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Global Trust Landscape Shifts Significantly in 2002

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Global Trust Landscape Shifts Significantly in 2002

Published 01-22-03

Submitted by Edelman

DAVOS, SWITZERLAND - Trust in U.S. business has risen in the past six months despite the recent wave of corporate scandals, while European confidence in business has declined, according to Edelman’s fourth semi-annual Trust Survey of opinion leaders. Forty-eight percent* of U.S. opinion leaders expressed trust in business, an increase from the 41% recorded in the June 2002 survey. Europeans' trust in business declined from 43% in June 2002 to 35% today.

Trust in the U.S. government fell dramatically from a post-9/11 high of 48% in January 2002 to 39% today, while trust in government in Europe remained quite low at 25%, down from a peak of 36% in June 2001. NGOs are now the most trusted institution in Europe -- increasing from 42% to 45% -- and in the U.S. they are at parity with business, increasing from 38% to 49% in the past six months.

"On the eve of the World Economic Forum's conference on trust, we're seeing opinions from the U.S. and Europe diverging significantly," said Richard Edelman, President and CEO, Edelman. "Trust in U.S. business is improving because corporations have been taking steps to restore confidence, and there is new legislation like Sarbanes-Oxley, while trust in government in the U.S. is eroding to pre-9/11 levels. At the same time, there is a trust void in Europe, as confidence in business ebbs and trust in government remains low."

"NGOs are now firmly established as the Fifth Estate** in global governance, rivaling the credibility of revered corporate brands and filling a trust vacuum in both the U.S. and Europe."

"Positive attitude towards business are not universal but rather varies sector-by-sector, with residual concerns about the industries that are in the forefront of recent scandals," commented Richard C. Breeden, Chairman of Corporate Governance Advisors at Edelman and the former Chairman of the U.S. Securities and Exchange Commission. In the U.S., consumer package goods, durables and technology scored more than 65% on trust, while scandals and criminal investigations have contributed to making energy, telecommunications, and professional services the least trusted industries, all of which scored less than 38%. In Europe, consumer durables, healthcare and airlines are the most trusted, registering 54%, while investment/insurance and retail financial services are the least trusted, scoring less than 40%.

Other findings from the new study include:

  • 71% of opinion leaders in the U.S. and 57% in Europe trust the company they work for, while only 31% in the U.S. and 28% in Europe trust global corporations.

  • In Europe, the four most trusted brands are NGOs (Amnesty, World Wildlife Fund, Greenpeace, and Oxfam). Although their trust levels declined slightly, they continue to be rated higher than the top-rated corporations (Microsoft and Bayer) by a margin of more than 10%.

  • In the U.S., the gap between the most trusted brands-Johnson & Johnson, Coca-Cola, Microsoft, Ford, McDonalds, Bayer, and Pfizer (greater than 50%)-and the top NGOs is closing (with top NGOs now scoring between 40 and 50%).

  • Trust in certain American brands, such as McDonalds (55% in the U.S.) and Coca-Cola (66% in the U.S.) is significantly lower in Europe, where McDonalds is at 22% and Coca-Cola is at 37%.

    Communications and Trust

    The study provides insights into the communications channels and spokespeople through which business can establish trust and credibility. More than 80% in Europe and in the U.S. stated that they believe information conveyed through news articles, while only 12% in the U.S. and 9% in Europe believe the information from advertisements.

    In both the U.S. and Europe, more than 35% stated that "experts" and those who are seen as having no vested interest in the welfare of the company-academics, doctors and representatives of NGOs-are among the most trusted spokespersons. Fewer than two in every 10 people said that paid representatives, such as company spokespeople or entertainers/athletes, are credible sources of information.

    "This study underscores the importance and influence of media coverage," said Geoffrey Cowan, Dean of the Annenberg School for Communication at the University of Southern California. "The news media carries a high degree of credibility with opinion leaders, who are eight times more likely to believe information they receive from the news media than from advertising."

  • More than 44% stated that articles in business magazines and newsweeklies are the most credible sources of information, both of which topped the list across the U.S. and Europe. Corporate advertising and product or service advertising were rated the least credible source of information (5% in the U.S.).

  • In the U.S. and Europe, information derived from independent parties, including colleagues (38%+), friends and family (35%+), and analysts' reports (26%+) are perceived to be far more credible sources than information from corporate advertising (5%) and Web sites (13%).

  • 87% in the U.S. and 77% in Europe agree that they usually don't believe something the first time they read or hear it, and are more likely to believe something they obtain from multiple sources.

    "This is the first study to clearly demonstrate that you can't buy credibility through paid media, you have to be credible through actions and transparent, open communications, conveyed through media by independent advocates." said Steve Lombardo, CEO, StrategyOne."

    About Edelman

    The world's largest independent public relations firm, Edelman provides a full spectrum of advanced communications services through its PR firm and specialty firms: Blue (advertising), First&42 (management consultancy),StrategyOne (research) and BioScience Communications (medical education and publishing). Edelman, which celebrated its 50th anniversary in 2002, has 1,900 professionals in 40 offices throughout North America, Europe, Latin America and Asia Pacific. Visit www.edelman.com for more information.

    About the Edelman Survey of Trust

    The fourth semi-annual survey was conducted through telephone interviews with 400 U.S. and 450 European (across the U.K., France and Germany) opinion leaders between December 14 and January 10 by StrategyOne. Opinion leaders are defined as being between 35-64 years, college educated with a household income of more than $75,000 in the U.S. and the equivalent in Europe. Opinion leaders are business and media attentive. The interviews were conducted via telephone and averaged 25 minutes in duration. The survey is bi-annual and the first to contrast U.S. and European perceptions.

    • Edelman

    Edelman

    For more than 50 years Edelman has built a reputation known for breakthrough strategy and programming that delivers valuable results to our clients. Our professionals across our global network strive to bring the highest level of personal and professional integrity to the execution of their job, every day. As a global organization it is all the more important that we be unified in all facets of how Edelman does business. Our expertise and role in the formation and dissemination of messages to all stakeholders is of value across the spectrum of traditional media as well as increasingly called upon by numerous new media options. Maintaining high standards of conduct is not achieved solely by good intentions. It is achieved by clarity in knowing the firm's Missions and Values. In turn this understanding leads to Edelman's Principles and its Code of Conduct.

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