PRSA Nashville

January 19, 2009

2009 Edelman Trust Barometer

Edelman Trust Barometer at a glance

Tenth edition

4,475 people in 20 countries on 5 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

A decade of insights from the Edelman Trust Barometer

3

Rising Influence of NGOs2001

Fall of the celebrity CEO2002

Earned media more credible than advertising2003

U.S. companies in Europe suffer trust discount2004

Trust shifts from “authorities” to peers2005

“A person like me” is most credible spokesperson2006

Business more trusted than government and media2007

Young influencers have more trust in business2008

College Athletic Departments

Univ. of Alabama

Univ. of Florida

Vanderbilt Univ.

Univ. of Tennessee

Athletic Directors

Football Coaches

Women's Basketball Coach

What a difference a year-and-a-half makes

January 19, 2009May 14, 2007

2008: A year unlike any other

Dow Jones Industrial Average: Jan 1, 2008 – Dec 15, 2008

51%

58%

41%

75%

49%

74%

47%49%

35%

30%

45% 45%

61%

43% 42%

55%

61%

39%

54%

49%

38%

27%

65%

40%

65%

41%45%

33%29%

45%47%

63%

45% 45%

62%

69%

51%

71%

39%

68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%2008 2009

Trust in business is country-specific

7

% who trust business to do what is right

A10. [Business in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what is right. Please use a nine-

point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL". (Top 4 Box) Informed publics 35-64 (global 18 countries,

excluding Australia, Indonesia)

Trust Down Trust Steady Trust UpNew

additions

in 2009

62%

83%79%

77%74% 73%

69%67% 67% 67% 66%

62% 61%

56% 55% 54%50% 49% 49%

32%

21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%% who trust companies less

Companies less trusted now than year ago

8

A60 Thinking about everything you have read, seen, or heard about business in the last year, in general, do you trust corporations a lot less, a little less, the same, a little more, or a lot more

than you did at the same time last year? (Bottom 2 Box: Trust less) 25-64 Informed publics in 20 countries

Business still more trusted than government in 13 of 20 countries

A 8,10. [Government in general, business in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what is

right. Please use a nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics 35-

64 (global 20 countries, including Australia, Indonesia)

9

50%

65% 65% 63%

69% 68%

47%

51%

38%

45%

40% 41%

45% 45%

33%

27%

45%

29%

71%

62%

39%

45%41%

43% 45%

51% 52%

33%

39%

30%

38%34% 35%

41%43%

35%32%

51%

36%

80%

74%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Business in general Government in general

Business more trusted Government more trusted

Technology remains most trusted industry sector globally

10

45%

46%

56%

53%

56%

59%

57%

55%

62%

61%

65%

77%

40%

42%

45%

50%

53%

55%

55%

55%

55%

57%

57%

66%

76%

Insurance

Media companies

Banks

Entertainment

Pharmaceuticals

Food

Retail

Energy

CPG manufacturers

Automotive

Health care industry

Biotech/life sciences

Technology

2009 2008

A25-37. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses

in each of the following industries to do what is right. Again, please use a nine-point scale where one means that you "DO NOT TRUST

THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL.” (Top 4 Box) Informed publics 35-64 in 18 countries 2008-2009

N/A

In emerging economies, industries that suffer in West remain trusted

A25-37. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of the following industries to do what is right. Again, please use a

nine-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL." (Top 4 Box) Informed publics 35-64

11

72% 72% 72%

55%

80%83% 84%

67%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Automotive Energy Banks Media companies

2008 2009

China

52%

59%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Banks

2008 2009

Brazil

79%

72%

83%

55%

81%

71%

81%

65%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Automotive Energy Banks Media companies

2008 2009

India

Four Global Issues:

Who Is Responsible for Causing and Solving?

Global

Warming

Energy

Costs

Access to

Affordable

Healthcare

Financial

Credit Crisis

Government and business share responsibility for causing global issues

13

.

80% 81%77%

80%79%

84%81%

63%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Energy Costs Financial Credit Crisis Global Warming Affordable Healthcare

Government and regulators Businesses

E. 119-120, E124-125, 129-130, 134-135. Now thinking about (energy costs, financial credit crisis, global

warming, affordable healthcare), please tell me how responsible you think each of the following entities are for

contributing to (global issue)? TOP 4 BOX 25-64 informed publics in 20 countries

Trust wanes for traditional information sources

Ranking stays consistent

C95-98,103. [TRACKING] Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a

source of information about the company—is it extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box), Informed publics ages 35-64 in 18 countries

56% 57%

49% 49% 49%47%47%

44%40%

38%36%

34%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Stock or industry analyst reports

Articles in business

magazines

Conversations with your friends

and peers

News coverage on the radio

Television news coverage

Articles in newspapers

2008 2009

14

38%

20%

27%

15%

Free content sources, such as wikipedia or

webportals*

Social networking sites (such as MySpace or

Facebook)

2008 2009

Trust in digital channels down but still important

Internet search engines most trusted

C95-110. [TRACKING] Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a source

of information about the company—is it extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box), Informed publics ages 35-64 in 18 countries

15

35%

19%16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Internet search engines e.g.

