The latest Edelman Trust Barometer, which seeks to measure trust in several major international markets, confirms two seemingly inexorable trends: the declining confidence in U.S. institutions—including multinational corporations—overseas; and the increasing tendency of consumers the world over to trust information from friends, family, and peers more than they trust information from traditional authorities.
Even opinion leaders—the focus on the survey—report declining trust in institutions such as business, government, and mainstream media, as well as figures of authority (CEOs, heads of states) and the increasing influence of “personal webs” that include colleagues, friends and family, and other “people like themselves.”
Only independent experts—including doctors and academics—appear to be maintaining their historic levels of trust.
The sixth annual Edelman Trust Barometer surveyed 1,500 opinion leaders in eight key markets around the world. The results were presented last week at the World Economic Forum in Davos.
Over the past two years, opinion leaders have become increasingly likely to find “a person like yourself” a credible spokesperson for a company or institution: in the U.S., 56 percent say they find such a spokesperson credible, compared to 22 percent in January of 2003; in Europe, 53 percent say the find such a spokesperson credible, compared to 33 percent in January 2003.
In addition, experts who are seen as having no vested interest in the performance of a company—“doctors or healthcare specialists” (56 percent), “academics” (49 percent), and “representatives of NGOs” (47 percent) rank among the most trusted spokespersons.
In the U.S., Europe and Japan, fewer than three in every 10 opinion leaders said that CEOs or CFOs are credible sources of information. In contrast, NGOs have seen their trust ratings increase in the U.S., from 36 percent in 2001 to 55 percent in 2005, and are now the most trusted institution in every market except China.
“The continuing deluge of scandals has caused a dramatic shift in how opinion leaders gather and assimilate information,” says Richard Edelman, president and CEO. “The trust void and democratization of information compels corporations to fundamentally rethink their approach to communications.
“You can’t buy trust by speaking at audiences through advertising. CEOs need to engage stakeholders in a very personalized way, through local media and in direct dialogue via the Internet, empowering employees while using credible third parties as spokespeople.”
The findings suggest that public relations people need to choose corporate spokespeople with great care, using independent third parties wherever possible and taking great care not to compromise the independence of those third parties—for instance, by paying supposedly independent researchers or journalists.
The good news for public relations people is that earned media continues to be more credible than paid media. Approximately nine of ten people across all markets believe information conveyed by articles or news stories more than advertising, and more than 80 percent of respondents overall do not believe information unless they see or hear it from multiple sources.
Meanwhile, the Internet appears to be gaining in credibility while traditional media are seeing their influence decline. During the last 12 months, the Internet’s popularity as a “media source to turn to first for trustworthy information or news” has risen from 12 percent to 19 percent in the U.S.; from 9 percent to 13 percent in Europe; from 10 percent to 21 percent in Brazil; and from 14 percent to 27 percent in China.
Over the same time period, trust in traditional media has declined.
In 2003, 39 percent of Americans said they turned to television first for information. by 2005 that number had declined to 35 percent. In 2003, 29 percent said they turned to newspaper first; by 2005, just 23 percent said that was the case.
In the U.S., the most credible sources of information are CNN (27 percent), Fox News (21 percent), local newspapers (20 percent), MSNBC (19 percent), and local radio and The New York Times (17 percent). In the U.K., the BBC is the most credible source of information (66 percent—the most credible news source in the western hemisphere), followed by The Times (35 percent) and BBC Radio (29 percent). Le Monde (39 percent) is the most credible news source in France, while newspapers in general (25 percent) lead the way in Germany.
There appears to be a growing disconnect between the U.S. and the rest of the developed world when it comes to trust in institutions.
For example, 44 percent of Americans say they have trust in government in general, compared to 27 percent in the U.K., 25 percent in France, 34 percent in Germany and 31 percent in Japan. Similarly, 48 percent of Americans say they trust business in general, compared to 37 percent of British respondents, 36 percent of the French, 33 percent of the Germans, and 43 percent of the Japanese. Americans are also more likely to trust the media than their counterparts in every country except Germany, and more likely to trust NGOs than citizens of any other developed nation.
Still, it’s the American enthusiasm for big business that stands out. While the 10 most credible institutions in the U.S. are all large corporations (and all but one large American corporations), three of the top five spots in Europe are taken by NGOs and the most credible corporations in Europe (IBM) is only as credible as the 10th most credible corporation in the U.S.
(Having said that, trust in media and NGOs increased in the U.S. from 2004 to 2005, while trust in business and government declined.)
Even more dramatic is the difference between how Americans view U.S. corporations and how those same companies are viewed by the rest of the world. American corporations are trusted by 79 percent of opinion leaders in the U.S., compared to just 40 percent in the U.K., 53 percent in France, 47 percent in Germany, and 58 percent in Germany.
The lack of trust also appears to be translating into a decreased likelihood of purchase. More than a third (37 percent) of U.K. consumers say they are less likely to purchase a product from a U.S. company, and the number is almost as high in France (30 percent) and Germany (31 percent).
Those who are less likely to purchase are influenced strongly by the policies of the Bush administration, with consumers in the U.K. (56 percent), France (61 percent), and Germany (49 percent) citing the administration as one reason they are less likely to purchase from U.S. corporations.
But 32 percent of Europeans cited a broader dislike of American culture as a reason for not purchasing from U.S. companies.
“The trust discount issue goes beyond the dislike of the Bush administration to a more serious question of American culture and values,” said Michael Deaver, vice chairman of Edelman. “American companies must particularly focus on building credibility in Europe and Canada, by being as local as possible in their face to the market, while engaging in continuous dialogue with local stakeholders.”
There are dramatic differences by market in the drivers of trust and in the sources that respondents turn to for credible information, including:
Corporate philanthropy, which ranked number one in the U.S. and Brazil as the corporate behavior that earned opinion leaders’ trust, was ranked last in Europe and second to last in China. In Europe and Canada, “listening to stakeholders” ranks number one; in China, “highly visible senior management” heads the list; and in Japan, “positive coverage in the local media” ranks first.
In Europe lawyers are considered credible by more than twice as many influencers than in the U.S. In most markets, the least trusted spokespersons are “entertainer/athlete” (22 percent), except in Brazil. “Union representatives” are significantly more credible in Brazil, China and Germany than in other markets.
“There is a divergence of views between the U.S., Brazil, and China versus Europe, Canada and Japan. We believe global reputations can only be built by corporations that articulate a global narrative while empowering local operations to act within local market sensitivities,” says Edelman.