Posts Tagged ‘Forbes’

Branding Real Estate

Friday, May 23rd, 2014

We’ve all heard the term “branding” but for most of us it’s seemed like just another name for the familiar business of marketing. Some people think it’s the packaging around a product – the logos and colors; others think it’s the sum total of the advertising that promotes a company. Both are wrong. Interbrand defines brands as “a living business asset, brought to life across all touchpoints which, if properly managed creates identification, differentiation and value. The key word there is “living”.   At its fundamental level, branding involves giving an inanimate object –a company, service or product — human properties. It allows you to relate to it at a human level. While marketing pushes a product to market (through the 4 P’s of Product, Price, Promotion and Place), branding is what creates its emotional appeal, its narrative.” A brand is what makes you insist on an Apple iPad as opposed to the well-reviewed Barnes & Noble Nook HD; a brand makes you covet an Audi S4 over the highly-rated Hyundai Genesis. A brand is a mist of memories, associations and aspirations that corporations spend millions of dollars trying to understand.

Modern brand management has its roots in the 1930s at Proctor & Gamble but it’s only in the last 20 years that we’ve seen it become the preeminent creed of effective marketers. For corporations, the implications of branding are enormous for this simple reason: a strong brand commands a premium in the marketplace (consider that the Ipad can command a price of more than $100 more than the Kindle Fire which is lighter, has better resolution, more RAM and a better camera). No wonder then that branding is entering the world of the biggest-ticket items.

Branding is still evolving in the real estate industry. We’ve seen companies like CBRE, JLL, and Hines do a fine job of conveying their scope, financial strength and expertise but rarely has it been applied at the product level. This is changing. One of the early adopters is Forbes, the eponymous business magazine, which will now put its name on commercial real estate. It has chosen the Philippines as the site for the world’s first Forbes-branded office high-rise — a partnership with a local developer. The 646,000-square-foot Forbes Media Tower will be located in the suburb of Manila. The project is expected to be part of a network of Forbes Media Towers around the world. It’s a tantalizing concept. While premium Class A buildings are sometimes branded under their anchor tenant (like the Time Warner Center in New York) or their vanity name (think of the Rookery in Chicago), the vast majority of the nation’s commercial real estate stock isn’t; it’s viewed as a commodity separable only by practical concerns like location, technology, lease rate, incentives and buildout. Clearly, it is an idea worth exploring: the Forbes brand has equity — a hundred year old company that is associated with hard news on “business, investing, technology, entrepreneurship, leadership and affluent lifestyles”. According to Omniture, forbes.com reaches 47 million monthly unique visitors, while Forbes Magazine, Forbes Asia and Forbes Europe attract a global audience of more than 5 million readers. It would appear to be the ideal brand to extend into the realm of premium office space. Plus, the concept of the branded tower has its precedents (albeit mostly in residential real estate) — most famously with the Trump organization which has licensed its brand across a vast portfolio of real estate. One report has the value of the Trump brand alone at $3 billion.

So, how do you brand? We start with a full-scale brand audit of an asset, looking at its perception in the market (including it’s positioning, identity, personality, reputation) by talking to brokers, CREs, investors; then we look at competing buildings to see where we stand in relation to them. Once we have a very detailed snapshot of the asset, we undertake the actual branding process which starts with a SWOT analysis (and maybe a PEST analysis to see where the market as a whole is going) and proceeds to lay out all the aspects of the brand that will make it personal and unique. Think of it as an onion with layers – a vision, mission, positioning statement, personality, promise, values. The deepest layer is the brand idea or unique selling proposition. It is the DNA of a company of a product or company and motivates all of its messaging. To clarify, here are the most famous USPs in history:

Jaguar – styling
Mercedes – Engineering
Volvo — safety
FedEx – overnight
McDonald’s – Kids
Burger King — grownups

This simple idea is the spark that fires the look and feel of the brand, its expression in the market and the target audience. Think of Volvo and how every ad you see in some way references safety.

Case Study
Most recently, The Alter Group wanted to rebrand one of its signature buildings in downtown Chicago, Dearborn Plaza. Built in 1999, the 385,000 SF office building in downtown Chicago’s River North neighborhood was known across the industry as the Chicago headquarters of Google and winner of numerous architecture prizes. With the Google space becoming available in 2015, Alter knew that they needed to brand the asset as the best tech space in the best location in the city. However, when the Alter marketing team did their audit of the asset, they found that the brand didn’t reflect the status of the building.

