Is Mobile Currency Really Making Cash Obsolete?

Apple's 'Passbook' Has Given Rise to a Cottage Industry of Payments Startups

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The value of the dollar bill is not derived from its material composition; it's merely a symbol that represents a cultural understanding of value. Howard Rheingold explained the overlapping origins of language and currency.

The origins of writing actually came from accounting. The symbols of agricultural civilizations enabled these large empires to emerge for the first time, with hierarchies and work gangs, and irrigation and large-scale building projects. The people who kept track of things, the priests or the rulers, began to make deals. If you deposited 50 bushels of wheat in a granary, they would get you 50 little clay tokens and make it into an envelope.

In the example above, it was the interaction that defined the value of the clay tokens, and from this interaction a culture of currency was born—a culture in which all members understood the meaning of the value symbol. As technology triggers new interactions that create value, a new culture of currency is forming amongst brands and consumers—this culture is built around the device that has become the remote control for the entire world and it is more than mere functional replacement for cash.

The cultural currency of loyalty
The widespread adoption of mobile phones (particularly smartphones) has brought about tremendous new prospects for loyalty marketers. While the mobile device increasingly possesses the ability to serve as a payment mechanism, the impact that the mobile device can have on currency goes much deeper. A slew of startups have taken the notion of loyalty to new heights. In many ways, the cultural currency of loyalty is becoming a material way to subsidize purchases as opposed to older loyalty programs in which the accumulation of points lead to the largely infrequent redemption of rewards. The recent advancements in mobile loyalty programs create an opportunity for a "cashless" value exchange -- an exchange that can be meaningful for both brand and consumer.

The recent launch of iOS6 and Passbook is wrought with opportunity for relationships built on new cultures of currency. Passbook has given rise to a cottage industry. This is a testament to both the power of Apple and more importantly, the importance of the mobile device as a loyalty conduit. Here are a few companies that have already built products within the Passbook ecosystem:

The cultural currency of attention
Traditional thought puts attention, or awareness, atop the traditional consumer funnel. While modern thought has moved this construct into the realm of myth, the mobile device provides exciting new ways to offer real value for consumer attention in a more personalized, real-time manner.

Mobile games reward network Kiip has made strides towards effective monetization of mobile gaming. There is an imbalance between time spent playing mobile games and advertising dollars spent on in-game initiatives. This disproportion can be attributed to lack of opportunities to offer consumers something of value for their attention during an experience that can potentially be obstructed by advertising. In addition to numerous innovations in the in-game advertising space, late last year, Kiip launched Swarm, aiming to offer in-game value at scale. The product rewards consumers for games they are playing and invites them to participate with friends. The real time "swarm" in this product would not be possible on other media devices.

Kiip Swarm from kiip on Vimeo.

Incidentally, rewards earned in Kiip can be stored in Passbook.

The cultural currency of collaboration
Companies such as American Express have explored co-marketing via the mobile device—still, the tip of the iceberg has hardly been scratched. The mobile device offers tremendous opportunity for brands to illicit real-time sharing. Amex Sync rewards consumers for helping "spread the word" by offering discounts for retweeting merchant offers while American Express benefits by being able to help support their merchant partners. With platforms such as Foursquare and Instagram still in their relative infancy, there are countless untapped opportunities for brands to excite their fans to the degree that they are willing to tell their friends something on the brand's behalf.

A second portion of the currency of collaboration is co-innovation -- a concept packed with possibility and ripe for exploration. Co-innovation via the mobile device enables brands to illicit real time feedback consumers. Brands can offer rewards for such rich and timely insights. A great example of co-innovation can be seen in mapping app, Waze. When a user leaves Waze running on their device while driving, she is automatically contributing real-time traffic information back to the company. As a result, Waze has the most robust source of real-time traffic information—a database that would be virtually impossible by any other means. Though this is not an example of brand integration, it should be used as a model for marketers.

As mobile ad networks flood mobile devices with disruptive advertising (banners), new models for engaging customers are creating new means for brands to interact with their customers. Many of these approaches promise to be far more effective for advertisers and are more appreciated by consumers. The various approaches discussed in this article are fully opt-in and transparent and therefore have far more potential to be effective. Much like a real world marketplace, mobile cultures of currency possess the capacity to positively change the face of modern commerce.

Adam Broitman is chief creative strategist at Something Massive, which acquired Cir.cus, the agency he co-founded, in March. Broitman has worked in a variety of roles at Digitas, Morpheus Media and Crayon.
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