U.S. Brands on the Run.

Does the rising tide of anti-Americanism hurt American multinationals? The vocal antiwar protesters would like to think so, but there hasn't been much evidence for a broader consumer turnoff, until now. In an annual survey conducted since 1998, RoperASW has been looking for a connection between the dwindling reputation of America and the worldwide appeal of its top brands, from Disney to Microsoft. It had found no such link until this year, when a survey of 30,000 consumers in 30 major economies found that those who felt an increasing alienation from American culture were also likely to report a growing disinclination to eat at McDonald's, or to buy Nike shoes. Most startling, 11 of the top 12 American multinationals saw falling or stagnant scores for "brand power," a measure of how well they are known and liked, while nine of the top 12 European and Asian multinationals saw their scores rise. "It's an early warning sign," says RoperASW managing director Tom Miller. "We're seeing a shift in the balance of brand power."

If the balance of power is indeed beginning to shift, it would mark an end to the virtually uninterrupted rise of American brands since World War II. All international brands are being undermined by two big changes in consumer attitudes: sagging confidence in the future, coupled with a growing tendency to buy local, according to Roper. But American brands suffer from two further blows: disgust with the string of corporate scandals that began with Enron, and the backlash against the war in Iraq. The Roper survey, which was released to corporate clients July 1 and to NEWSWEEK last week, shows that American giants like Citibank, Yahoo and MTV now "dominate the bottom" of the list of global companies ranked on the basis of trust. The companies that are losing brand power include McDonald's and Nike, which suffered the longest falls (chart).

In Germany, a hotbed of protest against U.S. policy in Iraq, the number of consumers who said they regularly use Nike products fell from 49 percent in 2002 to 29 percent in 2003, and the number who said they regularly eat at McDonald's fell from 43 to 34 percent. Once firm bastions of respect for American ideals like Hong Kong and Taiwan also showed a sharp turn against Nike, McDonald's and other American brands. A Nike spokesman responds that "the figures tell a different story"; revenues in the European region surged 24 percent in the three months ending May 31, the peak of the Iraq war, and two new Nike franchise stores opened in Paris within the past six weeks. McDonald's spokesman Walt Reichert says sales are flat (not down) in Germany due to the recession, attributes any fall in Hong Kong sales to SARS and generally dismisses the idea that anti-American feeling hurts the business. He points out that while three South Korean antiwar protesters got their picture in papers worldwide by climbing the Golden Arches in Seoul last March, they later went inside to eat. "Our ongoing research would identify the effects of anti-American feeling [on sales], and it does not," says McDonald's Europe spokesman Mike Love.

This is the standard party line at most companies. Though half the brands in the Roper survey are also clients, they tend to downplay or dismiss the evidence of slippage in their appeal. Indeed, eight of the top 10 most valuable brands are American, as ranked by Interbrand, which measures hard cash flow rather than fuzzy stuff like consumer "affinity" for America. Two thirds of the most valuable brands are U.S.-based, including many of those that appear to be losing traction in the Roper poll. Nonetheless, big companies would not be paying Roper to track anti-American sentiment so exhaustively, including 30,000 hour-long interviews with customers, if ...