With the annual hype fest known as the Consumer Electronics Show (CES) finishing up last week, now seems an instructive time to reflect on the hype cycle around technology and trends. Many mistaken predictions all point to the imperfection and impermanence of the prediction business. For tech trends in particular, such as those being hatched last week at CES, it’s a perilous endeavor with few (if any) sure-fire winners and even fewer all-knowing prognosticators.

1. 1The Hype Cycle: 2014 Edition
The Hype Cycle:
2014 Edition
Frank H. Jurden & Mike Lundgren

2. 2The Hype Cycle: 2014 Edition
If you are looking for
the next big thing,
look no further.
All of the following — according to the experts — are going to
be simply huge:
• Lehman Brothers is a sure-fire investment; its outsized
profits are growing so fast that most believe the
company will soon surpass its larger competitors
• VOIP is “ready for prime time” and will displace
traditional landline phones
• Dell’s super affordable Digital Jukebox is going to give
Apple’s iPod some serious competition (finally!)
Being Dead Wrong
If any of those predictions sound a bit off or simply dated,
they’re both. All those predictions are now a decade old, from
that bygone era called 2004.
Those predictions are worth revisiting because all three were
the opinions of experts at the time, and yet all three turned
out to be dead wrong: Lehman’s ignominious bankruptcy is
now legendary; Vonage, the VOIP poster child, nearly went
bankrupt too in the intervening years; and Dell never made
a dent in Apple, ultimately withdrawing from the music
business (and from the public markets as well).
With the annual hype fest known as the Consumer
Electronics Show (CES) finishing up last week, now seems
an instructive time to reflect on the hype cycle around
technology and trends.
Those mistaken predictions all point to the imperfection and
impermanence of the prediction business. For tech trends in
particular, such as those being hatched last week at CES, it’s
a perilous endeavor with few (if any) sure-fire winners and
even fewer all-knowing prognosticators.
A Market for Predictions
The risk of being proven dead wrong doesn’t keep
prognosticators from their calling. Each year around this
time, we are treated to a growing number of reports on what’s
next from experts and amateurs alike.
It has all the elements of a growing trend, this picking trends
thing.
Intuitively, we know most of those guesses are wrong, but
they still get published. And every year, we, along with
our agency colleagues, read them dutifully. But what irks
us is the absence of consequences for being wrong. Setting
aside investors who are punished by market forces, tech
prognosticators rarely reconcile their own past efforts; the
The Hype Cycle:
2014 Edition
Frank H. Jurden & Mike Lundgren
January 2014

3. 3The Hype Cycle: 2014 Edition
public, with equal rarity, doesn’t hold them accountable when
the inevitable inaccuracies crop up.
At least with formal prediction markets such as Intrade, The
Hollywood Stock Exchange and Inkling, being wrong is
costly, albeit in virtual currency. Think you know who will
win the 2014 Australian Open? Put your (virtual) money
where your mouse is. Know when Rob Ford will leave the
mayorship of Toronto? If you’re confident, tell the world here.
Unlike mainstream futurecasting, prediction markets require
participants to “pay for” their predictions with home-spun
virtual currency. Obvious outcomes are expensive, whereas
improbable outcomes are relatively cheap; these values
correspond to the probabilities of the events in question, and
change in real time as the market evolves.
Being wrong on a regular basis means you’re quickly out
of cash and out of the game (improving the signal-to-noise
ratio in the market). Being a consistently good forecaster
means you can amass an impressive portfolio (Inkling’s top
performer has a portfolio worth 1.2 billion “inklings”).
The Wisdom of The Crowd
But what makes prediction markets more than “gamified
guessing” is their accuracy in predicting the future.
Experts have reliably been proven to be less accurate than
the aggregate guesses of amateurs, and this fact means
prediction markets have practical applications.
In the commercial sector, companies such as GE, Chevron
and CNN, among others, have employed prediction markets
because they offer organizations tangible benefits not
available through traditional forecasting methods:
“Prediction markets have been employed to help
combat a leading factor in bad [corporate] decision-
making: the isolation of executives from the views
and insights of the company’s workforce... The net
result [of isolation] is that executives may only
receive one-sided information, and flawed and
unproductive decisions can result” (Strumpf, 2009).
So prediction markets help managers see through the fog
by harnessing the wisdom of the crowd, and further, the
markets attenuate the inaccuracy, ignorance or bravado in
any one individual’s view by harnessing market dynamics.
A real world application: Software giant Microsoft has used
internal prediction markets since 2003 to forecast product
and accounting activities. Market participants forecast bug
counts, release schedules, corporate earnings per share
and margin contribution, among other business-critical
metrics. In a report, Henry Berg of Microsoft described these
predictions as “uncannily accurate.”
Back to Future(casting)
To be fair, not all 2004 predictions were dead wrong. In fact,
many authorities rightly anticipated the massive upside for
Bluetooth and ubiquitous Wi-Fi, among other then-emerging
tech trends.
So, too, with the current crop of 2014 trends that bubbled up
from CES 2014. We should read the predictions of our future
with a healthy dose of skepticism, but we still can’t resist the
guilty pleasure of reading the lists and hearing the latest
buzz coming from the big events.
So, skepticism notwithstanding, here is our take on four
trends worth watching (from sources worth trusting).
1. Google on Automotive Tech: Uber and Self-
Driving Cars.
Yes, you read that right: Google and automotive technology.
Long a quiet backwater of the tech sector, the automotive
sector is now showing all kinds of life.
First among the most notable innovations is the beautiful
simplicity of Uber, the upstart location-based car service. It’s
simple on the surface — an app on your smartphone conveys
your position to a pool of potential drivers, and voilà!
Perfect supply-meets-demand solution bridging the offline
and online worlds and conveniently getting you to your
destination. Your online account handles the money and tip,
so you can just jump out and get on with your day. We love
it. Google’s venture arm put in over $250 million in Uber in
2013.

