It’s a Virtual Currency! It’s an Old-Fashioned Marketing Campaign! It’s Both!

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Amazon announced today that it will soon launch Amazon Coins, a new “virtual currency” that customers can use to buy stuff on their Kindles. They’re planning to give away tens of millions of dollars worth of Amazon Coins. Matt Yglesias comments:

Each Amazon coin is worth one cent and can be redeemed by Kindle store vendors. In macroeconomic terms, you can think of this as a program of aggressive monetary expansion to stimulate the Kindle Fire economy. By delivering a helicopter drop of Amazon Coins to Kindle owners, Amazon is hoping to boost consumption of Kindle Fire content. Not for the sake of increasing consumption as such, but because higher expected demand for Kindle Fire content should stimulate investment by third-party firms in the development of Kindle content. In that sense, the monetary stimulus isn’t merely a short-term expedient to make Kindle owners happy. It’s part of a longer-term strategy to strengthen the overall Kindle platform (and increase its differentiation from generic Android) by exploiting the positive feedback dynamic between market size, app quality and quantity, and desirability of joining the market.

Matt writes an economics blog, so he talks about this in economic terms, something that Amazon is encouraging by calling their coins “virtual currency.” My background is in marketing, so I say bravo to Amazon for a clever marketing stunt. Amazon Coins are no more a virtual currency than frequent flyer miles or the coupons that you clip out of the Sunday paper, but it sure sounds cool to call it that! After all, virtual currencies are considered sort of a hot topic these days.

Alternatively, of course, you could say that both frequent flyer miles and newspaper coupons are virtual currencies too and always have been. It’s just that nobody’s been smart enough to call them that. And I suppose that’s true. Either way, Amazon isn’t really doing anything new here. They’re just pouring a bunch of marketing dollars into a launch promotion for one of their new products. If it works, every new marketing campaign that involves building up points or credits or loyalty bucks or whatnot will suddenly become the latest virtual currency. I expect the primary result of this will be a bubble in doctoral dissertations on closed economies on the internet.

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with The Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate