Imaginary Money

I keep seeing stories about the diet coke/mentos story. You've probably heard about it by now; a couple of people discovered that sweets make fizzy drinks fizz, and the best combination is apparently Diet Coke and Mentos mints (apparently the fruit ones work just as well, as does Caffeine-free Diet Coke- but it does have to be Diet Coke.) A video was made by a couple of guys in white coats of a display made with lots of mentos, lots of diet coke and lots and lots of fizz. It's been seen by millions of people, and it isn't showing any signs of going away.

There was something about a bible school using it in science lessons. It's been said elsewhere that the science behind it has been explained. (Related to the bible school? I don't know.)

Apparently Mentos have said that the video (and subsequent buzz) got them about $10 million worth of marketing.

Here's the thing: that's not $10 million of video, or sales, or advertising space. Nobody asked Mentos if they wanted it. That money never got spent. It never got earnt. It never actually existed. It's imaginary money.

Back at the start of the decade was the famous dotcom crash. Lots of people had lots of great ideas about what they could do with the internet, and lots of people who had money wanted to invest in them (real money), so when their great ideas came to fruition, they could reap the rewards (imaginary money.) Because of the laws of supply and demand, the value of these companies shot up, so lots of people went home with big cheques and lots of money. (Real money.)

The problem was, nobody noticed that the value of these companies was actually in imaginary money. So when people started looking for the cash and realising that it had all been spent, the market crashed. All that value (imaginary money) vanished, and lots of people were left looking very silly.

Right now, we're in a similar situation. There's all this new space online; social networking is supposedly this billion dollar industry- Facebook is valued at $15 billion, and yet nobody seems sure where these billions of dollars actually are- because they're all imaginary. Online video is the next big thing- the Nielsen//Netratings figures for the BBC iPlayer's audience looks remarkably similar to Facebook's audience this time last year, so there's more areas for money to be made.

Except it's all imaginary money.

That's where Social Networking and Online Video are right now. Everyone is worrying about how to monetize them; to turn the billions of page views, minutes, engagement or whatever that people are constantly chasing after in traditional media into actual cash. Facebook have discovered that while people will buy virtual gifts for their friends to put on their bit of web space, it's not going to justify it's valuation. But all that engagement and dwell time isn't translating to good old clicks.

The thing about clicks is that they can easily be turned into real money. A click apparently means that someone looked at something and decided it was interesting enough to be worth some sort of action. Looking at an advert and thinking it's interesting, compelling or convincing enough to go and buy an expensive car isn't actually worth too much- especially if you didn't know that your mind was being made up at the time.

Engagement is harder to value. Sure, if people are engaged and spending time on a page, then they are more likely to take in an advertising message- but if that message is a distraction from (or worse, getting in the way of) what they are trying to do, then it's not good news for the advertiser— and display advertising has the potential to be pretty damn distracting.

"Monetize" is the big word that gets thrown around with these new media and platforms. Perhaps "realize" would be a better word; how to turn all that perceived value into something of real value? Turning a piece of screen space into a click, which turns into a sale is reaping real rewards. How do we "realize" when that screen space turns into something else- brand awareness, affinity, intention to purchase etc.?

While investors are worrying about how to turn the imaginary money that's floating around in these new media into real money, it's advertisers that should be taking the centre stage. Because it's up to marketers and advertisers to make Social Networking and Internet Television actually worth that amount of imaginary money- not necessarily by buying advertising space or investing in technologies and partnerships, but by using them in the best way possible- to provide services to their audience. But that's a service to the customers- not a service to their sales team.

Of course, that might mean giving clients thousands of pounds worth of marketing without thousands of pounds of billing, and it's going to be very difficult to bill for a percentage of that imaginary money.

Maybe the future of these platforms relies on using them as a part of successful integrated cross-media campaigns- that might not be a bad thing for the agencies that aren't purely digital, as the ability to understand digital platforms and how they can be used to add value to what's being sold can be a stronger selling point than what can be done with it on it's own. But those who are chasing the imaginary billions might find themselves in a much weaker position.

The alternative path for things to take is that consumers pay for everything they see and use online, presumably on some sort of subscription basis. Who wants to see that?