COMMUNICATIONS IN THE

AGE OF ENGAGEMENT: from Public Relations

to Public Engagement

Robert Phillips

President & CEO, EMEA

Edelman

Madrid, November 6, 2012

THE AGE OF ENGAGEMENT Tension Fragility Polarity Dis-trust

… and Technology

Three Macro Trends:

1. The deterioration of trust in traditional institutions

2. The dispersion of authority and the emergence of a new

pyramid of influence

3. The de-centralisation of power from traditional media to social

and hybrid sources

THE AGE OF ENGAGEMENT

DEEP

SCIENCE

DEEP

HUMANITY

COMMUNICATIONS IN

THE AGE OF ENGAGEMENT

PART ONE: Supporting Evidence

PART TWO: Codifying the New Reality

PART THREE: Engagement in Practice

PART FOUR: Discussion

PART ONE:

Supporting Evidence

2012 EDELMAN

TRUST BAROMETER METHODOLOGY OVERVIEW

Twelfth annual study

Online survey in 25 countries

30,000+ respondents

1,000 general population respondents per country

Ages 18+

Oversample of informed publics*

500 respondents in U.S. and China & 200 in

all other countries

Ages 25-64

(Trending data among Ages 35-64)

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

* This year Informed Publics were surveyed via online methodology instead of telephone

GENERAL PUBLIC

INFORMED PUBLIC 25-64

INFORMED PUBLIC 35-64

When a company

is distrusted

When a company

is trusted

15% 25%

57% believe

negative information

after hearing it

1-2 times

believe positive information after hearing it 1-2 times

believe negative information after hearing it 1-2 times

51% believe

positive information after hearing it 1-2 times

THE VITALITY OF TRUST Trust protects reputation

good news or bad: trust filters what is believed

TRUSTERS

NEUTRAL

DISTRUSTERS

GLOBAL 51

China 76

UAE 68

Singapore 67

India 65

Indonesia 63

Mexico 63

Netherlands 61

Canada 58

Italy 56

Argentina 54

Australia 53

Brazil 51

Sweden 49

U.S. 49

South Korea 44

Poland 44

U.K. 41

Ireland 41

France 40

Germany 39

Spain 37

Japan 34

Russia 32

GLOBAL 55

Brazil 80

UAE 78

Indonesia 74

China 73

Netherlands 73

Mexico 69

Singapore 67

Argentina 62

India 56

Italy 56

Canada 55

South Korea 53

Sweden 52

Japan 51

Australia 51

Spain 51

France 50

Poland 49

Germany 44

U.S. 42

U.K. 40

Russia 40

Ireland 39

2012 2011

>

>

>

<

<

<

Distrust is growing; nearly twice as many countries are now skeptics yet, emerging economies remain the top trusters

Composite score is an average of a country’s trust in all four institutions. Informed Publics ages 25-64 in 20 country global total (excludes Argentina, Hong Kong, Malaysia, Singapore and UAE) and across 23 countries

THE DETERIORATION OF TRUST

50% 52%

20%

44%

52%

40%

33%

64%

77%

43%

52%

42%

88%

39%

88%

42% 45%

75%

50% 49%

54%

62%

43%

51%

85%

43%

35%

53% 56%

43%

33%

62%

73%

38%

47%

35%

78%

26%

75%

28% 31%

61%

33% 31%

36%

40%

20%

25%

32%

62%

49%

TRUST IN GOVERNMENT

2011 Informed Public

2012 Informed Public

Trust Trust Steady

N/A N/A

Trust

Majority of countries now distrust government

THE DETERIORATION OF TRUST

CURRENT TRUST BUILDING FUTURE TRUST

1) Listens to customer needs and feedback

1) High quality products or services

3) Treats employees well

4) Places customers ahead of profits

4) Takes actions to address issue or crisis

6) Has ethical business practices

7) Has transparent and open business

8) Communicates frequently and honestly

9) Works to protect/improve environment

10) Addresses society's needs

11) Positively impacts the local community

12) Innovator of new products

13) Highly regarded, top leadership

14) Delivers consistent financial returns

15) Ranks on a global list

16) Partners with third parties

1) Delivers consistent financial returns

2) Innovator of new products

3) Ranks on a global list

47% TRUST

BUSINESS

3) Highly regarded top leadership

5) Partners with third parties

General Public

Societal

Operational

THE DETERIORATION OF TRUST Business: from license to operate to license to lead

Attributes that correlate with current trust Most important attributes that build trust

SOCIETAL ATTRIBUTES MORE IMPORTANT TO BUILDING FUTURE TRUST

CURRENT TRUST DRIVEN BY OPERATIONAL ATTRIBUTES

2012 2011 Academic or expert

Technical expert in the company

A person like yourself

Regular employee

NGO representative

Financial or industry analyst

CEO

Gov’t official or regulator 29%

38%

46%

50%

50%

65%

66%

68%

34%

43%

43%

47%

50%

53%

64%

70% Academic or expert

Technical expert in the company

A person like yourself

Regular employee

NGO representative

Financial or industry analyst

CEO

Gov’t official or regulator -12

-14

+22

+16

Credibility of CEOs and government officials plummet Peers and regular employees see dramatic rise

