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Paul Kemp-Robertson

Co-Founder & Editorial Director / Contagious, Contagious Communications

TEDCRED 100+

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Are people starting to trust brands and corporations more than governments?

Technology has reconfigured the mechanics of the traditional business landscape, changing what we buy and how we pay for it. Peer-to-peer systems like AirBnB and TaskRabbit encourage people to swap, share and rent amongst themselves rather than buy from stores. Concurrent with the growth in collaborative consumption is the emergence of a new understanding of 'money'. The limits of traditional monetary units are being tested against a backdrop of financial uncertainty, currency volatility and technological progress. People are coming to realise that their data, everyday activities and social chatter are alternative forms of value and payment. Slowly, we're seeing new micro- and crypto-economies being forged that aren't necessarily based on a traditional understanding of cash.

Surveys such as the Edelman Trust barometer suggest that there is a global weakening of trust in institutions and governments, If people are starting to trust businesses and brands more than their civic leaders, should we be questioning whether governments need to be in sole charge of money any more? In 1860 there were 1600 varieties of currency in America. Are brands hoping that history will start repeating itself? In a digital age, are loyalty programs becoming new forms of currency? Will people start to demand commodities (products and services) from brands in exchange for access to their personal data and consumption patterns? Are mobile phone credits more useful to modern consumers than loose change from a shopkeeper?

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    Jul 26 2013: I have found the more people involved and the larger any entity is the more untrustworthy they are.
  • Jul 27 2013: Trust is earned. Who has earned it?

    Who must earn it by necessity?

    That would be organizations that 1) do not have a monopoly, 2) deliver products of a quality that a discerning customer can detect after a short period of use, and 3) must have repeat sales, or word of mouth sales to survive.

    The differentiation of the 50 United States allows governments to compete. So state governments have a chance at competing to earn trust.
  • Jul 26 2013: I believe that people know they can switch brands if something is wrong or make a loud enough noise, especially with social media, and it usually is fixed. We also understand Companies motivation, greed and money.

    With governments we are not sure of the motivation of politicians - there is an old saying, an honest politician stays bought - unfortunately, I feel that today's politician in the US is to do anything to get re-elected or get money for re-election. They will switch sides and lie.
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    Jul 26 2013: i don't get the relation between the title and the exposition. it gives me the impression that we live in an era when technology finally enables us to cooperate directly, without government help. but that is a completely false picture. governments interfering with people's life is a new thing. a few hundred years ago governments/kings virtually did nothing, they did not build roads, the did not provide healthcare, they did not provide education, they were not involved in safety regulations, and so on. today, government expenditures are in the range of 30-60% of GDP. that number was 1-2% even a hundred years ago. in the 1000's, courts did not deal with peasants' problems with each other. the only relation between kings or noble men and peasants were taxation and some other looting. otherwise, peasants were on their own.

    the entire human history, i mean the history of the average pedestrian, not the nobility, is peer to peer cooperation. we don't need the internet, we don't need bitcoin, we don't need cellphones to be able to live without the help of rulers. living without the help of rulers is the norm, and we diverted from it only in the last couple of decades.

    the result is failure on all accounts. it is only a matter of time for people to recognize that it is not not the execution that is wrong. the whole concept is unworkable. we need to go back to peer to peer.
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    Jul 26 2013: private corporations, "brands" and government all employ the same tools for convincing people that they are needed. it's more of a comment on how people respond to advertising and spin doctoring than it is on the integrity of a brand or institution.

    in the end, it's never lies that can be pointed to but, at very best, it's only selective honesty.

    in my opinion, there's a huge discrepancy between what people believe and what they put on a survey and between survey results and the resulting spin.

    facebook is a prime example. people click like, most often to receive something free. i don't think that carries any merit beyond the initial click. what is happening is something a false economy. i know that doesn't matter to corporations when they can wave a huge like network around but there's a breakdown there somewhere.

    i have a band and perhaps we are not doing ourselves any favours but we do not advertise or beg for likes and shares. as a result, our like network is small but real.
  • Jul 31 2013: ...when people are more towards external world than internal world it happens...and this would happen more...

    ...for the people limited to bread and butter corporates are the best choice as they provide livelihood and things needed to live also...and politics is attracting those who want to have power and luxury life...to reach high...less contributory more luxury and power...

