So if I was to ask you what the connection between a bottle of Tide detergent and sweat was, you'd probably thinkthat's the easiest question that you're going to be askedin Edinburgh all week.
But if I was to saythat they're both examples of alternative or new forms of currency in a hyperconnected,data-driven global economy, you'd probably thinkI was a little bit bonkers.
But trust me, I work in advertising.
(Laughter) 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 bestperforming currency? It's actually Bitcoin.
Now, for those of youwho may not be familiar, Bitcoin is a crypto-currency, a virtualcurrency, synthetic currency.
It was founded in 2008by this anonymous programmer using a pseudonym Satoshi Nakamoto.
No one knows who or what he is.
He's almost like the Banksyof the Internet.
And I'm probably not goingto do it proper service here, but my interpretationof how it works is that Bitcoins are releasedthrough this process of mining.
So there's a networkof computers that are challenged to solve a very complexmathematical problem and the person that manages to solveit first gets the Bitcoins.
And the Bitcoins are released, they're put into a publicledger called the Blockchain, and then they float, sothey 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 runby the authorities or the state.
It's actually managed by the network.
And the reason that it's provedvery successful is it's private, it's anonymous,it's fast, and it's cheap.
And you do get to the point wherethere's some wild fluctuations with Bitcoin.
So in one level it wentfrom something like 13 dollars to 266, literallyin the space of four months, and then crashed and lost halfof its value in six hours.
And it's currently around that kind of 110 dollar mark in value.
But what it does showis that it's sort of gaining ground, it's gaining respectability.
You get services,like Reddit and WordPress are actually accepting Bitcoinas 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 thinkabout currencies and money.
And that's not surprising,if you think about the basket case that is the E.
I think there was a Gallupsurvey out recently that said something like, in America, trust in banks is at an all-timelow, it's something like 21 percent.
And you can see heresome photographs from London where Barclays sponsoredthe city bike scheme, and some activists havedone some nice piece of guerrilla marketing hereand doctored the slogans.
" "Barclaystakes you for a ride.
" These are the more polite onesI could share with you today.
But you get the gist, sopeople have really started to sort of lose faith in institutions.
There's a P.
company called Edelman, they do this very interestingsurvey every year precisely around trustand what people are thinking.
And this is a global survey,so these numbers are global.
And what's interestingis that you can see that hierarchy is having a bit of a wobble, and it's all about heterarchical now, so people trust peoplelike themselves more than they trust corporationsand governments.
And if you look at these figuresfor the more developed markets like U.
, Germany, and so on,they're actually much lower.
And I find that sort of scary.
People are actuallytrusting businesspeople more than they're trustinggovernments and leaders.
So what's starting to happen,if you think about money, if you sort of boil moneydown to an essence, it is literally just an expressionof value, an agreed value.
So what's happening now,in the digital age, is that we can quantify valuein lots of different ways and do it more easily, and sometimes the waythat we quantify those values, it makes it much easier to create new forms and validforms of currency.
In that context, you can seethat networks like Bitcoin suddenly start to make a bit more sense.
So if you think we're starting to question and disrupt and interrogatewhat money means, what our relationship with itis, what defines money, then the ultimate extension of that is, is there a reasonfor the government to be in charge of money anymore? So obviously I'm looking at thisthrough a marketing prism, so from a brand perspective, brands literally stand or fallon their reputations.
And if you think about it, reputationhas now become a currency.
You know, reputations are built on trust, consistency, transparency.
So if you've actually decidedthat you trust a brand, you want a relationship, youwant to engage with the brand, you're already kind of participatingin lots of new forms of currency.
So you think about loyalty.
Loyalty essentially is a micro-economy.
You think about rewardsschemes, air miles.
The Economist said a few years ago that there are actually moreunredeemed air miles in the world than there are dollarbills in circulation.
You know, when you are standingin line in Starbucks, 30 percent of transactionsin Starbucks on any one day are actually being madewith 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 momentthat's purely for the Kindle.
So you can buy apps and makepurchases within those apps, but you think about Amazon, you look at the trustbarometer that I showed you where people are startingto trust businesses, especially businessesthat 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, appliancesand goods and so on.
And suddenly you're gettingAmazon, as a brand, is going head to headwith the Federal Reserve in terms of how you wantto spend your money, what money is, what constitutes money.
And I'll get you backto Tide, the detergent now, as I promised.
This is a fantastic article I cameacross in New York Magazine, where it was saying that drugusers across America are actually purchasing drugs with bottles of Tide detergent.
So they're going into convenience stores, stealing Tide, and a $20 bottle of Tide is equal to 10 dollarsof crack cocaine or weed.
And what they're saying,so some criminologists have looked at this and they'resaying, well, okay, Tide as a product sells at a premium.
It's 50 percentabove the category average.
It's infused with a verycomplex cocktail of chemicals, so it smells very luxuriousand very distinctive, and, being a Procter and Gamble brand, it's been supported by a lotof mass media advertising.
So what they're saying is that drugusers are consumers too, so they have thisin their neural pathways.
When they spot Tide, there's a shortcut.
They say, that is trust.
I trust that.
So it becomes this unit of currency, which the New York Magazine described as a very oddly loyal crimewave, brand-loyal crime wave, and criminals are actuallycalling Tide "liquid gold.
" Now, what I thoughtwas funny was the reaction from the P&G spokesperson.
They said, obviously triedto dissociate themselves from drugs, but said, "It reminds me of one thing and that's the value of the brandhas stayed consistent.
" (Laughter) Which backs up my pointand shows he didn't even break a sweat when he said that.
So that brings me backto the connection with sweat.
In Mexico, Nike has runa 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 tracksyour 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 advertisingloud messages at you, and that's where advertisinghas started to shift now is into things like services,tools and applications.
So Nike is literally actingas a well-being partner, a health and fitness partnerand service provider.
So what happens with thisis they're saying, "Right, you have a data dashboard.
We know how far you've run, how far you've moved, what your calorieintake, all that sort of stuff.
What you can do is, the more yourun, the more points you get, and we have an auction whereyou can buy Nike stuff but only by proving that you've actuallyused the product to do stuff.
" And you can't come into this.
This is purely for the community that are sweating using Nike products.
Youcan't buy stuff with pesos.
This is literally a closedenvironment, 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 usedto transferring money, making payments via mobile.
And one of my favorite examplesfrom a brand perspective going on is Vodafone, where, in Egypt, lots of people make purchases in markets and very small independent stores.
Loose change, smallchange is a real problem, and what tends to happenis you buy a bunch of stuff, you're due, say, 10 cents, 20 cents in change.
The shopkeepers tend to giveyou things like an onion or an aspirin, or a piece of gum, because they don't have small change.
So when Vodafone camein 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 goesstraight onto their mobile phone.
So this currency becomescredit, which again, is really, really interesting.
And we did a surveythat backs up the fact that, you know, 45 percent of people in this very crucialdemographic in the U.
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 assetsand 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 corporationsissuing banknotes.
There were 8,000 kindsof notes in America.
And the only thing that stopped that, the government controlledfour percent of the supply, and the only thing that stopped it was the Civil War breaking out, and the government suddenly wantedto 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 papermoney feel outmoded? Are we decoupling moneyfrom the government? You know, you think about, brandsare starting to fill the gaps.
Corporations are filling gapsthat 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.
(Applause) Thank you.