MediaPost

Gord Hotchkiss and the Phenomenon of “WTF Tech”

Phillip Nones Advertising, Business, Marketing, Marketing Research, Sales, Social Commentary , , , , ,
Gord Hotchkiss

Occasionally I run across an opinion piece that’s absolutely letter-perfect in terms of what it’s communicating.

This time it’s a column by marketing über-specialist Gord Hotchkiss that appeared this week in MediaPost … and he hits all the right notes in a piece he’s headlined simply: WTF Tech.

Here is Hotchkiss’ piece in full:

WTF Tech

By Gord Hotchkiss , Featured Contributor, MediaPost

Do you need a Kuvée?

Wait. Don’t answer yet. Let me first tell you what a Kuvée is: It’s a $178 wine bottle that connects to WiFi.

Ok, let’s try again. Do you need a Kuvée?

Don’t bother answering. You don’t need a Kuvée.

No one needs a Kuvée. The earth has 7.2 billion people on it. Not one of them needs a Kuvée. That’s probably why the company is packing up its high-tech bottles and calling it a day.

A Kuvée is an example of WTF Tech. Hold that thought, because we’ll get back to that in a minute.

So, we’ve established that you don’t need a Kuvée. “But that’s not the point,” you might say. “It’s not whether I need a Kuvée. It’s whether I want a Kuvée.” Fair point. In our world of ostentatious consumerism, it’s not really about need — it’s about desire. And lord knows many of the most pretentious and entitled a**holes in the world are wine snobs.

But I have to believe that, buried deep in our lizard brain, there is still a tenuous link between wanting something and needing something. Drench it as we might in the best wine technology can serve, there still might be spark of practicality glowing in the gathering dark of our souls. But like I said, I know some real dickhead wine drinkers. So, who knows? Maybe Kuvée was just ahead of the curve.

And that brings us back to WTF tech. This defines the application of tech to a problem that doesn’t exist — simply because it’s tech. There is no practical reason why this tech ever needs to exist.

Besides the Kuvée, here are some other examples of WTF tech:

The Kérastase Hair Coach

This is a hairbrush with an Internet connection. Seriously. It has a microphone that “listens” while you brush your “hear,” as well as an accelerometer, gyroscope and other sensors. It’s supposed to save you from bruising your hair while you’re brushing it. It retails for “under $200.”

The Hushme Mask

This tech actually does solve a problem, but in a really stupid way. The problem is obnoxious jerks that insist on carrying on their phone conversation at the top of their lungs while sitting next to you. That’s a real problem, right? But here’s the stupid part. In order for this thing to work, you have to convince the guilty party to wear this Hannibal Lecter-like mask while they’re on the phone. Go ahead, buy one for $189 and give it a shot next time you run into a really loud tele-jerk. Let me know how it works out for you.

Denso Vacuum Shoes

“These boots are made for sucking, and that’s just what they’ll do.”

Finally, an invention that lets you shoe-ver your carpet. That’s right, the Japanese company Denso is working on a prototype of a shoe that vacuums as you walk, storing the dirt in a tiny box in the shoe’s sole. As a special bonus, they look just like a pair of circa 1975 Elton John Pinball Wizard boots.

When You’re a Hammer…

We live in a “tech for tech’s sake” time. When all the world is a high-tech hammer, everything begins to look like a low-tech nail. Each of these questionable gadgets had investors who believed in them. Both the Kuvée and the Hushme had successful crowd-funding campaigns. The Hair Coach and the Vacuum Shoes have corporate backing.

The dot-com bubble of 2000-2002 has just morphed into a bunch of broader-based — but no less ephemeral — bubbles.

Let me wrap up with a story. Some years ago, I was speaking at a conference and my panel was the last one of the day. After it wrapped, the moderator, a few of the other panelists and I decided to go out for dinner. One of my co-panelists suggested a restaurant he had done some programming work for.

When we got there, he showed us his brainchild. With much pomp and ceremony, our waiter delivered an iPad to the table. Our co-panelist took it and showed us how his company had set up the wine list as an app. Theoretically, you could scroll through descriptions and see what the suggested pairings were. I say theoretically, because none of that happened on this particular night.

Our moderator watched silently as the demonstration struggled through a series of glitches. Finally, he could stay silent no longer. “You know what else works, Dave? A sommelier,” he said. “When I’m paying this much for a dinner, I want to talk to a f*$@ng human.”

Sometimes, there’s just not an app for that.

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Does Gord Hotchkiss’ column resonate with you as it did me? Feel free to leave a comment for the benefit of other readers if you wish.

Blockchain Technology: Hype … or Hope?