    ...but this won't take long to come back as waves may take high but every wave after some time return to normal...challenge is for role models and education...bigger for parents...

    regards

    Manish Kumar Aggarwal
    The Mindfood Chef
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    Jul 30 2013: Absolutely not. Government, even corrupt ones, are still 'big brother'. corporations do go bankrupt, do cheat, and without auditors and legislation could get away with murder. the corporate currencies are still only marketing tools.

    Just take a look online at how many health products are out there and look for the disclaimer saying it's not an FDA approved drug that treats health conditions. Self medication herbals with no standards. you can still buy, and there is a market for powdered tiger bones, rhinoceros horn, hornets nests.

    remember the the cure all tonics in Tom Sawyer? or was it Huckleberry Fin? Only some of those have been eliminated.

    This is not just a feature of alternative medicine such as Ayurveda, naturopathy, reiki, Traditional Chinese Medicine, Homeopathy, etc.

    Allopathy "western medicine" supposedly trustworthy according to the scientific method is still suspect... why? corporations. humans. liars and cheats. why was the whole field of pharmacovigilance invented? because thalidomide, the drug that cured morning sickness in pregnant women, caused birth defects. but the company continued to sell it untill it was forced to stop by...... governments.

    Those dirty rotten cheats in government slow down the process, but still end up doing some public services despite their best efforts.

    Brand and corporate identity is still important because the ethical consumer can directly impact human lives and sometimes speed up the bureaucracy. But will never replace government. Even in currency.
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    Jul 30 2013: Differentiate for me please the difference between branded currency and coupons. I mean aside from the fact that one is electronic. It does not seem like a new idea to me. Just a new application of an old idea to get consumers to return to the same brand. I gotta say, I used to like it when dishes and glassware came in boxes of tide, but even then, that currency was not enough to make me purchase a more expensive detergent.

    Money and currency are theoretical and based on a belief system. If everyone believes money has value, everyone will try and get more of it. Money is still theoretical even if we change the belief system that underlies the value and make it electronic currency.

    Frankly, I do not trust any corporation or brand more than the government. I trust neither equally.

    As a consumer, I make purchase decisions based on the availability of currency, whatever kind, coupons, sales, cash, debit card or barter. I do not pay extra for a brand. In essence, brand loyalty is a form of brainwashing, especially detergent...

    When you work hard for the little you have you get picky about where you spend it.
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      Jul 30 2013: Hi. Coupons tend to be tied to purchases or small discounts. The ubiquity of mobile phones, the rise of wearable technology like the Nike Fuelband or Jawbone Up and people’s increasing willingness to share personal data with brands is creating all kinds of possibilities for alternative currencies & commodities. I have explained some of these underneath my TED U talk here http://www.ted.com/talks/paul_kemp_robertson_bitcoin_sweat_tide_meet_the_future_of_branded_currency.html
      Branded currencies could mean all kinds of things. If you look at the movement towards hyper-local shadow currencies such as the Bristol Pound (http://bristolpound.org/) or the Ithaca Hours network (http://www.ithacahours.org/) it’s not too much of a stretch to think that an organisation like TED could issue its own currency, pegged to the dollar. TED florins (!) could be used to purchase products or services only from those companies endorsed by the TED ‘brand’ and proven to be ethical, sustainable, charitable, etc. Amazon Coins have been released for purchases inside the Kindle Fire app environment. Some economists are pointing out that this ‘currency’ could easily become a shadow to dollars in time; for example if one Amazon Coin was officially worth one dollar, Amazon could offer products for sale whereby the Coins price is lower than the dollar price. This would encourage people to stay loyal to the Amazon ecosystem: Amazon would happily take a hit via such discounting because in the long run it would make more sales, retain customers and have access to all kinds of valuable shopper data.
      In my TED U talk, I refer to another kind of branded currency that Vodafone launched in Egypt, whereby people choose to receive ‘Fakka’ (mobile phone credits) instead of loose change in shops: http://www.youtube.com/watch?v=BqOsYNilElY In Mexico, Nike allowed people to bid their ‘sweat’ in exchange for exclusive goods that could not be purchased with real money: http://www.youtube.com/watch?v=kt3npMtx49s
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        Aug 1 2013: Believe it or not, I've been following Bitcoin for a while so your tedtalk was not the first I heard of it. It still is a closed currency system where vendors award points to be used to attain products they profit from. Most of us know about 'front loading' and 'back loading' profit. This just seems to do the same thing across vendors.

