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So if I was to ask you

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what the connection between

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a bottle of Tide detergent and sweat was,

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you'd probably think
that's the easiest question

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00:00:09,520 --> 00:00:12,276
that you're going to be asked
in Edinburgh all week.

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But if I was to say
that they're both examples

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of alternative or new forms of currency

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00:00:18,168 --> 00:00:21,682
in a hyperconnected,
data-driven global economy,

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you'd probably think
I was a little bit bonkers.

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But trust me, I work in advertising.

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(Laughter)

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And I am going to tell you the answer,

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but obviously after this short break.

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So a more challenging question is one

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that I was asked, actually,
by one of our writers

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a couple of weeks ago,
and I didn't know the answer:

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What's the world's best
performing currency?

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00:00:43,037 --> 00:00:44,923
It's actually Bitcoin.

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Now, for those of you
who may not be familiar,

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Bitcoin is a crypto-currency, a virtual
currency, synthetic currency.

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It was founded in 2008
by this anonymous programmer

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using a pseudonym Satoshi Nakamoto.

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No one knows who or what he is.

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He's almost like the Banksy
of the Internet.

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And I'm probably not going
to do it proper service here,

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but my interpretation
of how it works is that

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Bitcoins are released
through this process of mining.

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So there's a network
of computers that are challenged

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to solve a very complex
mathematical problem

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and the person that manages to solve
it first gets the Bitcoins.

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And the Bitcoins are released,

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they're put into a public
ledger called the Blockchain,

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and then they float, so
they become a currency,

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and completely decentralized,
that's the sort of

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scary thing about this,
which is why it's so popular.

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So it's not run
by the authorities or the state.

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It's actually managed by the network.

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And the reason that it's proved
very successful

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is it's private, it's anonymous,
it's fast, and it's cheap.

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And you do get to the point where
there's some wild fluctuations with Bitcoin.

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So in one level it went
from something like 13 dollars

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to 266, literally
in the space of four months,

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and then crashed and lost half
of its value in six hours.

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And it's currently around that kind of

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110 dollar mark in value.

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But what it does show
is that it's sort of gaining ground,

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it's gaining respectability.

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You get services,
like Reddit and Wordpress

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are actually accepting Bitcoin
as a payment currency now.

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00:02:05,530 --> 00:02:07,449
And that's showing you that people

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are actually placing trust in technology,

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and it's started to trump and disrupt

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and interrogate traditional institutions

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and how we think
about currencies and money.

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And that's not surprising,
if you think about

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the basket case that is the E.U.

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I think there was a Gallup
survey out recently

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that said something like, in America,

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trust in banks is at an all-time
low, it's something like 21 percent.

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And you can see here
some photographs from London

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where Barclays sponsored
the city bike scheme,

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and some activists have
done some nice piece

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of guerrilla marketing here
and doctored the slogans.

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"Sub-prime pedaling." "Barclays
takes you for a ride."

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These are the more polite ones
I could share with you today.

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But you get the gist, so
people have really started

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to sort of lose faith in institutions.

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There's a P.R. company called Edelman,

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they do this very interesting
survey every year

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precisely around trust
and what people are thinking.

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And this is a global survey,
so these numbers are global.

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And what's interesting
is that you can see that

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00:03:02,183 --> 00:03:04,763
hierarchy is having a bit of a wobble,

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00:03:04,787 --> 00:03:06,549
and it's all about heterarchical now,

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so people trust people
like themselves more

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than they trust corporations
and governments.

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And if you look at these figures
for the more developed markets

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like U.K., Germany, and so on,
they're actually much lower.

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And I find that sort of scary.

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People are actually
trusting businesspeople

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00:03:20,215 --> 00:03:23,620
more than they're trusting
governments and leaders.

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So what's starting to happen,
if you think about money,

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if you sort of boil money
down to an essence,

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it is literally just an expression
of value, an agreed value.

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So what's happening now,
in the digital age,

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is that we can quantify value
in lots of different ways

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and do it more easily,

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and sometimes the way
that we quantify those values,

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it makes it much easier

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to create new forms and valid
forms of currency.

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In that context, you can see
that networks like Bitcoin

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suddenly start to make a bit more sense.

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So if you think we're starting to question

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and disrupt and interrogate
what money means,

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00:04:00,832 --> 00:04:03,915
what our relationship with it
is, what defines money,

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00:04:03,939 --> 00:04:06,993
then the ultimate extension of that is,

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00:04:07,017 --> 00:04:09,846
is there a reason
for the government to be in charge

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00:04:09,870 --> 00:04:11,302
of money anymore?

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00:04:11,326 --> 00:04:14,136
So obviously I'm looking at this
through a marketing prism,

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00:04:14,160 --> 00:04:15,806
so from a brand perspective,

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00:04:15,830 --> 00:04:19,482
brands literally stand or fall
on their reputations.

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00:04:19,505 --> 00:04:21,808
And if you think about it, reputation
has now become a currency.

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You know, reputations are built on trust,

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consistency, transparency.