Firstly, in our research we found that everybody knew the building as 20 West Kinzie and not Dearborn Plaza. Secondly, the brand expression , including its logo, signage and messaging didn’t convey what was special about the asset – the fact that it had a Michelin-rated restaurant and a boutique hotel in the building and was located in a spot with more nightclubs, restaurants and art galleries than anywhere in the city. After an exhaustive study , we re-engineered the brand under the Unique Selling Proposition of “Primetime Office” to convey the prime space and the notion that the building remained vibrant well into the night when the area became the center of the city’s nightlife. As part of this we introduced a new logo, new brand colors, and monument signage that still gestured at the building’s unique architectural lines. To cap it off, the building’s new web portal is one of the most content-rich sites ever done for an individual building with a look that evokes the most stylish tech companies like instagram, pinterest and tumblr.

Looking ahead, we are now seeing the second major revolution in marketing after branding – namely social media. Make no mistake, it is a sea change. And the biggest part of this is the internet and social media. Consider that 93% of B2B customers now begin the buying process with an online search and 48% participate in industry conversations online. In 2011 there was a study of 600 chief executive officers and 70 percent of them stated that they thought their chief marketing officer was on the wrong track. The reason is because the nature of the sales process has changed entirely. Customers now make 60 percent of their buying decision online before they even engage with your company. The reason for that is because we have moved from the old model of marketing—institutional marketing and the broadcast model, where the company would create a slick campaign and beautiful marketing materials and push that to the audience. This was effectively a one-way conversation. Now, we have moved from that owned content model to earned content which is about engagement.

For 20 West Kinzie, we have to go beyond branding to engaging with tech firms through twitter, LinkedIn and other channels and through very targeted banner and PPC ads. We produce meaningful content through our blog and podcasts and then combine that with presentations at conferences and through the press. You have to be useful and you have to be authentic in this marketing space. The new watchword is interaction not interruption.

In the end, branding real estate , whether it’s the Forbes or the 20 West Kinzie strategy is powerful and a natural extension of the branded environments we’ve become used to in the retail and hospitality industry. Whether it’s the marbleized no-hassle restraint of Nordstrom’s or the design-conscious eccentricity of Target, our energy and attitude is subtly altered by branding. We feel different in these spaces by virtue of the brand. Forbes is a pioneer in trying to do this within office space. It will be a great test case for the influence of the b-word.

Tom Silva is Principal of Silva Brand, a strategic branding agency based in downtown Chicago. Previously Senior Vice President of Marketing & Strategy for The Alter Group, he has branded major corporate campuses and downtown high rises, including 111 West Illinois, a major high-tech office tower in River North (www.111willinois.com) and 625 West Adams (www.625westadams.com), a 490,000 SF, 20-story office building. His writing on branding and business strategy has been featured by Reuters and in his regular column for the Huffington Post.

 

Tom Silva
Principal
Silva Brand

Follow the March Madness Money

Monday, April 4th, 2011

March Madness is so popular among American sports fans that even President Barack Obama was featured on ESPN filling out his brackets. The President, who predicted a Men’s Final Four of Duke, Kansas, Ohio State and Pittsburgh, said “One thing I wanted to make sure is that viewers who are filling out their brackets — this is a great tradition, we have fun every year doing it.”

According to Investopedia, like so many things in American popular culture, March Madness is an exercise in follow the money. “While many consider the annual NCAA Division I Men’s Basketball tournament to be one of the greatest tournaments in sports, there’s more to the madness than just the teams battling for their place in the Final Four.  Like all great sporting events, the tournament has its share of economic impacts on a variety of levels.”

For example, the CBS television network controlled the March Madness airwaves for years; in 2011 a landmark deal was made to allow Time Warner’s Turner to split the rights for the next 14 years at a cost of approximately $10.8 billion.  “Along with the steep price tag comes the revenues from broadcasting the tournament both on television and via other media outlets,” Investopedia said.  “Last year, CBS is estimated to have raked in about $620 million from TV advertising alone, while revenues from ‘non-traditional’ sources were up 20 percent.  Even with more people watching their favorite television shows in non-traditional ways, sporting events have still managed to keep live viewership growing, and there’s nothing quite like the nail-biting thrills of a last-second jumper.”

Then, there are the schools.  According to Forbes, “The NCAA distributes money from their media contracts to Division I conferences based on their performance in the Division I Men’s Basketball Championship over a six-year rolling period.  Independent institutions receive what’s called a ‘full unit share’ for every game they play in the tournament over the same rolling six-year period.  The basketball fund payments are sent to conferences in mid-April each year, and then conferences allocate the money as they see fit.  Some conferences equally split the revenue among all conference schools, while some provide a disproportionate share to the teams that were actually responsible for the ‘unit creation.’  One ‘unit’ is awarded to a conference for each game a member school participates in, except the championship game.  In 2009-10, each ‘basketball unit’ was approximately $222,206 for a total $167.1 million distribution.  The 2010-11 season was supposed to be the last year of the old TV contract, where CBS was slated to spend $710 million for media rights.  Based on this figure, the NCAA estimated that each ‘basketball unit’ would be roughly $239,664 for a total $180.5 million distribution.”

