Has the Web 2.0 Hype Cycle Kicked In?

I'm as bullish as anybody about the growth of social media and the impact it will have on the relationship between brands and consumers. But this study makes me think "Bubble 2.0" with its conclusion that 81% of marketers will spend as much or more on Conversational Marketing than traditional marketing by 2012. This suggests an order-of-magnitude faster growth than Interactive marketing and TV advertising has seen in the last decade...

Let me start by saying Cymfony is a member of SNCR and fully support their work. And I'm friends with Joseph Jaffe and think he is one of the leading thinkers in the dramatic changes marketing is experiencing.

That said, this study smacks of the hype cycle "peak of inflated expectations". I use these as reference points:

• Interactive marketing has been around for over 13 years, and it is $18.4 billion this year, according to Forrester's latest interactive marketing sizing report and will be only $61 billion by 2012. (I say "only" because Bob Coen at Universal McCann pegs 2006 advertising spending at $285 billion.)
• If you date DVR's to TiVo's launch in 1999, they have been around 8 years, and the penetration is only 17%, with only about 5% of viewing is on DVR (don't remember where I saw that stat...). Sure, the TV business is quaking in their boots but the 2007 Upfront was stronger than ever -- about a 5% overall increase and CPM increases up to 8 - 9%, despite repeated predictions that it must collapse in the face of declining audiences and rising CPMs.

In other words, if after 13 years, interactive marketing is less than 10% of total marketing, how is conversational marketing going to get to 50% in 5 years? Same question if DVRs haven't demolished the TV advertising business after 7 years?

As an ex-analyst, I sympathize with anyone trying to predict the future of radical changes like this. I've had my share of "irrational exuberance" reports like the December 1998 "1999 will be the year of rich media ads" and my wish-to-be-forgotten January 2001 classic "Online Advertising Eclipsed" (which predicted rapid growth for online ads but even more rapid growth for a broader definition of interactive marketing just as we entered the collapse of Bubble 1.0; I quickly revised it in October 2001 with "Online Advertising Retrenches"). I fear Joseph may have fallen into the trap I fell into of 1) believing what the marketers he interviewed told him and that 2) he only spoke to early adopter conversational/social media/Web 2.0 marketers who have all good intentions that haven't yet hit the reality of corporate conservatism.

The one thing I learned is that no matter how fast technology changes, consumers and marketers don't change nearly as quickly.

My fear is that numbers like this strain the credibility of the industry such that they may do more to reinforce reluctant execs' view that this is another bubble than they do to galvanize them to change.

Is there an irreversible change that will shift money out of traditional, one-way, broadcast marketing? Yes.

Is the future of marketing conversing with customers, listening to their needs/complaints/suggestions and adapting products and messages to align with them? Absolutely.

Will marketers learn to love giving control to their brand advocates and increase their use of widgets and allow consumers to take and spread an array of brand assets as they see fit? No doubt in my mind.

But none of this will happen overnight. Living through one "Trough of Disillusionment" is enough for my career. Let's all try to skip it and keep the marketing world climbing the "Slope of Enlightenment".