Riding the Digital Fundraising Hype Cycle

Earlier this month technology research company Gartner released their latest Hype Cycle for Emerging Technologies report.

The Hype Cycle is a very interesting way of considering the evolution of new technologies as regards their hard business benefits, taking into account the common stages of over enthusiasm and hype, followed by negative PR and disillusionment, leading – for some technologies at least – to the realisation of mass market business benefits.

I first started using it as a strategic planning tool for digital fundraising back in 2009, when E-book Readers were right at the Peak of Inflated Expectations (just after Amazon launched its first Kindle), Microblogging was heading down into the Trough of Disillusionment (as the mass market struggled to get to grips with Twitter), and Web 2.0 was heading-up the Slope of Enlightenment. You can see a flashback to the digital world in 2009 in my August 09 blog post about that year’s Hype Cycle here.

Looking at this year’s Hype Cycle (summarised in the chart above) there are a number of technologies with clear relevance to digital fundraising: Gamification is headed for the Peak of Inflated Expectations; Augmented Reality and NFC Payments are just over the Peak and slipping into the Trough; and Media Tablets (think iPad or Galaxy Tab) are fast heading into Enlightenment. Meanwhile, despite the great work done by those involved in the SecondLife Relay for Life annual fundraiser (raising $350k for the American Cancer Society in 2012), Virtual Worlds remains pretty well stuck in the Trough of Disillusionment.

For a quick reference to what Gartner’s full list of technologies mean (including such wonders as the Internet of Things) you can check their online IT Glossary here.

While the main Gartner report is excellent food for thought, I find a more useful strategic planning exercise is to apply the Hype Cycle concept specifically to the application of digital technologies in fundraising. In a digital world where it is all to easy to be attracted by the bells and whistles of new technologies which have yet to prove real fundraising value, simply mapping-out where you feel different opportunities lie on the Hype Cycle curve can be a handy way to help you focus on those areas most likely to generate returns within defined timescales.

Every organisation is different with regard to its vision for and experience of digital fundraising, as well as the audiences they might engage with and resources available for implementation, and as a result each might come-up with a slightly different placement of technologies. However, here’s a rough generic Digital Fundraising Hype Cycle I’ve drawn-up listing some of the key opportunities with us today and coming-up over the horizon to help get your thinking started…


2009 Hype Cycle report – is Twitter on the slide or headed for enlightenment?

Hype Cycle 2009

Back in May last year I wrote about the ‘Hype Cycle’ devised by technology research company Gartner to illustrate the adoption, maturity, and business application of specific technologies, and I specifically considered where on the cycle various online fundraising initiatives lay.

So with the release of the the 2009 Hype Cycle Report, I was interested to compare where things are now (see the chart above) compared to where they were last year (see the chart below).

Hype Cycle 2008

There are certainly some interesting shifts here from the perspective of the digital fundraiser.

For starters, Microblogging has swept over the ‘Peak of Inflated Expectations’ and on towards the ‘Trough of Disillusionment’ in just one year – thanks essentially to the phenomenal rise of Twitter. However, this doesn’t mean that all the Twitter nay-sayers have been proved correct – because if Twitter adoption and application continues at this pace then it could just as well whizz up the ‘Slope of Enlightenment’ towards the ‘Plateau of Productivity’ by this time next year. It certainly seems to be moving towards mainstream adoption far faster than Gartner predicted in 2008.

Web 2.0 can be seen to have started this migration towards general acceptance already, moving from the ‘Trough’ in 2008 to the start of the ‘Slope’ now. Driven forwards by its increasingly widespread adoption, but at the same time probably held back by the challenge of effectively monitising the massive interest in Web 2.0 applications. Likewise, Corporate Blogging can be seen to have moved on at much the pace predicted by Gartner.

Noticeably lagging behind in the progress stakes are Public Virtual Worlds, like SecondLife, which fell rapidly from an high ‘Peak of Expectations’ back in 2007 (anyone else remember the Pet Shop Boys ‘playing’ at Secondfest?) and now seem stuck down in the ‘Trough of Disillusionment’ with minimal progress over the last year. I guess that makes last month’s Second Life Relay for Life, raising over $270,000 for the American Cancer Society, an even more notable success.

You can read more about Gartner’s Hype Cycle here.

2009 Second Life Relay for Life exceeds $270,000 in donations

As mentioned earlier, last weekend saw the 2009 Relay for Life fundraising event in the virtual world Second Life – in aid of the American Cancer Society.

Hopes were high in advance of the event that they would surpass the $210k raised through the event last year – and sure enough they have. At the latest count they were up to $270k, and apparently there is still money coming-in.

If you’re new to the whole idea of online fundraising in a ‘virtual world’, then take a look at the promotional video above. And if you know of anyone else making fundraising work in Second Life then do leave a comment to let me know – because the ACS, with their incredibly dedicated Second Life community, is the only one that I’ve seen over the last few years.

Second Life Relay for Life 2009 virtual fundraising event – this weekend

Since the heady days of Summer 2007 when we had virtual Wimbledon and The Guardian backed a whole virtual music festival, the virtual world Second Life seems generally to have slipped down the online hypecycle from the ‘Peak of Inflated Expectations’ to the ‘Trough of Disillusionment’.

However, one charity that is still actively establishing its presence there is the American Cancer Society. Led by an incredibly dedicated Second Life community of volunteers, the ACS has grown its Second Life activities substantially since its first virtual Relay for Life fundraising event in 2005 – raising over $215,000 through its 2008 event and now hoping to surpass this with its 2009 event being held this Saturday, July 18th.