Phillip Nones Business, Security , , , , , , ,

Recently I read a column in MediaPost by contributing writer Ted McConnell (The Block Chain [sic] Gang, 3/8/18) that seemed pretty wide of the mark in terms of some of its (negative) pronouncements about blockchain technology.

Not being an expert on the subject, I shared the column with my brother, Nelson Nones, who is a blockchain technology specialist, to get his “read” on the article’s POV.

Nelson cited four key areas where he disagreed with the positions of the column’s author – particularly in the fallacy of conflating blockchain technology – the system of keeping records which are impossible to falsify – with cryptocurrencies (systems for trading assets).

But the bigger aspect, Nelson pointed out, is that the MediaPost column reflects a general degree of negativity that has crept into the press recently about blockchain technology and its potential for solving business security challenges.  He noted that blockchain technology is in the midst of going through the various stages of Gartner’s well-known “hype cycle” – a model that charts the maturity, adoption and social application of emerging technologies.

Interested in learning more about this larger issue, I asked Nelson to expand on this aspect. Presented below is what he reported back to me.  His perspectives are interesting enough, I think, to share with others in the world of business.

Hyperbole All Over Again?

Most folks in the technology world – and many business professionals outside of it – are familiar with the “hype cycle.” It’s a branded, graphic representation of the maturity, adoption and social application of technologies from Gartner, Inc., a leading IT research outfit.

According to Gartner, the hype cycle progresses through five phases, starting with the Technology Trigger:

“A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.”

Next comes the Peak of Inflated Expectations, which implies that everyone is jumping on the bandwagon. But Gartner is a bit less sanguine:

“Early publicity produces a number of success stories — often accompanied by scores of failures. Some companies take action; most don’t.”

There follows a precipitous plunge into the Trough of Disillusionment.  Gartner says:

“Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investment continues only if the surviving providers improve their products to the satisfaction of early adopters.”

If the hype cycle is to be believed, the Trough of Disillusionment cannot be avoided; but from a technology provider’s perspective it seems a dreadful place to be.

With nowhere to go but up, emerging technologies begin to climb the Slope of Enlightenment. Gartner explains:

“More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.”

Finally, we ascend to the Plateau of Productivity. Gartner portrays a state of “nirvana” in which:

“Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off. If the technology has more than a niche market, then it will continue to grow.”

Gartner publishes dozens of these “hype cycles,” refreshing them every July or August. They mark the progression of specific technologies along the curve – as well as predicting the number of years to mainstream adoption.

Below is an infographic I’ve created which plots Gartner’s view for cloud computing overlaid by a plot of global public cloud computing revenues during that time, as reported by Forrester Research, another prominent industry observer.

Cloud Computing Hype Cycle

This infographic provides several interesting insights. For starters, cloud computing first appeared on Gartner’s radar in 2008. In hindsight that seems a little late — especially considering that Salesforce.com launched its first product all the way back in 2000. Amazon Web Services (AWS) first launched in 2002 and re-launched in 2006.

Perhaps Gartner was paying more attention to Microsoft, which announced Azure in 2008 but didn’t release it until 2010. Microsoft, Amazon, IBM and Salesforce are the top four providers today, holding ~57% of the public cloud computing market between them.

Cloud computing hit the peak of Gartner’s hype cycle just one year later, in 2009, but it lingered at or near the Peak of Inflated Expectations for three full years. All the while, Gartner was predicting mainstream adoption within 2 to 5 years. Indeed, they have made the same prediction for ten years in a row (although I would argue that cloud computing has already gained mainstream market adoption).

It also turns out that the Trough of Disillusionment isn’t quite the valley of despair that Gartner would have us believe. In fact, global public cloud revenues grew from $26 billion during 2011 to $114 billion during 2016 — roughly half the 64% compound annual growth rate (CAGR) during the Peak of Inflated Expectations, but a respectable 35% CAGR nonetheless.

Indeed, there’s no evidence here of waning market interest – nor did an industry shakeout occur. With the exception of IBM, the leading producers in 2008 remain the leading producers today.

All in all, it seems the hype curve significantly lagged the revenue curve during the plunge into the Trough of Disillusionment.

… Which brings us to blockchain technology. Just last month (February 2018), Gartner Analyst John Lovelock stated, “We are in the first phase of blockchain use, what I call the ‘irrational exuberance’ phase.”  The chart below illustrates shows how Gartner sees the “lay of the land” currently:

Blockchain Hype Cycle

This suggests that blockchain is at the Peak of Inflated Expectations, though it appeared ready to jump off a cliff into the Trough of Disillusionment in Gartner’s 2017 report for emerging technologies. (It wasn’t anywhere on Gartner’s radar before 2016.)

