2011 Edelman Trust Barometer Findings

Edelman Trust Barometer at a glance

Eleventh annual study 5,075 people in 23 countries on five continents

Ages 25 to 64
College-educated

In top 25% of household income per age group in each country

Report significant media consumption and engagement in business news and public policy

The Edelman Trust Barometer in retrospect

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Trust is now an essential line of business Business must partner with government to regain trust Young influencers have more trust in business Business more trusted than government and media A person like me emerges as credible spokesperson Trust shifts from authorities to peers U.S. companies in Europe suffer trust discount Earned media more credible than advertising Fall of the celebrity CEO Rising Influence of NGOs

1. State of Trust Shifting center of gravity

Globally, trust increases in all institutions

How much do you trust the institution to do what is right?
2010
100% 90% 80% 70% 61% 60% 50% 40% 30% 20% 10% 57% 54% 56% 52% 47% 45% 49%

2011

+4

+2 +5 +4

0%

NGOs

Business

Government

Media

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

5

Emerging markets dominate as business trusters U.S. drops to within 5 points of Russia
How much do you trust business to do what is right?
2010 2011

Trusters
100% 90% 80% 70% 62% 60% 50% 67% 70% 64% 59% 62% 61% 57%

Neutral

Distrusters

+19
81%

-8 +12
53% 40% 52%

+12
54% 48% 36% 46%

49% 44%
42% 41%

40% 30% 20% 10% 0%

Brazil

India

Italy

China

Japan

Germany

France

US

UK

Russia

Responses 6-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64; Top 10 GDP countries
6

China and Brazil drive rise in trust in government; U.S. now on par with Russia
How much do you trust government to do what is right?
2010 2011

100% 90% 80% 70% 60%

+14
88%

Trusters

Neutral

Distrusters

+46
85%

74%

-6
51% 49% 43% 36% 45% 43% 44% 38% 43% 46% 40% 38% 39%

-10
43%

50% 40% 30% 20% 10% 0% 39% 42%

33%

China

Brazil

Japan

France

Italy

India

UK

US

Russia

Germany

Responses 6-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64; Top 10 GDP countries
7

Developed markets more distrustful of media

How much do you trust media to do what is right?
2010 2011

Trusters
100% 90% 80% 80% 70% 63% 73%

Neutral

Distrusters

+17 +19 +12

58% 54% 50% 48% 36% 36% 45% 38% 45% 39% 37% 37% 37% 38% 31% 27% 22%

60%
50% 40% 30% 20% 10% 0%

- 11

-9

China

Brazil

India

Japan

France

Italy

Germany

Russia

US

UK

Responses 6-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64; Top 10 GDP countries
8

Trust in NGOs now on par with business in emerging markets More trusted than business in developed markets
How much do you trust NGOs to do what is right? How much do you trust business to do what is right?
Business NGOs

Brazil
100% 90% 81% 80% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2008 2011 2008 59% 56% 58%

China

U.S.

UK/FR/GER

61% 63% 48%

59%

63% 55% 46% 40% 56% 48% 55%

2011

2008

2011

2008

2011

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

9

Trust Barometer Index: U.S. drops while BRICs hold in composite scoring
2008 2011

Global Mexico China India US

69 62 60 53

Global Brazil China Mexico India Canada

55 80 73 69 56 55

Japan
S. Korea Canada Brazil France

50
50 48 48 44

S. Korea
Japan France

53
51 50

Germany
US UK Russia

44
42 40 40

UK
Germany Russia

43
36 36

Composite score is an average of a countries trust in business, government, NGOs, and media Responses 6-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64
10

In U.S., 2011 decline mirrors 2008-2009 drop Only country to see across-the-board fall
Trust in Institutions: 2008-2011
80%

Business

Government

Media

NGOs

70% 63% 60% 59% 63%

Worldwide Financial Crisis

45%

54%
55% 46% 46%

50% 46% 40% 43%

36%
31% 38%

40%

30% 30% 20% 27%

2008

2009

2010

2011

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

11

Trust in BRIC-based companies rises

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

+15
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Brazil HQs
100%

Russia HQs
+32
+12 70% 62% +15 -7 27%
70% 60% 100% 90% 80%

India HQs
100%

China HQs
+ 21

86%

+ 32
90% 80%

+15 +17 60%

+13

90%

80%

+ 15 +20 53% 40%

74% +33

+17

65%

70% 60%

+16

65% -6

70%

56%

60%
50%

44%

+14 33%

50% 40% 30% 20% 10% 0%

43%

50% 40%

45% -6

37% 30%

40% 30% 20% 10% 0%

28%

30%

13%

20% 10% 0%

15%

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

12

Technology firmly on top; automotive rallies. Finance sector at bottom

How much do you trust the following industries to do what is right? Trust in Industries Global Technology Automotive Telecommunications Food and beverage Biotech Retail Entertainment Pharmaceuticals Energy Consumer packaged goods OTC personal health care products Brewing and spirits Media Insurance Banks Financial services
81% 69% 68% 66% 65% 65% 63% 63% 62% 59% 57% 57% 54% 52% 51% 50%