Apparently they’ve got over 125 teams and 2,000 participants already registered for the 24-hour virtual relay event – and from past years it should be a fun event to log-on to watch.

Alternately, if wandering a little 3d avatar of yourself amongst crowds of virtual fundraisers isn’t your idea of a fun day out – then you can get a good feel for the event, and other ACS activity in Second Life, from the video above.

Second Life Relay For Life 2008 doubles previous record, raising over $210k

Bit of late news here I’m afraid. Due to the last couple of months being pretty busy with my moving jobs I missed this year’s Second Life Relay for Life, held on July 19th and 20th in support of the American Cancer Society. However, the great news is that they more than doubled the $100,000 achieved last year, raising a grand total of over $210,000 through the combined efforts of 85 teams made-up of 2,230 avatars – plus all the volunteer designers and other organisers.

This is the largest amount yet raised by a single fundraising campaign within the virtual world and represents a wonderful example of what can be achieved when a specialist community becomes enthused with an innovative opportunity to raise money for a great cause.

For a feel of what a sponsored run within a virtual online world looks like, take a look at the video above compiled by Jovana Qinan.

22% of broadband users expected to be active in virtual worlds within ten years

Here in London we’re experiencing a rare combination of happenings this week – it’s the start of the Wimbledon Tennis Championships AND the sun is shining!

In contrast, this time last year I remember floating about in Second Life visiting IBM’s virtual tennis championships and chatting online to the developers about how they were able to replicate the real world happenings at Wimbledon in Second Life – including the rain.

That same week, The Guardian was promoting SecondFest its three day Second Life virtual music festival and pretty well every other week throughout the summer some new ‘virtual world first’ was being announced – including several from nonprofits.

One year on, when you stop to look back, you realise just how much Second Life hype there was and just how it has died down as the whole subject of virtual worlds has slipped into the Hype Cycle’s Trough of Disillusionment.

However, while not so frequently in the headlines, serious consideration of the commercial potential for virtual worlds has continued. One of the most interesting items I’ve seen on this in recent months is a report released by the consultancy Strategy Analytics, entitled ‘Market Forecasts for Virtual World Experiences – from Habbo Hotel to Second Life and Beyond’

Their market forecast predicts that over the next ten years some 22% of broadband users world-wide will have registered with one or more virtual worlds. In commercial terms, they believe this will equate to a market of some one billion virtual world consumers worth around $8 billion of ‘in-world’ revenue.

While acknowledging that less than 10% of virtual world registrants currently become active users, they expect this to rise to 27% by 2017 as the technology improves and new virtual worlds emerge providing more social and educational applications.

Now, the $8 billion market value does sound like a lot of money (let’s face it – it is a lot of money) but to put it in context this is actually less than the $10.44 billion estimated to have been given online to US charities last year.

Call me a geek, but I remain convinced that we will see virtual worlds becoming an increasingly important online fundraising environment over the next decade. However, these figures do help frame just where they might lie in the future fundraising mix. If the Strategy Analytics valuation turns-out to be accurate then it doesn’t look like virtual worlds will be delivering the lions share of your online income in 2017.

Online Fundraising and the Hype Cycle

The other day I got chatting with a colleague about the ‘Hype Cycle’, used by technology consultancy Gartner to illustrate the adoption of technologies through the lifecycle of hype, disappointment and (in some cases) the eventual delivery of practical benefits. As shown in the chart above, the Hype Cycle comprises 5 phases:

1. Technology Trigger: the breakthrough, product launch, or other event that generates significant press and interest.

2. Peak of Inflated Expectations: A frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

3. Trough of Disillusionment: Technologies fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and technology.

4. Slope of Enlightenment: Although the press may have stopped covering the technology, some businesses continue through the ‘slope of enlightenment’ and experiment to understand the benefits and practical application of the technology.

5. Plateau of Productivity: A technology reaches the ‘Plateau of productivity’ as its benefits become widely distributed and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

In the light of all of the current discussion about the potential for Social Media (aka Web 2.0) to deliver real benefits for fundraisers (aka Community Fundraising 2.0) this got me thinking about just where different aspects of online fundraising are on the Hype Cycle – a useful thing to consider if you’re in the process of planning any mid to long-term online fundraising activity.

On the ascendancy between technology trigger and peak of expectations we have things like Twitter – the micro-blogging social network that is generating a load of discussion at the moment but not, as far as I can tell, as yet being linked to any significant fundraising activity.

Just past the peak and on the brink of tipping into the trough of disillusionment there is fundraising in virtual worlds. I still remain convinced that at some point in the future some form of 3D virtual environments will become commonplace for everyday transactions like retail and fundraising. However, despite the interest in the American Cancer Society Second Life Relay for Life and various other Second Life non-profit initiatives last year, I think we’ve got quite a long way to go in the meantime.

Then, some place between the peak of expectations, the trough of disillusionment, and the slope of enlightenment (depending on who you ask) we have fundraising widgets and social networks. Anyone still needing convincing of the fundraising opportunity offered by the latter need only take a look at the Hitwise data from last year which shows how social networks are taking over from email as the primary drivers of traffic to key sponsored event fundraising site justgiving.com. There’s still a lot of testing to be done, but I don’t think it’ll be too long before widgets and social networks arrive on the plateau of productivity and begin to significantly out-perform the ‘old school’ of email as the drivers of online fundraising income.