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00:04:26,493 --> 00:04:29,017
So if you've actually decided
that you trust a brand,

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you want a relationship, you
want to engage with the brand,

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you're already kind of participating
in lots of new forms

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of currency.

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So you think about loyalty.

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Loyalty essentially is a micro-economy.

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You think about rewards
schemes, air miles.

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The Economist said a few years ago that

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there are actually more
unredeemed air miles in the world

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than there are dollar
bills in circulation.

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You know, when you are standing
in line in Starbucks,

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30 percent of transactions
in Starbucks on any one day

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are actually being made
with Starbucks Star points.

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So that's a sort of Starbucks currency

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00:05:02,954 --> 00:05:04,963
staying within its ecosystem.

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00:05:04,987 --> 00:05:07,891
And what I find interesting is that Amazon

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has recently launched Amazon coins.

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So admittedly it's a currency at the moment
that's purely for the Kindle.

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So you can buy apps and make
purchases within those apps,

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00:05:16,922 --> 00:05:18,295
but you think about Amazon,

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you look at the trust
barometer that I showed you

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where people are starting
to trust businesses,

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especially businesses
that they believe in and trust

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more than governments.

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So suddenly, you start thinking,

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well Amazon potentially could push this.

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It could become a natural extension,

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that as well as buying stuff --

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take it out of the Kindle --
you could buy books, music,

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real-life products, appliances
and goods and so on.

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00:05:41,301 --> 00:05:43,705
And suddenly you're getting
Amazon, as a brand,

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00:05:43,729 --> 00:05:45,322
is going head to head
with the Federal Reserve

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00:05:45,346 --> 00:05:47,489
in terms of how you want
to spend your money,

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00:05:47,513 --> 00:05:49,864
what money is, what constitutes money.

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And I'll get you back
to Tide, the detergent now,

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as I promised.

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This is a fantastic article I came
across in New York Magazine,

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where it was saying that drug
users across America

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are actually purchasing drugs

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with bottles of Tide detergent.

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00:06:04,886 --> 00:06:06,950
So they're going into convenience stores,

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stealing Tide,

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00:06:08,084 --> 00:06:10,254
and a $20 bottle of Tide

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is equal to 10 dollars
of crack cocaine or weed.

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00:06:15,154 --> 00:06:17,393
And what they're saying,
so some criminologists

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have looked at this and they're
saying, well, okay,

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Tide as a product sells at a premium.

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It's 50 percent
above the category average.

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It's infused with a very
complex cocktail of chemicals,

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so it smells very luxurious
and very distinctive,

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and, being a Procter and Gamble brand,

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it's been supported by a lot
of mass media advertising.

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So what they're saying is that drug
users are consumers too,

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so they have this
in their neural pathways.

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When they spot Tide, there's a shortcut.

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They say, that is trust. I trust that.
That's quality.

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So it becomes this unit of currency,

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which the New York Magazine described

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00:06:49,058 --> 00:06:52,531
as a very oddly loyal crime
wave, brand-loyal crime wave,

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and criminals are actually
calling Tide "liquid gold."

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Now, what I thought
was funny was the reaction

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from the P&G spokesperson.

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00:06:59,467 --> 00:07:02,467
They said, obviously tried
to dissociate themselves from drugs,

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00:07:02,491 --> 00:07:04,873
but said, "It reminds me of one thing

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and that's the value of the brand
has stayed consistent." (Laughter)

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Which backs up my point
and shows he didn't even

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break a sweat when he said that.

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So that brings me back
to the connection with sweat.

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In Mexico, Nike has run
a campaign recently

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called, literally, Bid Your Sweat.

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So you think about,

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00:07:20,832 --> 00:07:22,542
these Nike shoes have got sensors in them,

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or you're using a Nike FuelBand

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00:07:24,067 --> 00:07:26,724
that basically tracks
your movement, your energy,

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00:07:26,748 --> 00:07:28,529
your calorie consumption.

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And what's happening here,
this is where you've actually

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elected to join that Nike community.
You've bought into it.

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They're not advertising
loud messages at you,

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00:07:35,538 --> 00:07:37,712
and that's where advertising
has started to shift now

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00:07:37,736 --> 00:07:40,366
is into things like services,
tools and applications.

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So Nike is literally acting
as a well-being partner,

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00:07:43,335 --> 00:07:46,196
a health and fitness partner
and service provider.

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00:07:46,220 --> 00:07:48,354
So what happens with this
is they're saying, "Right,

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00:07:48,378 --> 00:07:50,950
you have a data dashboard.
We know how far you've run,

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00:07:50,974 --> 00:07:53,719
how far you've moved, what your calorie
intake, all that sort of stuff.

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00:07:53,743 --> 00:07:56,941
What you can do is, the more you
run, the more points you get,

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00:07:56,965 --> 00:07:59,919
and we have an auction where
you can buy Nike stuff

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00:07:59,943 --> 00:08:03,442
but only by proving that you've actually
used the product to do stuff."

