Trylon Communications  - August 2003
       

When Hype Drives Decisions

Back in the Internet glory days of the late ‘90s, investment decisions and business strategies were dictated by headlines. Venture capitalists threw dollars at business plans that were dominated by buzzwords instead of logic, and entire businesses were built on rubric. Today’s executives would be well served to apply a measure of caution to making decisions based upon media coverage of new technologies and business fashions.

In a world of instant news and media craving for the next “hot story,” we are seeing more cases of runaway stories than ever. While the Internet craze created new magazines, new businesses, new investment portfolios and even a “new economy,” once the hype died, so did many of these businesses and ideas.

Witness the incredible investment in broadband – companies spending literally billions of dollars building capacity that today sits unused, with many of these companies either broke or out of business completely.

Gartner Group has proposed a theory of the “hype cycle of emerging technology,” which states that media coverage of a new technology fuels interest, which feeds more media coverage , which leads to inflated expectations. This is followed by general disillusion when the technology doesn’t live up to the hype - leading to a loss of interest, declining stock values and finally a return to normal expectations. At this point, both media coverage and the technology become stable and more mainstream.

Outside the business world, the same thing is happening. Today’s example can be Kobe Bryant, yesterday’s O.J. or Martha Stewart. Media hype is inexorable and can roll over even the most well-thought business strategy if given a chance.

Swedish researchers Tomas Uppgard and Roger Wallis of the Royal Institute of Technology in Stockholm put this theory to a test, analyzing the frequency of keywords in the media against businesses connected to those keywords. It turns out that the dotcom bombs rode a media frenzy to unsustainable heights, while less ballyhooed technology companies attained a steady growth pattern. The researchers believe it may be possible to develop a hype detector that can correlate media hype with actual technological advances.

Blogging is a possible new tool for businesses to gain grassroots exposure (Click here to see our article "Pitching Blogs".) This topic is gaining popularity in the press, and with each new mention more companies and executives are adding Weblogs to their business strategies.

Wireless is getting huge headlines. McDonalds, for instance, has instituted wi-fi – once the exclusive province of Starbucks. We are approaching a chicken-and-egg point, one in which it is hard to decide whether business events are driving media coverage or vice versa.

It is interesting to note that while the hype of the Internet has died, the number of people using it, the amount of business being done over it, and the opportunities provided by it are larger than ever.

When developing your next PR strategy, consider the effects of media hype – not only on your public image and brand perception, but also on your long-term business objectives.