THE DISPERSION OF AUTHORITY

Greatest increase

since 2004

Biggest decline in Barometer

history

THE REALITY OF

THE NEW MEDIA LANDSCAPE

OWNED PROPERTIES

WEBSITES INTRANETS

PORTALS CORPORATE

BLOGS APPS & MOBILE

SOCIAL

HYBRID MEDIA NICHE

PUBLICATIONSSITES & PROFESSIONAL BLOGS

OUTPOSTS MESSAGE BOARDS

FORUMS BLOGOSPHERE

TRADITIONAL MEDIA

MAINSTREAM OUTLETS TRADES

PART TWO:

The Age of Engagement Codifying the New Reality

2010 2011 2009 2012

CHANGE WILL NEVER BE THIS SLOW AGAIN

MEDIA:

INDIVIDUALS:

BRANDS:

ORGANISATIONS:

MARKETS:

LEADERSHIP:

from AUDIENCE to COMMUNITY

from CONSUMER to CO-CREATOR

from PUSH to PULL

from HEIRARCHIES to NETWORKS

from PRODUCTS to PLATFORMS

from CONTROL to EMPOWER

BONCHEK’S SIX SHIFTS

social digital

COMMUNICATIONS AND THE EVOLUTION OF INFLUENCE

Social Advocists

Employees

Citizen Consumers

authority empathy

analogue

Elite

Mass

yesterday today

my clover

my influence network

Elites

Mass

PLA

TFO

RM

S / A

GG

RE

GA

TION

SITE

S

CO

MM

UN

ITIE

S

PUBLIC ENGAGEMENT:

THE EVOLUTION OF PUBLIC RELATIONS

WHY PE?

PE is how Edelman sees the world of communications. It’s the operating framework within which we work. It provides strategic guidance and defines measurable outcomes. It is our belief that communications now has to expand to fit the mantra of Public Engagement – we have to be able to understand and advise on business strategy as well as business communications.

WHY NOW?

The world is increasingly complex. Authority and consumer power continue to disperse. Business needs to behave and communicate differently. And change will never be this slow again. PE helps Edelman play in an evolving and competitive landscape of digital networks, media agencies, ad agencies, CRM, research firms and management consultancies.

HOW DO WE TALK ABOUT PE? Communications today is as much about what we do as what we say. It advances the shared interests of business and society in a finite, fast-fail world. It needs to be open, honest and frequent.

at heart, PE is: bottom-up; social; transparent; values-led; rooted in action

PE ultimately gives businesses the License to Lead

ENGAGEMENT MUST BE MEASURED IN OUTCOMES:

Increased Trust

Deeper Communities

Behaviour Change

Commercial Success

to regular people

in the always-on conversation

and co-create likeable, shareable content

narratives to navigate the media clover

genuine transparency

that good business needs profit + purpose + engagement

that everyone can be an activist now

SEVEN BEHAVIORS UNDERSTAND

LISTEN

PARTICIPATE

CREATE

BUILD

PRACTICE

RECOGNIZE

The dispersion of authority away from traditional power structures will only increase in speed - and a new era of accountability to regular people is the inevitable result

citizens rising

SEVEN TRENDS

Mathematics (and the algorithms that drive search and social) are shaping the networked world in which we live - but it is real people who provide the content and shape the stories. Empathy and humanity are key

human connectivity

Smart companies and brands of the future recognise that pushing out messages will get them nowhere; creating ‘gravitational orbits’ that allow clusters of shared interests to form and ‘pull’ audiences represents the engagement of the future

brand orbits & the death of push

We still have no idea what technological possibilities lie ahead and change is never going to be this slow again

unseen possibilities

The future is mobile and the next generation will be empowered like never before

the mobile tipping point

Demography not democracy may now be society’s greatest challenge – and while human resources are infinite, planetary (and financial) resources are not. Shared interest models will help business play a leading role in developing solutions

shared interests; finite capital

Businesses will move from compliance culture to leadership based on values. A new social contract emerges that recalibrates the relationship between government, business and civic society

from license to operate to the licence to lead

PART THREE:

Engagement in Practice

CAN ENGAGEMENT HELP BUSINESS

BECOME A FORCE FOR SOCIETAL GOOD?

The example of WalMart says yes

CAN ENGAGEMENT HELP SHIFT BUSINESS

FROM ITS TRADITIONAL LICENSE TO

OPERATE TO A NEW LICENCE TO LEAD?

The example of Mars in China says yes

CAN ENGAGEMENT – LISTENING TO REGULAR

PEOPLE & CO-CREATING WITH THEM – HELP

DESIGN AND DEVELOP BETTER PRODUCTS?

The example of Adobe says yes

CAN ENGAGEMENT LEAD TO GREATER ‘WISDOM

FROM WITHIN’ – BOOSTING MORALE,

IMPROVING PRODUCTIVITY & STRENGTHENING

WORKFORCE LOYALTY?

The example of Starbucks says yes

CAN ENGAGEMENT HELP BUSINESSES IDENTIFY

CHALLENGES ON WHICH THEY CAN LEAD…

ULTIMATELY RE-EARNING THE TRUST OF CITIZENS &

STRENGTHENING ITS RELATIONSHIP WITH SOCIETY?

The example of GE says yes

CAN ENGAGEMENT HARNESS THE POWER OF

EMPLOYEE ACTIVISM TO DRIVE SUSTAINABLE,

SOCIETAL CHANGE?

Increasingly, the evidence of the Unilever

Sustainable Living Plan says yes

PART FOUR:

Discussion

Robert Phillips

President & CEO, EMEA

Edelman

robert.phillips@edelman.com

@citizenrobert