Social Currency

Social Currency

This article defines the concept of social currency from an economic perspective.


3 - 12


Social Studies, Economics


Erich Joachimsthaler

Photo: Erich Joachimsthalter captured against a blurred cityscape backdrop.

Photograph by the Vivaldi Group
Photo: Erich Joachimsthalter captured against a blurred cityscape backdrop.
Selected text level

Erich Joachimsthaler is a business and sales expert. In 2009, he defined the idea of "social currency." In his words, it is the amount of success that an individual or business has in convincing customers to feel connected to particular brands. It is now an important economic concept. Economics is the science of how people buy goods, trade, and use money.

People often talk about their favorite or least favorite brands every day. A brand is a business' public image. For example, Nike's brand involves its name, its commercials, and what it posts to Twitter. That all affects how people perceive the company.

A New Way To Measure Wealth

In the 1980s, the French philosopher Pierre Bourdieu proposed the idea called social capital. It is a kind of wealth. Some have it more than others. It is not just based on money, though.

Each person has a network of family, friends, and other people around them. Depending on who you know, you often have more or less access to resources such as jobs. That is like having capital, or wealth, but it is actually social capital. Similar to cash, social capital can be earned, spent, and passed on.

Another of Bourdieu's ideas is called cultural capital. Bourdieu described cultural capital as a kind of status currency. A person's status is their standing in society. To shape it, people will seek out certain products. They want cool products to show off their social status. Cultural capital can help explain why, for example, people wait in line to buy new smartphone models or fancy name-brand shoes.

Joachimsthaler's definition of social currency updated Bourdieu's. Smartphones and social media have given branded companies a new ability. They can now target specific people they hope to reach.

In the past, advertising was more limited. Advertisers had to figure out what kinds of people read certain magazines and watched particular shows. Now, a large number of customers use sites like Facebook and Instagram. Brands are able to interact with social-media users online every day. Customers even talk about their products with friends and family. Companies want to understand how people communicate about their brands. The idea of social currency helps answer this question.

As with cash, not everyone has or can have social currency. This means that social currency is scarce, or limited. Scarcity is a basic concept in economics. Usually, the more a good is scarce, the more valuable it is.

Companies that want to gain social currency need to compete for consumers' attention on websites. Hundreds of other companies also want that attention. In this case, attention is a limited resource.

A Goal of Going Viral

It's easy to measure social currency of brands. You can just check how many people follow them on Facebook or Instagram. There are many ways to make this number go up. Sometimes companies tell their followers that their product is exclusive. In other words, they're saying the product is scarce.

Luxury brands do this. Diamond watches, for example, are shown as expensive and hard to find. Companies hope this will make more people want the product. Since the diamond watch is exclusive, the company says, purchasing it means the customer has more cultural capital. This only happens if buyers use the product in view of others, though. So, buyers are more likely to share information about those products. In this way, such brands are easily able to build social currency and become more desirable.

Smart brands sometimes try to make their advertisements "go viral." That means the ads are shared by both the company's followers and by people outside those communities. What makes people share viral content seems to be related to social currency. Just as people like to talk about being part of exclusive communities, they also like to share other things that make them look good. Say businesses are able to create video ads that their users want to share because it makes them look hip or smart. If so, brands can expand their communities. Hopefully, for them, this can bring more buyers.

Fast Fact

In today’s landscape, influencers play a crucial role in shaping social currency. For instance, when a food blogger with over 3 million followers recommends a restaurant or a fashion influencer is spotted with a new designer bag, it validates and amplifies the appeal of the experiences or products, thereby enhancing the social currency for both the influencer and the brands involved.

Media Credits

The audio, illustrations, photos, and videos are credited beneath the media asset, except for promotional images, which generally link to another page that contains the media credit. The Rights Holder for media is the person or group credited.

Tyson Brown, National Geographic Society
National Geographic Society
Production Managers
Gina Borgia, National Geographic Society
Jeanna Sullivan, National Geographic Society
Program Specialists
Sarah Appleton, National Geographic Society, National Geographic Society
Margot Willis, National Geographic Society
Clint Parks
Roza Kavak
Last Updated

October 19, 2023

For information on user permissions, please read our Terms of Service. If you have questions about how to cite anything on our website in your project or classroom presentation, please contact your teacher. They will best know the preferred format. When you reach out to them, you will need the page title, URL, and the date you accessed the resource.


If a media asset is downloadable, a download button appears in the corner of the media viewer. If no button appears, you cannot download or save the media.


Text on this page is printable and can be used according to our Terms of Service.


Any interactives on this page can only be played while you are visiting our website. You cannot download interactives.