Notably, cryptocurrencies first appeared in 2014, just past the peak of the cycle, even though the first Bitcoin network was established in 2009. Blockchain is the distributed ledger which underpins cryptocurrencies and was invented at the same time.

It’s also interesting that Gartner doesn’t foresee mainstream adoption of blockchain for another 5 to 10 years. Lovelock reiterated that point in February, reporting that “Gartner does not expect large returns on blockchain until 2025.”

All the same, blockchain seems to be progressing through the curve at three times the pace of cloud computing. If cloud computing’s history is any guide, blockchain provider revenues are poised to outperform the hype curve and multiply into some truly serious money during the next five years.

It’s reasonable to think that blockchain has been passing through a phase of “irrational exuberance” lately, but it’s equally reasonable to believe that industry experts are overly cautious and a bit late to the table.

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So that’s one specialist’s view.  What are your thoughts on where we are with blockchain technology? Please share your perspectives with other readers here.

“I’m just so busy!” becomes the new social status signal.

Phillip Nones Economics, Marketing Research, Social Commentary , , , ,

In an era of almost constant “disruption” both socially and politically, it’s always interesting to hear the perspectives of people who devote their energies to thinking about the “larger implications.”

Author and MarComm über-thought leader Gord Hotchkiss is one of those individuals whose writings about the intersection of technology and human behavior are invariably interesting and thought-provoking.

His latest theory is no exception.

In a recent column published in MediaPost, Hotchkiss posits that the social status hierarchy of people may be moving away from “conspicuous consumption” and more towards the notion of “time” as the status symbol.

Hotchkiss writes:

“‘More stuff’ has been how we’ve determined social status for hundreds of years. In sociology, it’s called conspicuous consumption — a term coined by sociologist Thorstein Veblen.  It’s a signaling strategy that evolved in humans over our recorded history. 

 The more stuff we had — and the less we had to do to get that stuff — the more status we had. Just over 100 years ago, Veblen called those who significantly fulfilled these criteria the Leisure Class.”

Gord Hotchkiss

Looking at how social dynamics and social status are playing out today — at least in North America — Hotchkiss paints picture that is quite different from before:

“A recent study seems to indicate that we now associate ‘busy-ness’ with status. Here, it’s time, not stuff, that is the scarce commodity.  Social status signaling is more apt to involve complaining about how we never go on a vacation than about our ‘summer on the continent.'”

Interestingly, the very same research methodology that uncovered this set of attitudes in the United States was conducted in Italy as well. And there, the findings were exactly the opposite.

Perhaps it shouldn’t surprise us that in Italy, every employee is entitled to at least 32 days of PTO per year, whereas in the United States the minimum number of legally required paid holidays is … zero.

Looked at from another perspective, perhaps today’s social status indicators in North America are merely the Protestant Work Ethic in action, but updated to the 21st century.

Either way, the residents of Italy probably see it as a heck of a way to live …

The ad blocking phenomenon: It’s all about human nature.

Phillip Nones Advertising, Business, Marketing Communications, Marketing Research, Media, Media Consumption, Social Commentary , , , , , ,

noadThe rapid rise in consumer adoption of ad blocking software is threatening the traditional advertising model for publishers. For some, it seems like a topsy-turvy world where none of the old assumptions or the old rules apply.

But author and MarComm über-thought leader Gord Hotchkiss reminds us that the consumer behaviors we are witnesses are as old as the hills.

In a recent MediaPost column titled “Why Our Brains Are Blocking Ads,” Hotchkiss points out that the environment for online ads is vastly different from the environment where traditional advertising flourished for decades – primarily in magazines, newspapers and television.

Gord Hotchkiss
Gord Hotchkiss

He notes that in the past, the majority of people’s interaction with advertising was done while our brains were in “idling” mode – meaning that they had no specific task at hand. Instead, people were looking for something to capture their attention within a TV program, a newspaper or magazine article.

Hotchkiss contends that in such an environment, the brain is in an “accepting” state and thus is more open to advertising messages:

“We were looking for something interesting, we were primed to be in a positive frame of mind, and our brains could easily handle the contextual switches required to consider an ad and its message.”

Contrast this to the delivery of most digital advertising in today’s world, which is happening when people are in more of a “foraging” mode – involved in a task to find information and answers with our attention focused on that task.

In such an environment, advertising isn’t only a distraction; often, it’s a source of frustration. As Hotchkiss notes:

“The reason we’re blocking [digital] ads is that in the context those ads are being delivered, irrelevant ads are – quite literally – painful. Even relevant ads have a very high threshold to get over.”