        Cashing in points is cashing in points. Whether you are S&H Green Stamps, airline miles, or tide.
        http://en.wikipedia.org/wiki/S%26H_Green_Stamps

        It still smells the same in a different dress. And I do get it, as an advertising/marketing person, you job is to make us want the dress.
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    Jul 28 2013: Hi Fritzie. You are right; there was a huge controversy a couple of years ago when BA changed its airmiles scheme into a new service called Avios. People who had been loyal to BA in the air and who had been diligently accruing points by purchashing goods at accredited retailers were suddenly faced with the prospect of paying hundreds of pounds in taxes and charges. See article here: http://www.guardian.co.uk/money/2011/sep/09/angry-flyers-airmiles-avios

    One of the points I made in my TED U talk is that the balance of power is shifting: people know that the data they hold as consumers (their purchasing habits, quantified exercise patterns, social media influence, etc) means that they don't necessarily need to receive rewards purely via purchases; in an age of targeted advertising they can now acquire goods and services in exchange for sharing their data with marketers.
  • Jul 28 2013: People generally trust brands from a narrow perspective of what those brand bring to the quality of their life. The brands are only part of their life. Corporations play their games too. People may get duped in the process but at the end they can dump the brands if they wish so. Governments are different from brands and corporations as they have bigger influance on a persons quality of life.

    Governments in last few decades have missed the larger reason for their existance. Politicians have sabotaged the very purpose of governance (democratic or otherwise) for their own personal ambitions. If governance is corrupted due to the short-term ambitions of the politicians and authorities, corporations too have quarter-on-quarter greed to blame. At the end, one cannot trust both now !
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      Jul 28 2013: Hi Anand. Thanks for the comment. It's easy to see why you feel that way!

      Hopefully social media will continue to force corporations to be increasingly transparent and accountable for their actions. Also, there are plenty of consumer surveys out there that suggest that people are increasingly choosing to buy products from companies with a social purpose, who are committed to 'doing good'. At Contagious, we have featured many companies who are making a genuine effort to give back to society.

      My favourite examples would be Patagonia for its environmental credentials, Chipotle for its active support for rural communities and organic farming in the US, Hiutt Jeans in the UK for resurrecting clothes manufacturing in a depressed town,,Toms Shoes and Sir Richard's Condoms for their 'buy one, give one'philosophy, Raspberry Pi for democratising access to computing and Nike for its charitable work with adolescent girls in developing countries ( http://www.girleffect.org/ )
  • Jul 28 2013: I don't think there is much trust for either unfortunately. Brands will only look after you interests until a financial situation arises where exploiting your interests has greater returns than keeping your interests.

    Most governments have lost the legitimacy to govern because they have become nothing more than puppets to corporations and the rich.

    In both scenarios money is generally the root of the problem.

    Governments need to be separated from external influences so that they can regain the trust. Governments also need to refocus on making decisions that are based on improving the quality and enjoyment their citizens lives.

    Brands/companies should also change their focus so that they are run to the benefit of their customers and employees lives, not for the betterment of the stock market.

    I think in summary both end up falling into the same trap, both lose trust because their focus is based on increasing wealth in the stock market rather than increase the happiness of the people they were setup to serve.
  • Jul 27 2013: re:Are people starting to trust brands and corporations more than governments?

    No, but interestingly people are according (by indirect methods) corporations with individual personalities and value systems (there have been ted talks about it). Which is a step in that direction.
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    Jul 26 2013: As others have pointed out, distrust in the government goes way back- it is my opinion that most realize the corruption going on and simply tolerate it, brush it to the side until one day, it goes too far. Oh, I've had many conversations on the fall of the dollar, the fall of the government, and one world currency among other things. So, do I believe it is valid? Should the people trust the puppet or the puppet master? As far as I'm concerned, it's all the same. As Frank and Lawren pointed out- governments seek control, business seeks money. Both are mechanisms for keeping us nice and comfortable in our little doll house, and one is just as trustworthy as the other. However, as Lawren also noted, at least I can choose to not spend money with a company. The government just takes it, and if I refuse, takes my freedom along with it.