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

13

Since financial crisis, banks cannot recoup trust in U.S., while tech stays high worldwide; in two years, auto climbs in the U.S. and China
How much do you trust the following industries to do what is right?

Technology

Banks

Automotive
2011 2009
85%

+21
100% 90% 80% 70% 60% 50% 40%

98%

2008
93% 93%

2011

+12
90%

2008
87% 83%

+7
82% 75%

2011

77%

78% 73% 69% 73%

78%

- 46
71%

80%

- 30
46%

+17
53% 49% 48%

32%
30% 20% 10% 0%

25% 16%

China

India

U.S.

U.K.

China

India

U.S.

U.K.

China

India

U.S.

U.K.

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

14

Business and Society Toward shared value

What matters for corporate reputation: Quality, transparency, trust, employee welfare most important
How important are these factors to corporate reputation?
High quality products or services Transparent and honest business practices Company I can trust Treats employees well Communicates frequently Prices fairly Good corporate citizen Innovator Widely admired leadership Financial returns to investors

69%
65%

65%
63% 55% 55% 51% 46% 39% 39%

Responses 8-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64

16

Expectations high for business to invest in society

Corporations should create shareholder value in a way that aligns with societys interests, even if that means sacrificing shareholder value Government should regulate corporations activities to ensure business behaves responsibly
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 49% 91% 89% 89% 89% 82% 82% 82% 81% 81% 80% 79% 78% 78% 74% 74% 73% 72% 73% 71% 71% 70% 69% 67% 67% 66% 63% 61% 63% 63% 62% 62% 61% 58% 57% 56% 53% 53% 50% 48% 55% 44% 42%

85% 85% 85%

Informed publics ages 25 to 64

17

Roadmap to Trust A new way forward

CEOs lead rise in trust in authority, but person like me drops amid flight to credentialed spokespeople
If you heard information about a company from one of these people, how credible would that information be? 2009
Academic/expert Financial/industry analyst Person like yourself NGO representative Regular employee CEO Government official
62%

2011
An academic or expert Technical expert within the company A financial or industry analyst
47% 70%

64%

49%

53%

CEO
41%

50%

NGO representative Government official Person like yourself Regular employee

47%

32%

43%

31%

43%

29%

34%

Responses Extremely credible and very credible; Informed publics ages 25 to 64

19

Search engines go-to source; online news second

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

First Source
Online search engine

Second Source
29%
Online news sources Print (newspapers/magazines) Online search engine

23%

Online news sources Print (newspapers/magazines) Broadcast (radio/TV)

19%

17%

15%

16%

12%

Broadcast (radio/TV)

14%

Company website

11%

Company website

11%

Friends and family

7%

Friends and family

10%

Social media

5%
0% 10% 20% 30% 40% 50%

Social media

7%
0% 10% 20% 30% 40% 50%

Informed publics ages 25 to 64

20

Repetition enhances believability

How many times in general do you need to hear something about a specific company to believe that information is likely to be true?
Dont Ten or more know, 2% Once (1), 4% times (10+), 6% Six to Nine times (6-9), 8%

Twice (2), 22%

Four or Five times (4 - 5), 26%

3-5 times 59%

Three times (3), 33%

Informed publics ages 25 to 64

21

Trust protects reputation

When a company is distrusted

When a company is trusted

negative information after hearing it 1-2 times

57% will believe

15%

will believe positive information after hearing it 1-2 times

25%

will believe positive information after hearing it 1-2 times will believe negative information after hearing it 1-2 times

51%

Informed publics ages 25 to 64

22

Conclusions

Business must align profit and purpose for social benefit Current media landscape plus increased skepticism requires multiple voices and channels Demand for authority and accountability set new expectations for corporate leadership Trust is a protective agent and leads to tangible benefits; lack of trust is barrier to change

23

The Transformation of Trust

Old Trust Framework

Control Information

New Trust Architecture

Protect the Brand

Stand Alone
WHAT

Focus Solely on Profit

Profit With Purpose

24

For more information, or to request the global or a country-specific presentation, please contact latraviette.smith@edelman.com