4. 4The Hype Cycle: 2014 Edition
The question on everybody’s mind is why a search
giant would show interest in the automotive sector at
all. Its interest seems more than a passing fancy: Google
announced at CES 2014 its Open Automotive Alliance, a
partnership involving automakers Honda, GM and other
major brands along with tech companies to bring the
Android operating system to their lineups starting in 2014.
Google’s interest also stretches far beyond today’s cars, and
it is actively working on self-driving cars. It’s not hard to
imagine a future that combines its on-demand car service
and self-driving cars tied together in an app ecosystem. Ray
Kurzweil, director of engineering at Google and futurist,
believes:
“Within ten years [self-driving cars] will be
ubiquitous. Humans have a fairly narrow field of
view, these cars have sensors, both visual and laser,
and artificial intelligence to be able to assess what’s
going on in their environment. Ultimately these cars
will communicate with each other and coordinate
their movements. You also won’t need to own a
car, there’ll be a pool of them circulating, and you’ll
just call one from your phone when you need it”
(Kurzweil, 2013).
2. The Battle for the Digital Wallet
Innovation in how people pay for goods and services
has been a topic of discussion for many years, but the
momentum seems to be accelerating.
Hardware maker Square really made strides in
democratizing the acceptance of credit, and PayPal quickly
responded with hardware of its own. If you’re going to a
farmers market or a rock festival in the coming year, expect
to see those devices in nearly every vendor’s booth.
NFC, the much-touted wireless technology that would
transform your smartphone into a credit card and free you
from plastic, has failed to gain traction. Only about 100,000
NFC readers are in use, according to Gartner. The exclusion
of NFC from the iPhone 5 announcement was for some a
blow to the technology’s potential, but many observers think
the fingerprint-recognition features of the new Apple phones
are more than just convenience but part of a longer-term
strategy to ensure device security for when NFC-enabled
payments break out big time.
This space is crowded with tech innovators, credit card
companies, merchant-services providers and the like. No
single solution seems to be able to cover the complex range
of consumer interactions associated with the humble wallet:
Mobile payments, offers and coupons, and loyalty and
rewards.
One player emerged this year with an innovative take on
simplifying your wallet. Rather than reinvent the payment
experience, Coin is, simply, a credit card “aggregator” that
stores all your card data on a single card-sized device.
Simple, smart and intuitive.
3. McKinsey on Mobile and Wearables
(For more, see: McKinsey Disruptive Technologies Report)
It is a foregone conclusion that mobile devices are now
mainstream in the industrial West; mobile internet traffic
will exceed desktop traffic within 12 months at current
growth rates. Mobile devices (and the app economy that
feeds them) have exploded power and utility, so much so that
handhelds and tablets are a viable alternative to desktops
for many. It’s no surprise, then, that device sales will outpace
desktop sales within the next 12 months.