    I must say, I think I would trust a credit with a company over cash just as readily, and perhaps in the future it won't even be a question. I agree that our economy is heading to more diverse forms of currency, and it's my belief this is a benefit rather then concern. Less opportunity for collapse, and more opportunity for human interaction and control.
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    Jul 26 2013: Some brands are more than 100 years old, which proves brands have been enjoying people's trust since long back .
  • Jul 26 2013: I noticed your statistics. Maybe these ideas are not as radical as they seem. Look at stock and bonds etc., but remember one thing. People fight and die for contries Since the Hensatic League has anyone done the same for a business?
  • Jul 26 2013: Lol,whom can you trust more between brands ,corporations and governments?That's good question Paul Kemp-Robertson.

    in my conception of trust,once I decide I just trust what I selected.It is from inner thinking.I don't bother myself to suspect too much what I chose.Maybe because I learnt Computer Education major,I prefer computer binary theory:1 and 0,not 1 then 0,as simple as possible,that's why computer can restore amount of data without mistake:).

    Never attached trust to any else but ourselves thinking
  • Jul 25 2013: God, I hope that people never trust corporations like their government. People must remember that companies and corporations are there for one reason only: to make money in every way they can. This makes them automatically suspect since it means they are not there for the good of the people like governments are supposed to be.
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      Jul 26 2013: Oh c'mon, Frank. Even you weren't able to say 'governments are' without adding a caveat. Governments are there for one reason only: to have power over us in every way they can. It always amazes me when folks think that he rich and powerful people in business are evil and corrupt, but the rich and powerful people in politics only want to hug us and kiss our boo-boos. At least with a corporation I can choose not to do business. But the government has me under their thumb no matter what I do. Give me a CEO over a politician any day.
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    Jul 25 2013: I watched your talk about Bitcoin earlier today, Paul, and I was astounded at your reaction to the Edelman Trust statistics. When have we not trusted government less than business!

    Or is it just the American perspective, perhaps? America was settled by people who distrusted their governments of origin, hence the emigration. Americans revel in their distrust of government. It's the core value of our Constitution and Bill of Rights.

    Sure, we generally distrust businesses too, but we'll trust a corporation over the "guv'ment" any day.
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      Jul 25 2013: I agree with you that there is a long tradition in America of distrust in government and of questioning authority of all kinds. This is one of the things I have discovered people in other countries often do not know about Americans.
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      Jul 26 2013: Hi Lawren - I wish every country in the world shared America's distrust of government! The Edelman Trust Barometer is a global sample, so reflects a wide range of countries - including several major European and Asian economies where 'the State' plays a much more active (some would say authoritarian or nannying) role.

      My reaction to the stats was because there has been a serious erosion in trust in countries where traditionally the scores have been much higher. This has started to create fissures and in many countries, 'brands' are stepping in to offer tools and services that would otherwise have been supplied by the state. For example, in Kenya the telecoms company Safaricom launched a service called Daktari 1525 to provide qualified medical advice to subscribers via their mobile phones. Given the relative lack of doctors and the difficult transport infrastructures in remote areas, this has proved to be an effective alternative. See the promo video here: http://www.youtube.com/watch?v=x6anx66G_2w
      Elsewhere in Africa, the Coca-Cola Company has co-created the ColaLife charity to distribute vital medical supplies to places that government officials and NGOs were failing to reach: see Wired's artilce here: http://www.wired.co.uk/news/archive/2013-03/28/colalife
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    Jul 25 2013: Why are people going to prefer to trust corporations they can invest in and purchase from compared to a government they can vote on and depend upon. With a government people are very involved in their belief systems to a degree which corporations simply don't address. If abortion, pro-life or pro-choice, is important to me, if the death penalty, enforced or abolished, is important to me, if prayer in school is or isn't important to me, etc., what does a corporation have to do with that, how is a brand relevant to my belief system?

    I think the best way to answer this question (and I'm too lazy to attempt it here) is to forget about money and to stop treating currency as the sole reason why people would trust brands and corporations more than governments. Instead, ask yourself, do these corporations or the government best preserve the Constitution, the Bill of Rights, the fundamental nature of the American citizen with the natural rights to life, liberty and the pursuit of happiness. Do I want a company to be the governing body when it comes to gay marriage or gender equality?

