Paul Kemp-Robertson: Bitcoin. Sweat. Tide. Meet the future of branded currency.
June 22, 2013
Currency -- the bills and coins you carry in your wallet and in your bank account -- is founded on marketing, on the belief that banks and governments are trustworthy. Now, Paul Kemp-Robertson walks us through a new generation of currency, supported by that same marketing … but on behalf of a private brand. From Nike Sweat Points to bottles of Tide (which are finding an unexpected use in illegal markets), meet the non-bank future of currencies. Paul Kemp-Robertson
- Advertising expert
Paul Kemp-Robertson is the Cofounder and Editorial Director of Contagious Communications, a multi-platform marketing resource. Full bio
Double-click the English subtitles below to play the video.
So if I was to ask you
what the connection between
a bottle of Tide detergent and sweat was,
you'd probably think that's the easiest question
that you're going to be asked in Edinburgh all week.
But if I was to say that they're both examples
of alternative or new forms of currency
in a hyperconnected, data-driven global economy,
you'd probably think I was a little bit bonkers.
But trust me, I work in advertising.
And I am going to tell you the answer,
but obviously after this short break.
So a more challenging question is one
that I was asked, actually, by one of our writers
a couple of weeks ago, and I didn't know the answer:
What's the world's best performing currency?
It's actually Bitcoin.
Now, for those of you who may not be familiar,
Bitcoin is a crypto-currency, a virtual currency, synthetic currency.
It was founded in 2008 by this anonymous programmer
using a pseudonym Satoshi Nakamoto.
No one knows who or what he is.
He's almost like the Banksy of the Internet.
And I'm probably not going to do it proper service here,
but my interpretation of how it works is that
Bitcoins are released through this process of mining.
So there's a network of computers that are challenged
to solve a very complex mathematical problem
and the person that manages to solve it first gets the Bitcoins.
And the Bitcoins are released,
they're put into a public ledger called the Blockchain,
and then they float, so they become a currency,
and completely decentralized, that's the sort of
scary thing about this, which is why it's so popular.
So it's not run by the authorities or the state.
It's actually managed by the network.
And the reason that it's proved very successful
is it's private, it's anonymous, it's fast, and it's cheap.
And you do get to the point where there's some wild fluctuations with Bitcoin.
So in one level it went from something like 13 dollars
to 266, literally in the space of four months,
and then crashed and lost half of its value in six hours.
And it's currently around that kind of
110 dollar mark in value.
But what it does show is that it's sort of gaining ground,
it's gaining respectability.
You get services, like Reddit and Wordpress
are actually accepting Bitcoin as a payment currency now.
And that's showing you that people
are actually placing trust in technology,
and it's started to trump and disrupt
and interrogate traditional institutions
and how we think about currencies and money.
And that's not surprising, if you think about
the basket case that is the E.U.
I think there was a Gallup survey out recently
that said something like, in America,
trust in banks is at an all-time low, it's something like 21 percent.
And you can see here some photographs from London
where Barclays sponsored the city bike scheme,
and some activists have done some nice piece
of guerrilla marketing here and doctored the slogans.
"Sub-prime pedaling." "Barclays takes you for a ride."
These are the more polite ones I could share with you today.
But you get the gist, so people have really started
to sort of lose faith in institutions.
There's a P.R. company called Edelman,
they do this very interesting survey every year
precisely around trust and what people are thinking.
And this is a global survey, so these numbers are global.
And what's interesting is that you can see that
hierarchy is having a bit of a wobble,
and it's all about heterarchical now,
so people trust people like themselves more
than they trust corporations and governments.
And if you look at these figures for the more developed markets
like U.K., Germany, and so on, they're actually much lower.
And I find that sort of scary.
People are actually trusting businesspeople
more than they're trusting governments and leaders.
So what's starting to happen, if you think about money,
if you sort of boil money down to an essence,
it is literally just an expression of value, an agreed value.
So what's happening now, in the digital age,
is that we can quantify value in lots of different ways
and do it more easily,
and sometimes the way that we quantify those values,
it makes it much easier
to create new forms and valid forms of currency.
In that context, you can see that networks like Bitcoin
suddenly start to make a bit more sense.
So if you think we're starting to question
and disrupt and interrogate what money means,
what our relationship with it is, what defines money,
then the ultimate extension of that is,
is there a reason for the government to be in charge
of money anymore?
So obviously I'm looking at this through a marketing prism,
so from a brand perspective,
brands literally stand or fall on their reputations.
And if you think about it, reputation has now become a currency.
You know, reputations are built on trust,
So if you've actually decided that you trust a brand,
you want a relationship, you want to engage with the brand,
you're already kind of participating in lots of new forms
So you think about loyalty.
Loyalty essentially is a micro-economy.
You think about rewards schemes, air miles.
The Economist said a few years ago that
there are actually more unredeemed air miles in the world
than there are dollar bills in circulation.
You know, when you are standing in line in Starbucks,
30 percent of transactions in Starbucks on any one day
are actually being made with Starbucks Star points.
So that's a sort of Starbucks currency
staying within its ecosystem.
And what I find interesting is that Amazon
has recently launched Amazon coins.
So admittedly it's a currency at the moment that's purely for the Kindle.
So you can buy apps and make purchases within those apps,
but you think about Amazon,
you look at the trust barometer that I showed you
where people are starting to trust businesses,
especially businesses that they believe in and trust
more than governments.
