2009 MidYear Trust Barometer

August 3, 2009

2009 Special Midyear Trust Survey

Overview

• Conducted a special abridged version of the annual Edelman Trust

Barometer. We surveyed 1,675 opinion leaders in six of the world’s largest

markets: China, France, Germany, India, UK and US.

• To gauge impact of last six months – the bankruptcies, bailouts,

nationalizations, and exec comp scrutiny-- on trust in business and brands:

• Has business regained its footing?

• Who are opinion leaders looking to for leadership to solve key societal issues–

business or government?

• What are the new expectations for business and its role in society?

• How do companies restore lost trust?

• How does trust – or the lack of it – affect product brand decisions?

•

January 2009

In U.S., trust in business was at lowest level, including post-Enron

3

How much do you trust business to do what is right?

44% 44%

48%

51%

48%49%

53%

58%

38%

32%

41%

35%

40%

36%

38%

34%

36%36%

30%

35%

40%

45%

50%

55%

60%

2001 2002 2003 2004 2005 2006 2007 2008 2009

US UK/France/Germany

Informed publics 35-64 in the United States and UK/France/Germany

Responses 6-9 only on 1-9 scale; 9=highest

Enron, the dot-com bust

and September 11

20-point

drop

July 2009

Trust in business stable to up

How much do you trust business to do what is right?

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

4

36%

46%

30%34%

71%

62%

48%44%

41% 39%

75%

60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

US UK France Germany India China

Jan 09 Jul 09

+12

+11

The 12-point increase in U.S. includes the younger sample of 25- to 34- year-olds,

whose overall trust in business increased 26 points in six months.

Trust in government stable to up

How much do you trust government to do what is right?


5

43%

35%38%

26%

44%

74%

30%

40%

34% 36%

42%

72%

42%38% 40%

44%

55%

78%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Jan 08 Jan 09 Jul 09

+13

+12

The 12-point increase in U.S. includes the younger sample of 25- to 34- year-olds,

whose overall trust in government increased 24 points in six months.

Why? Tangible, quantifiable actions

6

58%

61%

62%

78%

80%

81%

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

Continued to spend money on philanthropy

Reduced marketing budgets

Closed non-profitable business units

Fired non-performing management teams

Reduced CEO and executive pay

Repaid bailout or loan money to the government

Would you trust a company more or less if that company took this action?

Informed publics ages 25 to 64

Responses 6-9 only on 1-9 scale; 9=highest

July 2009

The state of trust in six countries

7

51% 51%

70%

46%

52% 50%48%44%

41% 39%

75%

60%

42%38% 40%

44%

55%

78%

37%

28%

35%39%

53%

67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


NGOs Business Government Media

How much do you trust each institution to do what is right?

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

January 2009

In U.S., trust in every industry had declined; banks and automotive led the way

How much you trust businesses in each of the following industries to do what is right?

69%

60%

44%

49% 50%

58%

64%

54% 54%

73%

63%

80%

36%33%

25%

31%33%

42%

49%

40%42%

62%

54%

73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009

8

-33

-27

Informed publics ages 35 to 64; responses 6-9 only on 1-9 scale; 9=highest

Technology most trusted industry in five of the six countries

9

80% 81%

72%

62%

93%

88%

72% 71%69%

56%

86%84%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Technology Food Healthcare Biotech/life sciences Retail Banks

Technology

#3 in France

(66%)

How much do you trust businesses in each of the following industries to do what is right?


But We’re Still

in the Middle of the Game

1% 1%

24%

10%

34% 34%

10%17%

29%

37%

22%28%

17%

12%

18%24%

19%

24%

59%59%

25% 24%23%

12%12% 10%

5% 5% 2% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

India China US Germany France UK

Excellent

Good

Neither good nor bad

Fair

Poor

Reputation of MNCs struggling in West

11

Informed publics ages 25-64 in six countries; Responses Excellent, Good, Neither good nor bad, Fair, and Poor

How would you describe the overall reputation of large global businesses?

13%24%29%30%69%71%

Reputation

rated good

or excellent

20%

9%

40%

33%

38%

55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Has government

intervened enough in

global business?

Business is not doing enough to help solve economic crisis

12

Have global businesses

cooperated enough with

government?

Informed publics ages 25-64 in six countries; responses Too much, The right amount and Not enough

Too much Too much

Right

amount

Right

amount Not enoughNot enough

“The social

responsibility

of business is

to increase its profits.”

Milton Friedman, 1970

Stakeholder, not shareholder, world

14

70%

58%

49%45%

40%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Customers Employees Investors Society Local Communites*

Government

How important do you believe the interests of each of the following stakeholders

should be to a CEO’s business decisions?

