Annual Edelman Trust Barometer 2006

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A SPECIAL SUPPLEMENT TO PRWEEK 2006 Annual Edelman Trust Barometer “ “Person like yourself or your peer” is seen as the most credible spokesperson about a company and among the top three spokespeople in every country surveyed.” Disclosure At the time the Trust Barometer was compiled, Edelman had a client relationship with the following companies mentioned in this brochure: Heinz; Johnson & Johnson; Kraft; Microsoft; Nissan; Samsung; Starbucks; Unilever; UPS Cover photos (l-r, beginning on
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  2006 AnnualEdelman TrustBarometer A SPECIALSUPPLEMENTTOPRWEEK  “ “Person like yourself or your peer” is seen as themost credible spokesperson about a companyand among the top three spokespeople in everycountry surveyed.” Disclosure At the time the Trust Barometer was compiled,Edelman had a client relationship with the following companies mentioned in this brochure:Heinz; Johnson & Johnson; Kraft; Microsoft; Nissan; Samsung; Starbucks; Unilever; UPSCover photos (l-r,beginning on back cover): former FEMA director Mike Brown; Morgan Stanley; baseball stars Mark McGwire and Rafael Palmeiro;Bank of Italy; Save The Children; former Enron CEO Ken Lay; Dove “Real Beauty”campaign  It’s long past time to abandon the old adage that “love makes the world go ‘round.”Today,if anythingkeeps the world turning,it’s trust.Without trust,there’s no bene-fit of the doubt given,everyone becomes a hapless fact-checker,and nothing gets done,no governmental decisions made,and lit-tle gets bought or sold in the marketplace.The Edelman TrustBarometer shows that this year – and over the last six years –some revolutionary changes are unfolding.First,trust in established institutions like government and themedia remains shaky.How these institutions have responded toevents such as Hurricane Katrina,urban riots in France,and thelatest news reporting fiascoes hasn’t helped.All this jibes withother surveys,as well as anecdotal material,that suggests peopleincreasingly find government and the media to be self-serving andeven untrustworthy.Interestingly,business,after a very bad start tothis century,has recovered somewhat from the rash of scandals.However,the biggest change among major institutions has been the rise of trustin NGOs,which are becoming the most-trusted institution.As people seek newinstitutions and individuals in which to place their trust,they turn to NGOs,eventhough many have powerful interests in the arenas in which they operate.Green-peace,for example,gets high trust marks for information on the environment.The Edelman Trust Barometer has tracked the steady decline of trust in tradi-tional figures of authority,and the increase in the credibility of the “average per-son.”This year we reached a possible tipping point,with trust in “a person likeme”surpassing even academics and doctors in most countries.This is underscoredby the growth and increasing credibility of internet communications,which pro-vides much greater access to peer opinions.Other Edelman surveys show thatbloggers and websites have established themselves,notwithstanding their oftenintemperate tone and frequent biases.Conversely,the “mainstream media”face declining readership,viewers,andad revenues.This is part of an in-with-the-new,out-with-the-old phenomenon,and the pattern has been pretty consistent over the six years of Edelman TrustBarometer surveys.Keep in mind,however,that our respondents are opinionleaders who are well-paid,highly educated,and have almost universal access tobroadband.They are presently better equipped to check multiple sources thanaverage citizens – although the gap is narrowing.Finally,one other point that jumps out is the ever-weightier impact of trust onbusiness and consumer decisions.Our study found that if respondents lose trustinacompany,they are highly likely (70% to 80%) not to purchase its products orservices.Worse,people do not simply internalize their doubts;they talk to othersand spread distrust – with up to 33% now using the web to post their views.To besure,if investors see a good deal,they’ll invest;if buyers like a product,they’ll buyit.But when concerns appear,consumers and investors can change their patternsquickly.This report explores the influence of industry,country of srcin,and other fac-tors that drive trust in global companies.It provides the beginning of a road mapto build trust across every key market.Happy motoring... Trust makes the world go round Leslie H. Gelb Counselor to Edelman and president emeritus of theCouncil on Foreign Relations 2006 Annual Trust Barometer 1 Inside 2The Me 2 Revolution Richard Edelman discusses anevolving approach to communications 4The state of trust  Aconversation with Michael Deaver  7Why trust is important Theconsequences of lost trust  8The trust house Certain attributes build trust for topcorporations all over the world 12Trust acrossborders The challenge facing national brandsexpanding across borders 14Trust by sector Trust in a company often correspondsto how its sector is perceived 16Building trust The steps organizations must taketo build trust  19Power to the people The company’s best spokesperson haschanged.An interview with Pam Talbot  23United States Trust is built through a dialoguewith multiple stakeholders 24Europe The region stays true to its reputationas “the skeptical continent” 25Asia Three countries that share a region,but not the same standards of trust  27Brazil The South American nation isamong the world’s most trusting 27Canada When it comes to global business,the Maple Leaf is a trusted symbol  28Powering relationships Trust is the backbone of stakeholder engagement  This supplement was commissioned byEdelmanand produced by Haymarket Media,Inc.  The traditional approach tocorpo- rate communications envisages a controlled processof scripted messages delivered by the chief executive,first to investors,then to other opinion-formers,andonly later to the mass audiences of employees andconsumers.In the past five years,this pyramid-of-influence model has been gradually supplanted by apeer-to-peer,horizontal discussion among multiplestakeholders.The employee is the new crediblesource for information about a company,givinginsight from the front lines.The consumer has be-come a co-creator,demanding transparency on deci-sions from sourcing to new-product positioning.Smart companies must reinvent their communica-tions thinking,moving away from a sole reliance ontop-down messages delivered through mass adver-tising.This is the Me 2 Revolution.What is nowrequired is a combination of outreach to traditionalelites,including investors,regulators,and academics,plus the new elites,such as involved consumers,empowered employees,and non-governmentalorganizations.The most profound finding of the 2006 EdelmanTrust Barometer is that in six of the 11 countries sur-veyed,the “person like yourself or your peer”is seenas the most credible spokesperson about a companyand among the top three spokespeople in every coun-try surveyed.This has advanced steadily over the pastthree years.In the US,for example,the “person like yourself or your peer”was only trusted by 22% of respondentsas recently as 2003,while in this year’sstudy,68%ofrespondents said they trusted a peer.Contrastthat to the CEO,who ranks in the bottom half of cred-ible sources in all countries,at 28% trust in the US,near the level of lawyers and legislators.In China,the“person like yourself or your peer”is trusted by54% of respondents,compared to the next highestspokesperson,a doctor,at 43%.Meanwhile,“friends and family”and “colleagues”rank as two of the three most credible sources forinformation about a company,just behind articles inbusiness magazines.Again,in the US,the “col-leagues”number has jumped from 38% in 2003 to56% in 2006.We facilitated the revolt by employeesof Morgan Stanley against top management,solicit-ing opinions through their futureofms.com website,which then led to stories in traditional media.Why the change,with increased reliance on thoseyou know? The Edelman Trust Barometer shows The Me 2 Revolution “ Smartcompanies must reinvent communicationsthinking, moving away from a reliance on top-down messages delivered through mass advertising.” 2006 Annual Trust Barometer 2
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