Hotchkiss concludes that the rapid rise of ad blocking adoption isn’t about the technology per se.  It has to do with the hardwiring of our brains.  New technologies haven’t caused fundamental changes in human behavior – they’ve simply enabled new behaviors that weren’t an option before.

adbAs is becoming increasingly obvious, the implications for the advertising business are huge:  Ad blocking software is projected to lower digital ad revenues by more than $40 billion in 2016 alone, according to estimates by digital data research firm eMarketer.

Looking back on it, actually it seems like it was all so inevitable.

The “Millennial Effect” – and how it’s affecting the Boomer Generation.

Phillip Nones Advertising, Branding, Demographics, Marketing Communications, Marketing Research, Social Commentary , , , , , , ,

bm

In the world of marketing communications, it seems that confluence is in the air. This point was underscored recently by Eric Trow, a MediaPost columnist who is also vice present of strategic services at Pittsburgh, PA-based marketing communications firm Gatesman+Dave.

Trow’s main point is this:  Despite the big differences that marketers have traditionally noted between members of the Boomer Generation and their younger Millennial counterparts, today the two groups are becoming more similar than they are different.

In particular, Boomers are beginning to act more like Millennials.

Trow identifies a set of fundamental trending characteristics that underscore his belief:

  • Boomers increasingly want instant gratification – and related to that, they want convenience as well.
  • Boomers are embracing technology more every day, including being nearly as dependent on mobile devices as their younger counterparts.
  • Boomers connect online – with adults over the age of 65 now driving social media growth more than any other generation at the moment.
  • Boomers want control – and to that end, they do their research as well.
  • Boomers want to live healthier – with levels of interest in natural, healthy and environmentally responsible products rivaling those of younger age groups.
  • Boomers are more questioning of traditional authority – and not just because of the 2016 U.S. presidential election race, either.

Putting it all together, Trow concludes that he and many other Boomers could, in practice, be classified more accurately as “middle-aged Millennials.”

Speaking as someone who falls inside the Boomer generation age range, I concede many of Trow’s points.

But how about you?  Do they ring true to you as well?

Momentous milestone? U.S. advertising dips below 1% of GDP for the first time in living memory.

Phillip Nones Advertising, Business, Economics, Media, Media Consumption, Sales , , , , , , , ,

sdThe advertising industry has often been characterized as “boring.”  This 2014 analytical article from Bloomberg encapsulates the argument pretty succinctly.

Still, the “lay of the land” in the late 2000s and early 2010s represents a bit of a changeup from the previous decades of predictability.

During the period beginning the late 2000s when the “advertising recession” hit in an even bigger way than the overall U.S. economic recession, I’ve heard various industry insiders posit that there was more than merely a retrenchment happening due to overall economic conditions.

Beyond that, it was suggested that a migration was happening away from traditional advertising methods to more measurable ones.

Now we have more than just hunches to go on — and the results appear to be aligning with those suspicions.

The new evidence comes in the form of statistics released this week and reported on by MediaPost.

According to an analysis of ad spending trends published by Sanford Bernstein Research and Magna Global, for the first time in modern history U.S. advertising industry revenues have dropped below 1% of total U.S. Gross Domestic Product.

During the period 1999 to 2010, total advertising averaged 1.25% of GDP, but since then the percentage has stagnated or fallen. The 2014 total advertising estimate of $165 billion is 0.95% of GDP.  (The Bernstein/Magna research covers U.S. advertising revenues up through the year 2014.)

tbThe decline in advertising’s share of GDP is primarily due to the diminishing importance of two key traditional media categories: broadcast TV and cable TV.

Broadcast TV advertising’s annual revenue growth averaged around 3% per year between 1990 and 2010.  Since 2011, it’s been flat.

Cable TV has done somewhat better – but even there what had been around 12% growth per year has slowed to just a ~3% annual increase.

With such big baseline numbers for broadcast and cable TV, the behavior of these two broadcast categories have been key drivers of the advertising sector’s overall performance.

But we mustn’t forget another category that’s been performing pretty miserably of late: newspaper advertising.  It’s experienced a ~10% decline on a compound annual basis from 2010 to 2014.

That decline is even steeper than earlier projections had suggested.

Todd Juenger, a vice president and senior analyst at Sanford Bernstein, made a key takeaway observation about the newly published figures, noting:

“Our original piece theorized [that] advertising would recover to prior levels. Instead, it has remained deflated, suggesting the perhaps the Internet really has enabled marketers to eliminate waste.”

He’s right, of course.