5. 5The Hype Cycle: 2014 Edition
But such ubiquity breeds a kind of contempt: Mobile
products are so mainstream that new announcements are
now greeted with a collective “meh” as with the iPhone 5S
announcement this year.
Yet some innovation and excitement is still to be found.
Whereas the uber-geeky Google Glass project has had its 15
minutes of fame, more mainstream-friendly activity trackers
such as Jawbone’s Up, the Nike+ FuelBand and the like
suggest a positive future for wearables for the non-techie
crowd.
But geeks like us seem to be reserving all our energies for
smart watches, devices that augment a smartphone so we
don’t have to spend time poking around on the device’s
screen. Samsung, Sony and newcomer Pebble all released
devices in this category (and in Pebble’s case, an app store),
and tech observers are waiting breathlessly for a rumored
Apple “iWatch.”
Implications for Brands & Consumers:
Mobile devices have transformed the traditional
offline retail experience and created the phenomenon
of “showrooming.” Wearables and smartwatches will
further exaggerate these trends; when combined with
technologies like iBeacon, the shopping experience
will change in dramatic ways. Devices that are
location-aware, always on and in hand/on your
wrist enable brands to engage customers in highly
personalized and contextualized ways.
4. Forrester on Big Data and Automation
(For more, see: Forrester’s Predictions 2014 Report)
In truth, accessing massive quantities of consumer and
sales data have never been a problem for marketers. What
has stymied marketers in the past is marshalling all the
disparate sources — creaky enterprise systems, TV ratings
reports, web traffic logs, tracking studies, ad serving systems,
app usage data, customer service logs, social media streams,
etc. — into a usable, unified state.
Especially painful for multichannel marketers, this friction
impeded efforts to tie together customer behaviors from
online and offline channels into a holistic, real-time (and
hence predictive) view of the customer.
Increasingly, the tools and platforms in this space are
maturing, bringing together the ability to deliver truly
end-to-end customer engagement. This maturation
process involves the unification of web analytics, content
management, enterprise-systems integration and predictive
analytics into what Forrester calls “Customer Experience
Management (CXM).”
So big data as a trend is only relevant to the extent that we
can use it for practical ends. With maturing capabilities,
“A virtuous circle will be created as marketers
develop smarter, more-relevant programs across
their mix by incorporating data-driven insights into
their planning and then use the new robust data
they get out of those programs to inform their future
plans.” (Forrester, December 30, 2013)
Further, as we master the data torrents, the workflows of
contextualized brand interactions will support continued
strong growth in automation (e.g., Marketo and Eloqua), in
retargeting (like Twitter’s recent retargeting announcement)
and in programmatic media buying more generally.
Implications for Brands & Consumers:
Clearly, the darker side of big data came to light
in 2013. While many consumers, myself among
them, blithely trade away privacy for convenience
and services, we were all painfully reminded of
the perilous state of privacy in a connected world
via reports like Target’s recent data fiasco and the
revelation of state-sponsored snooping.
Are brands underestimating the post-Edward
Snowden Era implications of big data? The hype
over the potential for big data to deliver precision
targeting, personalization and omnichannel
omnipotence has reached near religious fervor. While
marketing technologists acknowledge the tension
between privacy and identity exists, most largely
ignore the implications in their efforts.
How long will it be before a modern-day “Datagate”
happens and inspires a Sarbanes-Oxley-level

6. 6The Hype Cycle: 2014 Edition
Frank H. Jurden
Managing Director, Strategic Planning
VML
fjurden@vml.com
Frank’s background spans both the academic and agency
worlds. He’s been with VML since 2005 and has also served
as Lecturer in Marketing at the Graduate School of Business
at the University of Kansas in 2004 where he teaches in the
MBA program. Prior to his appointment at VML, He has
served as Managing Partner for consulting firm Hudson
+ Duke Communications, as Director of Research and
Planning for ad agency Barkley, Evergreen & Partners, and as
Visiting Scholar in Quantitative Methods at the University of
Michigan. Along with Mike Lundgren, Frank serves as co-
organizer of TEDxKC, the largest independent TEDx event
in the world.
Mike Lundgren
Partner, Director of Innovation Strategy
VML
mlundgren@vml.com
Mike brings 25 years of high-tech management, marketing
and product development experience to VML. He has
provided insights, strategy and thought leadership on
emerging trends, disruptive technologies and innovation
for clients as varied as Microsoft, Dell, Ford, Vanguard
and Colgate-Palmolive. Prior to VML, Mike worked for GE,
Apple and Iomega, and he has served as an independent
consultant for entertainment and technology companies and
multiplatinum recording artists. Since 2009 Mike has been
active in the TED community and is the founding curator of
TEDxKC, one of the largest independent TED events in the
world. Mike is also a patent holder in the area of e-commerce
and digital rights management. He graduated from Missouri
State University.
response? Sure, the concept of “good” big data is
palatable to everyone (as when scientists share data
via the International Cancer Genome Consortium
and the like). But the lines between customer insight
and creepy breach of privacy are very, very poorly
understood in the marketing world.
With all this new power comes a new set of
responsibilities that brands and agencies will have to
learn.
A solid argument can be made for the concept that
“data wants to be free” and full transparency could
actually be more utopian than dystopian. But until
such attitudes prevail, brands beware. Marketers
should fully embrace the big data movement;
however, they should do so with an equally
aggressive effort to develop and teach a corporate
ethos around the use of technology and data while
revisiting governance and policy around privacy and
tracking.
See more at: http://www.vml.com/news-and-trends/articles/
hype-cycle-2014-edition#sthash.tf7FEeWv.dpuf