How marketers can avoid falling victim to the hype cycleby
Hannah Grap delves into the risks and rewards of trend-chasing, offering insights on how brands can make wise investments that prioritise customer experience and long-term impact in an era of budget constraints and economic challenges.
During 2022, spending on developing the Metaverse more than doubled, racking up an estimated $12 billion to $14 billion of venture capital and private equity investment. But, with Meta reporting $20 billion in losses in this segment since Facebook rebranded, it bodes the question – was any of this investment worth it?
It can be easy for marketers to jump on the next trend in the hopes it’ll resonate with customers. But with new trends emerging every year—Generative AI being the latest—trying to stay current and move fast can require considerable investment, and risk.
Since the boom of social media back in 2009, few martech trends have truly embedded themselves. Oreo’s Dunk in the Dark campaign, that capitalised on a power cut at the 2013 Super Bowl, led to countless brands trying to leap on the latest trends. Anyone also remember the time when the Harlem Shake was everywhere? But it’s not just viral trends.
We’ve also seen whole platforms come and go and most recently technologies such as NFTs and the Metaverse have tempted brands into possibly short-term investments. Given this chequered history of trying to trend surf, why do marketers continue to gamble on short-lived trends that often fail to show true ROI?
Jumping on the hype cycle is only one small element of marketing and can in fact cause long-term damage. Pepsi was one of a number of brands that faced huge backlash after an attempt to demonstrate support around the Black Lives Matter movement in 2017. With reputations and sales on the line, how then can marketers avoid falling victim to the hype cycle and make wise investments that build their brands?
Marketing budgets face the squeeze
Marketers are having to work harder than ever to drive sales with consumers facing higher living costs and recent economic challenges. Inflationary pressures are also reducing marketing spend. If you look at the stats, only 29% of CMOs believe they have the necessary budget to fully execute their strategy.
Marketers are having to work harder than ever to drive sales with consumers facing higher living costs and recent economic challenges.
That’s why it’s critical that marketers are more strategic about where their money’s going. We need to make every decision count and when the next trend emerges, we must be sure the opportunity outweighs the risk. And it has to make sense for the brand.
There are plenty of examples of brands jumping on trends which have made a considerable positive difference. Nike is an exemplar at leading on a number of trends, from making a case for inclusion to moving away from celebrity endorsements. It often provides the gold standard for marketers, which can sometimes lead to other brands imitating in attempts to cash in on their success. But what works for one brand doesn’t always work for another. What it comes down to is what is authentic to their image and message.
At the same time, jumping on relevant trends can be expensive. John Lewis, famed for its perfectly in the moment Christmas ads often spend millions on its festive spots. However, with the retailer cutting its staff bonuses earlier this year, the financial sense of these investments has to be questioned.
Relying on platforms is risky for brands
With an estimated 4.9 billion people social media users, access to consumers for marketers is unparalleled.
However, while brands have profited massively from social, not all investments have paid off. For example, Samsung teamed up with Vine to develop features exclusive to its Galaxy K Zoom and worked with influencers to launch the device – a considerable investment from Samsung. But the subsequent closure of Vine, arguably made those efforts all but redundant. This served as a painful reminder that marketers are at the mercy of platforms that can (and do) fold at any moment.
In more recent years, we’ve seen the proliferation of VR/AR and the Metaverse. Brands across the board have tried to cash in. Some have been successful, such as Nike teaming up with Fortnite to boost user engagement, giving players the opportunity to hunt for its popular Air Force trainers. The company also acquired RTFKT, which generates NFTs and has sold millions of dollars in its virtual apparel through Swoosh, its Web3 marketplace.
While Nike presents the exceptional example of what can be achieved in the Metaverse, elsewhere, we’ve seen huge losses. Disney ended up eliminating its entire Metaverse division, and Horizon Worlds – Meta’s own virtual world – only paid its entire creator base a total of $470 revenue in its first year. Compare this with YouTube, whose most successful creators can take home up to $83,000.
However, with Apple recently unveiling its Vision Pro headset, metaverse experiences could receive a shot in the arm. Early commenters are understandably sceptical about user uptake of the $3,499 headset, while testers have suggested that it’s uncomfortable to wear and can cause motion sickness. This isn’t the first time Apple has come up against cynics of its newer products – there was initial doubt consumers would take up the Apple Watch. However, in the first quarter of the year, it made up 43% of wearables shipped worldwide. Given Apple’s track record, Vision Pro could repeat this success.
What should marketers take away from each of these trends? They need to consider them with caution. While these tactics can help boost sales and drive conversation around a brand, the impact is often short-lived. Users move on and brands are back to where they started. Marketers are feeling the impact too, many say having to stay on top of trends is leaving them feeling burnt out.
Sometimes taking it back to the basics and focusing on the customer experience is where brands can find the most value.
That’s not to say there isn’t a place for jumping on trends. As we’ve seen, for the right brands, like Nike, it can shape their brand image long term. However, making real, long term impact means taking a considered approach and questioning whether it’s the right path for the business and the brand. Sometimes taking it back to the basics and focusing on the customer experience is where brands can find the most value.
Put the customer first
Before brands chase the next trend, getting the fundamentals right is key. At a very basic level, brands need to ensure they’re delivering customers personalised, engaging and relevant content. Getting this foundation in place will build loyalty long term by delivering what customers want.
With the current economic climate, brands need to be thoughtful about what they’re putting budgets towards. Jumping on the latest trends may be attractive, but it’s important to assess the long-term value and your brand strategy. The very essence of a great customer experience is knowing what they want and delivering for them in a meaningful way. While following the hype cycle can create bursts of excitement, the risk of it falling on deaf ears is high. Often, it’s getting the basics right where brands find the most value.