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00:08:03,466 --> 00:08:05,562
And you can't come into this.
This is purely

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00:08:05,586 --> 00:08:07,285
for the community that are sweating

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00:08:07,309 --> 00:08:09,920
using Nike products. You
can't buy stuff with pesos.

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This is literally a closed
environment, a closed auction space.

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In Africa, you know, airtime has become

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literally a currency in its own right.

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People are used to,
because mobile is king,

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00:08:22,280 --> 00:08:25,101
they're very, very used
to transferring money,

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00:08:25,125 --> 00:08:27,079
making payments via mobile.

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00:08:27,103 --> 00:08:29,770
And one of my favorite examples
from a brand perspective

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00:08:29,794 --> 00:08:31,715
going on is Vodafone, where, in Egypt,

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00:08:31,739 --> 00:08:34,424
lots of people make purchases in markets

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00:08:34,448 --> 00:08:36,205
and very small independent stores.

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00:08:36,229 --> 00:08:38,631
Loose change, small
change is a real problem,

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00:08:38,655 --> 00:08:41,179
and what tends to happen
is you buy a bunch of stuff,

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00:08:41,203 --> 00:08:42,164
you're due, say,

209
00:08:42,188 --> 00:08:44,307
10 cents, 20 cents in change.

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00:08:44,331 --> 00:08:46,947
The shopkeepers tend to give
you things like an onion

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00:08:46,971 --> 00:08:48,447
or an aspirin, or a piece of gum,

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00:08:48,471 --> 00:08:50,175
because they don't have small change.

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00:08:50,199 --> 00:08:52,342
So when Vodafone came
in and saw this problem,

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00:08:52,366 --> 00:08:53,793
this consumer pain point, they created

215
00:08:53,817 --> 00:08:55,867
some small change which they call Fakka,

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00:08:55,891 --> 00:08:57,548
which literally sits and is given

217
00:08:57,572 --> 00:08:59,743
by the shopkeepers to people,

218
00:08:59,767 --> 00:09:02,577
and it's credit that goes
straight onto their mobile phone.

219
00:09:02,601 --> 00:09:04,963
So this currency becomes
credit, which again,

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00:09:04,987 --> 00:09:06,431
is really, really interesting.

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00:09:06,455 --> 00:09:08,741
And we did a survey
that backs up the fact that,

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00:09:08,765 --> 00:09:10,387
you know, 45 percent of people

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00:09:10,411 --> 00:09:13,681
in this very crucial
demographic in the U.S.

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00:09:13,705 --> 00:09:15,705
were saying that they're comfortable using

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00:09:15,729 --> 00:09:18,218
an independent or branded currency.

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00:09:18,242 --> 00:09:20,242
So that's getting really interesting here,

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00:09:20,266 --> 00:09:22,132
a really interesting dynamic going on.

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00:09:22,156 --> 00:09:23,657
And you think, corporations

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00:09:23,681 --> 00:09:26,391
should start taking their assets
and thinking of them

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00:09:26,415 --> 00:09:28,926
in a different way and trading them.

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00:09:28,950 --> 00:09:31,386
And you think, is it much of a leap?

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00:09:31,410 --> 00:09:34,425
It seems farfetched,
but when you think about it,

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00:09:34,449 --> 00:09:37,143
in America in 1860,

234
00:09:37,167 --> 00:09:41,350
there were 1,600 corporations
issuing banknotes.

235
00:09:41,374 --> 00:09:44,650
There were 8,000 kinds
of notes in America.

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00:09:44,674 --> 00:09:45,907
And the only thing that stopped that,

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00:09:45,931 --> 00:09:48,515
the government controlled
four percent of the supply,

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00:09:48,539 --> 00:09:50,159
and the only thing that stopped it

239
00:09:50,183 --> 00:09:51,852
was the Civil War breaking out,

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00:09:51,876 --> 00:09:54,924
and the government suddenly wanted
to take control of the money.

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00:09:54,948 --> 00:09:58,566
So government, money, war,
nothing changes there, then.

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00:09:58,590 --> 00:10:01,421
So what I'm going to ask is, basically,

243
00:10:01,445 --> 00:10:03,816
is history repeating itself?

244
00:10:03,840 --> 00:10:07,717
Is technology making paper
money feel outmoded?

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00:10:07,741 --> 00:10:09,860
Are we decoupling money
from the government?

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00:10:09,884 --> 00:10:12,884
You know, you think about, brands
are starting to fill the gaps.

247
00:10:12,908 --> 00:10:16,115
Corporations are filling gaps
that governments can't afford to fill.

248
00:10:16,139 --> 00:10:18,876
So I think, you know,
will we be standing on stage

249
00:10:18,900 --> 00:10:22,561
buying a coffee -- organic,
fair trade coffee -- next year

250
00:10:22,585 --> 00:10:25,342
using TED florins or TED shillings?

251
00:10:25,366 --> 00:10:27,029
Thank you very much.

252
00:10:27,053 --> 00:10:29,229
(Applause)

253
00:10:29,253 --> 00:10:34,300
Thank you. (Applause)