Sports tourism is another way that March Madness stimulates the economy.  Because the games are played in various locations across the country, teams and their fans spend money on hotels and restaurant meals, a positive economic impact on the host cities.  The biggest winner of 2011 is expected to be Houston, where estimates have direct spending by March Madness fans hitting $100 million.  Denver, Cleveland and New Orleans are also expected to reap significant economic benefits.

March Madness also offers Americans an opportunity to gamble.  According to Sportsbook.com, approximately $75 million was bet in Las Vegas on the tournament.  Office pools totaled more than $3 billion, with the cost of lost productivity estimated to be approximately $1.8 billion.

Where to Cut: Public Union Benefits or Defense?

Wednesday, March 16th, 2011

Wisconsin Governor Scott Walker’s war on public-sector unions is being brought to the national stage by Senator Tom Coburn (R-OK). Coburn challenged members of Congress following the release of an exhaustive study by the Government Accountability Office that found many overlapping and duplicate programs from education to defense that cost taxpayers billions of dollars each year.  The study found 82 federal programs to improve teacher quality, 47 for job training and employment, as well as hundreds of military clinics that could gain from consolidating administrative, management and clinical functions.

According to Coburn, a physician who some call “Dr. No” in the Senate because he places holds on legislation that he considers to be unconstitutional, “Government employees, although they’re fabulous and they overall do a great job, they produce no net economic benefit in our country.  Matter of fact, they produce a net negative economic benefit.  So if you take the drag off the economy by nonproductive implementation of capital what you’re going to see is that capital is then going to be put to use in something that is productive.  We’re not talking about letting go hundreds and thousands of employees — we’re talking about streamlining things.  Even if it were hundreds of thousands of employees, if we’re not borrowing another $300 billion additional next year because we streamlined some programs, that has some tremendous benefit to the economy as well.”

In particular, Coburn challenges federal job-training programs. “Job training is wasteful.  We put ‘help wanted’ on our government website and we’re getting people who have been through these programs who say they are a total joke and a total waste of time.  I want a job-training program that actually trains somebody to do something that they get a job for.  Why should we have 47 different separate job training programs?  Nobody understands them all.  If it’s a federal role — which I question – -then any job-training program ought to be designed so that you can measure its effectiveness.  None of the 47 has any metrics on it to measure effectiveness.”

Senator Coburn’s position could have an impact on his popularity, much as Wisconsin’s Scott Walker’s controversial stance on public-employee unions has lowered his ratings. A Rasmussen poll reveals that almost 60 percent of likely Wisconsin voters now disapprove of their governor’s performance, with 48 percent strongly disapproving.  The poll also finds that the state’s public school teachers are very popular with their fellow Badgers.  With 77 percent of those polled holding a high opinion of their educators, it is not particularly surprising that only 32 percent among households with children in the public school system approve of the governor’s performance.

The Giving Pledge Encourages Billionaires to Share Their Wealth

Thursday, July 1st, 2010

The Giving Pledge asks billionaires to donate 50 percent of their wealth to charity.  Two of the nation’s leading billionaire philanthropists are joining forces to encourage others to donate as much as half of their wealth to charities.  Microsoft founder Bill Gates and Berkshire Hathaway Chairman Warren Buffett are teaming to create the Giving Pledge, “an effort to invite the wealthiest individuals and families in America to commit to giving the majority of their wealth to the philanthropic causes and charitable organizations of their choice either during their lifetime or after their death.”

According to Patty Stonesifer, who is advising Gates and Buffett on the Giving Pledge, four additional families – real estate and construction’s Eli Broad, venture capitalist John Doerr, media entrepreneur Gerry Lenfest and former Cisco Systems chairman John Morgridge – are already on board.  Buffett, who has already pledged to donate 99 percent of his wealth to the Bill and Melinda Gates Foundation, said “At the latest, the proceeds from all of my Berkshire shares will be expended for philanthropic purposes by 10 years after my estate is settled.  Nothing will go to endowments.  I want the money spent on current needs,” according to Buffett.  Forbes magazine ranks Gates as the world’s second richest man with $53 billion and Buffett as third with $47 billion.  The United States is home to 403 billionaires.

The Giving Pledge is not accepting money itself.  Rather, it is asking billionaires to commit to giving their money to charity.  Although the campaign specifically targets billionaires, the Giving Pledge is “inspired by the example set by millions of Americans who give generously (and often at great personal sacrifice) to make the world a better place.”