So suddenly, you start thinking,
well Amazon potentially could push this.
It could become a natural extension,
that as well as buying stuff --
take it out of the Kindle -- you could buy books, music,
real-life products, appliances and goods and so on.
And suddenly you're getting Amazon, as a brand,
is going head to head with the Federal Reserve
in terms of how you want to spend your money,
what money is, what constitutes money.
And I'll get you back to Tide, the detergent now,
as I promised.
This is a fantastic article I came across in New York Magazine,
where it was saying that drug users across America
are actually purchasing drugs
with bottles of Tide detergent.
So they're going into convenience stores,
and a $20 bottle of Tide
is equal to 10 dollars of crack cocaine or weed.
And what they're saying, so some criminologists
have looked at this and they're saying, well, okay,
Tide as a product sells at a premium.
It's 50 percent above the category average.
It's infused with a very complex cocktail of chemicals,
so it smells very luxurious and very distinctive,
and, being a Procter and Gamble brand,
it's been supported by a lot of mass media advertising.
So what they're saying is that drug users are consumers too,
so they have this in their neural pathways.
When they spot Tide, there's a shortcut.
They say, that is trust. I trust that. That's quality.
So it becomes this unit of currency,
which the New York Magazine described
as a very oddly loyal crime wave, brand-loyal crime wave,
and criminals are actually calling Tide "liquid gold."
Now, what I thought was funny was the reaction
from the P&G spokesperson.
They said, obviously tried to dissociate themselves from drugs,
but said, "It reminds me of one thing
and that's the value of the brand has stayed consistent." (Laughter)
Which backs up my point and shows he didn't even
break a sweat when he said that.
So that brings me back to the connection with sweat.
In Mexico, Nike has run a campaign recently
called, literally, Bid Your Sweat.
So you think about,
these Nike shoes have got sensors in them,
or you're using a Nike FuelBand
that basically tracks your movement, your energy,
your calorie consumption.
And what's happening here, this is where you've actually
elected to join that Nike community. You've bought into it.
They're not advertising loud messages at you,
and that's where advertising has started to shift now
is into things like services, tools and applications.
So Nike is literally acting as a well-being partner,
a health and fitness partner and service provider.
So what happens with this is they're saying, "Right,
you have a data dashboard. We know how far you've run,
how far you've moved, what your calorie intake, all that sort of stuff.
What you can do is, the more you run, the more points you get,
and we have an auction where you can buy Nike stuff
but only by proving that you've actually used the product to do stuff."
And you can't come into this. This is purely
for the community that are sweating
using Nike products. You can't buy stuff with pesos.
This is literally a closed environment, a closed auction space.
In Africa, you know, airtime has become
literally a currency in its own right.
People are used to, because mobile is king,
they're very, very used to transferring money,
making payments via mobile.
And one of my favorite examples from a brand perspective
going on is Vodafone, where, in Egypt,
lots of people make purchases in markets
and very small independent stores.
Loose change, small change is a real problem,
and what tends to happen is you buy a bunch of stuff,
you're due, say,
10 cents, 20 cents in change.
The shopkeepers tend to give you things like an onion
or an aspirin, or a piece of gum,
because they don't have small change.
So when Vodafone came in and saw this problem,
this consumer pain point, they created
some small change which they call Fakka,
which literally sits and is given
by the shopkeepers to people,
and it's credit that goes straight onto their mobile phone.
So this currency becomes credit, which again,
is really, really interesting.
And we did a survey that backs up the fact that,
you know, 45 percent of people
in this very crucial demographic in the U.S.
were saying that they're comfortable using
an independent or branded currency.
So that's getting really interesting here,
a really interesting dynamic going on.
And you think, corporations
should start taking their assets and thinking of them
in a different way and trading them.
And you think, is it much of a leap?
It seems farfetched, but when you think about it,
in America in 1860,
there were 1,600 corporations issuing banknotes.
There were 8,000 kinds of notes in America.
And the only thing that stopped that,
the government controlled four percent of the supply,
and the only thing that stopped it
was the Civil War breaking out,
and the government suddenly wanted to take control of the money.
So government, money, war, nothing changes there, then.
So what I'm going to ask is, basically,
is history repeating itself?
Is technology making paper money feel outmoded?
Are we decoupling money from the government?
You know, you think about, brands are starting to fill the gaps.
Corporations are filling gaps that governments can't afford to fill.
So I think, you know, will we be standing on stage
buying a coffee -- organic, fair trade coffee -- next year
using TED florins or TED shillings?
Thank you very much.
Thank you. (Applause)
- Advertising expert
Paul Kemp-Robertson is the Cofounder and Editorial Director of Contagious Communications, a multi-platform marketing resource.Why you should listen
How do consumers get attached to, come to rely on and trust, the brands they use? How do brands find new ways to develop these relationships? These are the questions Paul Kemp-Robertson spends his time wondering about. Kemp-Robertson is the Editorial Director of Contagious Communications, which he cofounded with Gee Thomson in 2004. Contagious Communications is a multi-arm advertising resource that runs the quarterly magazine Contagious, an app that showcases videos of innovative marketing case studies and various other online resources.
Kemp-Robertson has previously served as editor of shots and Worldwide Director of Creative Resources at Leo Burnett Chicago. He lives in St. Albans, Hertfordshire.
The original video is available on TED.com