumer. They must partner with and start a dialogue with customers, consumers, academics, media¡Xbasically each and every stakeholder¡Xand inspire them to carry the company message.¡¨
After asking journalists to weigh in on corporate ethics, study authors also asked them to report on the ethics of their own newsrooms. With highly publicized reporting scandals fresh in their minds, more than half reported being more careful in fact-checking stories and conducting their own research. But only a third reported that their companies had instituted additional policies to combat the apparent rise in journalistic fraud, a disturbing trend, says Ross.
¡§While the majority of the nation¡¦s journalists say they are following professional practice codes more carefully this year, too few newsrooms are addressing journalistic improprieties at the enterprise level,¡¨ says Ross, who notes that the release of these survey results follows fresh reports of reporting scandals. ¡§Until news organizations begin funding quality-control and training initiatives, reporters will continue to have the opportunity and motivation to falsify sources and stories.¡¨