    The government has the stated intention of being of the people, by the people an for the people. That cannot be said or a corporation. So why choose the later?
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      Jul 26 2013: Hi Daniel. I agree that governments are best placed to preserve national constitutions and social rights. My question was prompted by the talk I was asked to give at TED University in Edinburgh last month: http://www.ted.com/talks/paul_kemp_robertson_bitcoin_sweat_tide_meet_the_future_of_branded_currency.html
      I only had nine minutes to cover the complex subject of the emergence of alternative forms of currencies and how brands are starting to blur the distinction between currency and commodity by offering people new ways of acquiring goods and services. I quoted the Edelman Trust Barometer survey which shows a global decline or decentralization of trust in government officials and regulators, as well as an Opinium/Contagious survey that suggests that 45% of 25-34-year olds in the US would 'feel comfortable using an independently issued or branded currency.' I accept that survey results can often be taken with a pinch of salt, but my question was more to do with whether or not people have started to look towards corporations to provide the kind of useful, everyday tools and services that governments either can't afford or are no longer prepared to fulfil. Please see my reply to Lawren Jones (above) for some examples.
      I saw a quote recently from Professor Edward Castronova, an expert in synthetic economies at Indiana University: he was commenting on the launch of Amazon Coins, which is a digital currency currently restricted for use within apps and games within the Kindle Fire environment. He suggested that Amazon could (easily) eventually extend Coins into the wider Amazon network, which would effectively be creating a shadow economy. That's the area that I'm interested in, out of professional curiosity: in certain parts of the world, will people begin to trust branded currencies more than national ones? Will we start to see various forms of alternative currencies and payment systems running alongside the traditional?
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        Jul 26 2013: Thanks for the thorough reply. I'll do my homework (watch your talk and the linked talks; read the other comments, etc.) on this subject. And then rejoin the conversation later.
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        Jul 26 2013: Would you put airline miles that people can then use to purchase further tickets or magazines in this category?

        Are there provisions in these alternative currencies that they can expire or that the terms can change that affect what they are worth?
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          Jul 26 2013: Fritzie: I can recall an article from The Economist a few years back that referred to airmiles as a currency (albeit in inverted commas). It pointed out that there are more un-redeemed miles in circulation than dollar bills!
          Airmiles are relatively passive forms. At Contagious, we've been tracking some unconventional forms of new 'currencies' (in a loose sense of the word) that brands are playing around with. My favourite comes from Mexico where people who use Nike's wearable technology (Fuelband or Nike+) could opt-in to an exclusive auction that allowed them to bid for items of Nike clothing and footwear by paying with their sweat - literally! The auction worked by tracking the data being exchanged between the user and Nike that tracks the level of exercise, energy consumption, miles covered, etc. Nike converts this activity into a sliding scale of points: the more intensely you exercise, the more 'Fuelpoints' you accrue. These points then become a crypto-currency that Nike's consumers can use to 'purchase' certain Nike products that are impossible to buy with conventional money.
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        Jul 26 2013: Yes, I heard that in your talk.

        The reason I asked about airline miles is that I thought there was an issue some years ago with airlines changing the terms (for the worse) of what airline miles could be exchanged for (the value in exchange) or the time period over which they needed to be spent in a way that applied not only to miles still to be accrued but also to mileage points that had already been collected.

        Perhaps I remember this incorrectly.
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    Jul 25 2013: You don't have any comments yet and I haven't had time to listen to your talk or even read more than the topic of your post. So you can consider my response either ignorant or unbiased. I have seen the James B. Glattfelder and started a conversation on it, so that alone I am familiar with.

    I think people already realize that corporations (of which brands are nothing more than infantry divisions are to an entire army) are de facto government entities. Examples... Politics in America are significantly influenced by lobbyists and those lobbyists are largely those of Big Business. The most convincing, or realistic, science fiction I've involves the existence of corporatocracies. I think if you run our national ideologies through a sewer treatment plant to get rid off all the bullshit and you find that democracy has little, not the least, but little do with it and capitalism has the most to do with it.

    I'm more interested in hearing about what chances the out-dated system of bartering has in this environment of shifting currencies. There are a rising number of places where you can receive and pay for good and services with goods and services of your own, bypassing currency in all its forms.

    Government currencies do have the backing of national entities, whereas brand currencies are based on brands, which are nothing more than images, signs, concepts. To the public, its not institution versus corporation, its institution versus product.