* Communities where the business operates

Informed publics ages 25-64 in six countries

Extremely important responses only

“Hard and soft” measures needed to rebuild trust

15

Informed publics ages 25-64 in six countries

Responses 6-9 only on 1-9 scale; 9 = highest

43%

66%

69%

69%

70%

70%

75%

78%

81%

82%

82%

82%

89%

90%

91%

93%

93%

94%

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

Protect profit margins

Increase shareholder value

CEO appearances

Discount pricing

Eliminate financial incentives for taking risks

Communicate messages through multiple media channels

Pay senior executives mostly in stock

Reduce the gap between CEO and average workers pay

Commit resources to the public good

Increase profitability and performance

Partner with third parties to solve major global problems

Make progress on environmental initiatives

Drive better innovation

Create and keep jobs

Communicate frequently and honestly

Transparent and honest business practices

Keep producing quality products and services

Treat employees well

Would trust a company more or less for taking each of the following actions?

Business expected to take on global issues

16

85% 84% 82% 80%76% 75% 73%

Manage business operations to ensure companies survive

global economic crisis

Ensure efficiency of business operations

Create solutions to reduce energy costs

Cooperate with government to help

solve the global economic crisis

Provide access to affordable healthcare

Create solutions to minimize global

warming

Promote free trade

How important do you believe it is for business to do each of these things?

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

But MNCs have not taken enough action

17

71% 70%

64%

55%52%

49%

Create solutions to minimize global

warming

Create solutions to reduce energy costs

Provide access to affordable healthcare

Cooperate with government to help

solve the global economic crisis

Manage their business operations to ensure that their companies

survive the global economic crisis

Ensure efficiency of business operations

In U.S.: 62%

Informed publics ages 25 to 64; not enough responses only

Have global businesses taken too much, the right amount, or not enough action on each of these things?

In U.S.: 55%

In U.S.: 65%

In U.S.: 68%

In U.S.: 56%In U.S.: 57%

“NOT ENOUGH”

The Role of Trust

in Product Marketing

Informed publics more likely to switch brands because of

something positive they read, saw, or heard about that brand

19

Informed publics ages 25 to 64 in six countries

Yes responses only

29%

33%

45%

48%

53%

62%

Connected with a brand through a social networking site

Lost trust in a brand because of poor financial performance of the parent company

Switched brands because you stopped trusting a brand

Switched brands because of something negative you read, saw or heard about that brand

Switched brands because another brand cost less

Switched brands because of something positive you read, saw or heard about that brand

In recession,

cost only

marginally

more

important

than trust

Have you taken any of the following actions in relation to product or service brands that you use?

Quality, reliability, and past personal experiences most important factors in determining how

much one trusts a product or service brand

20


22%

39%

42%

57%

59%

67%

68%

75%

79%

81%

83%

88%

90%

94%

94%

96%

Endorsement by a celebrity

Endorsement by a public figure

Advertisements

Positive media coverage

Financial performance

Recommendation from an expert

Association with a good cause

Recommendation from a person like you

Recommendation from friends or family

Innovation

Company reputation

Value

Safety

Past personal experiences

Reliability

Quality

How important are each of the following factors in determining how much you trust a product or service brand?

Study conclusions

• Trust has either stabilized or risen, but we’re only in the middle

of the game

• Tangible, quantifiable corporate actions have led to trust rise – repaying

loans, cutting executive comp, firing poor management

• Moving from shareholder to stakeholder world

• “Hard and soft” measures rebuild trust – quality products, treating

employees well, transparency, frequent communication

• Business expected to partner with government and NGOs to address

economy, energy, environment, healthcare

• Trust plays key role in brand choices

The way forward for business

• No quick fix through a single set of actions: long-term proposition

• Play a broader role in society; collaborate more

• Balance investor interests with customer and employee interests

• Square mutual social responsibility and shared purpose with

profit-making strategy

• Communicate frequently and transparently

A Ten Year Overview of Trust

The 2009 Midyear Edelman Trust Survey was produced by research firm StrategyOne.

Methodology: The survey consisted of 15-minute telephone interviews from May 26 to July 3, 2009.

The survey sampled 1,675 informed publics in two age groups (25-34 and 35-64) in six countries:

U.S., U.K., France, Germany, China, and India. The respondents were college-educated, in the top

25% of household income per age group in each country, and reported significant media

consumption and engagement in business news and public policy.

U.S.: N= 500 (ages 25-34: n=100; ages 35-64 n=400)

China: N=375 (ages 25-34: n=75; ages 35-64 n=300)

U.K., France, Germany, India (per country): N=200 (ages 25-34: n=50; ages 35-64 n=150)

For more information on the Edelman Trust Barometer and to view past results, please visit

www.edelman.com/trust.

.

August 3, 2009

2009 Special Midyear Trust Survey

2009 MidYear Trust Barometer

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Transcript of 2009 MidYear Trust Barometer