Google news, Yahoo news

Business Blogs Personal or Non Business Blogs

or bulletin boards

2009

*asked as “Free content encyclopedia

(such as Wikipedia)” in 2008

38%

31%

20%

26%24%

13%

Corporate communications such

as press releases, reports and emails

A company’s own website

Corporate or product advertising

2008 2009

Trust in corporate channels also down

Employees most trusted source

C99-101,109,110. [TRACKING] Now I’m going to read you a list of places where you might get information about a company. Please tell me how credible you believe each one of them is as a

source of information about the company—is it extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box), Informed publics ages 35-64 in 18 countries

16

40%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Conversations with company

employees

Live communication such as a CEO

speech

2009

CEO credibility hits new low globally

Driven by drops in North America and Europe

D112-118. [TRACKING] Now I’m going to read you a list of people. In general, when forming an opinion of a company, if you heard information about a company from that person, how

credible would the information be--extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box) Informed Publics 35-64 in 18 countries

36%

46%

61%

29%31%

37%

21%

29%27%

23%25%

22%

29%

20%

43%

15%19%

29%

13%

21% 20%17%

19% 19%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%2008 2009

17

CEO credibility at

6-year low in US

Trust in nearly every spokesperson down

Academics, industry experts most credible

D112-118. [TRACKING] Now I’m going to read you a list of people. In general, when forming an opinion of a company, if you heard information about a company from that person, how

credible would the information be—extremely credible, very credible, somewhat credible, or not credible at all? (Top 2 Box) Informed publics 35-64 in 18 countries

18

56% 57% 58%

49%

39%36%

32%

59%

47% 47%

38%

30% 29%27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

An academic or expert on that

company's industry or issues*

Financial or industry analyst

A person like yourself

Non-profit organization or

NGO representative

Regular employee of a company

CEO of company Government official or regulator

2008 2009

*asked as “an

academic” in 2008

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

20

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

21

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?

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

22

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%

US UK France Germany India China

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

23

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

24

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%

US UK France Germany India China

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

25

-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

26

80% 81%

72%

62%

93%

88%

72% 71%69%

56%

86%84%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

US UK France Germany India China

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?

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

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

28

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

29

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

31

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

32

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

33

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

34

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

36

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

37

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

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?

What We Have Learned

Diminished

trust impedes

business license

to operate

______

Regulation ≠

abdication

______

A public

company serves

shareholders

and society

______

Partnership is

the solution

______

Public Engagement: A Strategy for Changing

Policy and Communication

Shared

Sacrifice

Continuous

Conversation

Private Sector

Diplomacy

Mutual Social

Responsibility

Private Sector Diplomacy

Shape policy on world’s most pressing

problems, including ones that don’t concern

company’s industry

Partner with government, NGOs to drive

decision-making and set strategy on major

societal issues

― …Come together—government, NGOs and

business—in new approach to solving big

problems facing our country. … This can work.‖

– H. Lee Scott, Jr.,

President and CEO, Wal-Mart

Shared SacrificeContinuous

Conversation

Private Sector

Diplomacy

Mutual Social

Responsibility

Mutual Social Responsibility

Benefit society and the bottom line

Integrate approaches to societal

problems into products and services

Involve employees and customers in

decisions and actions about company’s

social responsibility

Starbucks invites customers to

partner as a force for good

Shared SacrificeContinuous

Conversation

Private Sector

Diplomacy

Mutual Social

Responsibility

Shared Sacrifice

Set collaborative tone for company:

we’re all in this together

Equitable compensation (executive pay cuts, bonus

forfeiting) sends powerful message

Communicate with employees, welcome their voices

Shared SacrificeContinuous

Conversation

Private Sector

Diplomacy

Mutual Social

Responsibility

―Heavy equipment maker Caterpillar

Inc announced in late December it

would cut executive pay in half, and

many salaried employees would see

cuts of as much as 15 percent.‖

– Wall Street Journal

Continuous Conversation

Be agile and “of the moment”

Inform, don’t control the

conversation

Say... then do as you say

Johnson & Johnson among first

companies to join public

conversation on health

Shared SacrificeContinuous

Conversation

Private Sector

Diplomacy

Mutual Social

Responsibility

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