A Tale Of Two Case Studies: Amazon, Pepsi, and Tangible Intangibles

2009 ended and 2010 began with two huge headlines for the mainstream adoption of digital and social media.

Amazon’s headline: on Christmas Day, for the first time ever, Amazon sold more e-books for the Kindle than physical books.

Pepsi’s headline: Pepsi decided to invest its $20 million Super Bowl spend into Social Media instead.

Case 1: A Problem With Intangibles

When articles reported on Amazon’s milestone, they translated ‘physical books’ into ‘real books’. This translation highlights one of the biggest barriers to generating revenue through digital media – the perception that physical equates to real, and non-physical equates to non-real.

For most people, it’s ‘digital books or real books’, as it is ‘digital life or real life.’ The problem is not only that digital goods are intangible – people also believe, somewhat subconsciously, that digital goods are not real.

The key insight: iTunes and the Kindle make the intangible tangible. They make the non-real, real. They provide a trusted channel with catalogued, visible, ownable digital goods. Loosely downloadable PDFs from a website will not work with the mainstream – it’s not a tangible intangible.

Case 2: Brand Association

Pepsi’s bet raises a deeper question about authenticity. When a brand funds community projects, is it authentic? Only when the platform is the product. Churches mowing lawns are being what they are – church. But what has Pepsi got to do with social change? When the platform is not the product, authenticity becomes an issue.