The "Hype Cycle": Innovations And The 5 Stages Of Attention

20.03.2017 Daniel Kostyra

Media coverage always has to be up-to-date and relevant. In the competition of media representatives, however, these basic journalistic principles degenerate quite frequently. If that’s the case, it's all about the headlines and attracting attention. Popular topics for this are technological innovations. This is especially true when they are associated with (supposedly) disruptive business models. Long before their maturity, they are driven by Blogs & Co., and are, to an extent, loaded with unrealistic expectations. The technology consulting company Gartner developed the so-called "Hype Cycle" (image) in 1995 in order to make this observation easier and to simplify commerce for decision-makers. This cycle describes the five stages of attention and expectations that an innovation traditionally goes through before it establishes itself (or disappears) on the market:



Stage 1: Technological Trigger

The innovation is announced. At this point, however, still as a technological breakthrough there is no market-ready product.

Stage 2: Peak of Inflated Expectations

In a kind of lyrical enthusiasm, the media designs unrealistic application possibilities, although only prototypes usually exist thus far. During this phase, at the latest, decision-makers in companies are drawn to the innovation and are confronted with an artificially designed miracle landscape. This often leads to investments and budget shifts. Consultants, agencies and other external service providers are pushed to implement these new ideas right away, before others do.

Stage 3: Trough of Disillusionment

As a result of the non-fulfillment of utopian optimism, coverage of the new technology dies down. Disillusion follows.

Stage 4: Slope of Enlightenment

Far from additional media attention, a realistic awareness arises of the limits and benefits of the innovation.

Stage 5: Plateau of Productivity

Ultimately, there is the stage during which surviving technologies and business models become mass-effective. Market-ready products prove themselves under rational expectations. Here, innovations reappear in the minds of decision-makers, who initially abandoned them in the Trough of Disappointment.


Beacon Technology as an Example

A great example of this is the Beacon technology, a transmitter-receiver principle based on Bluetooth for localization and communication in enclosed spaces, e.g. between a product and the smartphone of a customer. In 2013, the "Technological Trigger" happened when Apple presented its iBeacons. As early as the beginning of 2014, start-ups and business media leaped at this topic and predicted the revolution of location-based and personalized marketing. As a result, Shopkick started its loyalty app based on Beacon technology at the end of 2014, with which customers could collect points for entering participating stores (e.g. Galeria Kaufhof, H&M, Media Markt). At the beginning of 2017, Shopkick already withdrew from the German market. The original (exaggerated) expectations of this technology could not be fulfilled, at least not for the marketing area. At the same time, Beacons are very successful in the logistics sector. An example: The logistics company CHEP uses beacons in quarter pallets to facilitate the tracking of Mondelez promotions in German real markets. To this end, in 2016, the ECR Award for Corporate Cooperation was awarded.

Do not celebrate trends too soon, but don’t give up on them too quick either  

Therefore, decision-makers should always look at new technologies and trends rationally and provide unbiased cost-benefit calculations before taking action. This is true for both, big and small innovations. Some hypes, like Pokémon Go, last only a few months, while others have more potential - like Big Data or Chatbots. On the other hand, one should keep an eye on innovations and trends following the media hype (in the Trough of Disillusionment), as many of them experience a renaissance under more realistic circumstances.