In the striking Kate Winslet film, Little Children, there's a scene where her husband is questioned about his job at a marketing firm. "No," he corrects his interlocutor incredulously, "what I do isn't marketing; what I do is branding." Somewhere along the way, branding became a discipline and marketing started to look like it was going out of style. Branding has its roots in the 1930s at Proctor & Gamble but it's only in the last 20 years that I've seen it supplant "marketing" the new religion of international commerce.
So, what's the difference? 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. In service of this, those of us on the brand management side spend our days awash in SWOT analyses, BPM charts and mood boards. "What's the story behind the product?" you'll hear the branding mavens ask. For corporations, the implications of branding are enormous for this simple reason: a strong brand commands a premium in the marketplace. No wonder then that branding is entering the world of the biggest-ticket items.
Forbes, the eponymous business magazine, has announced that it is putting its name on commercial real estate. According to Commercial Property Executive, "The company has partnered with local developer Century Properties Group, Inc. to build the approximately 646,000-square-foot Forbes Media Tower in Makati, a suburb of Manila. The project is expected to be part of a network of Forbes Media Towers around the world."
For those of us in the real estate world, it's a tantalizing concept. While premium "Class A" buildings are sometimes branded under their anchor tenant (think of the Time Warner Center in New York), 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 and buildout. That, however, is changing. In a bid to attract the millennial, highly educated workers that successful companies seek, commercial buildings are increasingly integrating lifestyle elements like rooftop gardens, hangout spaces, restaurants and brand-name cafes. Traditional office configurations (meaning cubes and offices) which are, by some accounts, only occupied 48 percent of the time are giving way to shared "cool spaces." See for yourself.
The next logical step would be to brand this experience as something replicable across all buildings that carry that signature. 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 a strong 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.
"It's a great example of brand evolution, and the high level of importance that business values and culture are beginning to have globally," notes Karolyn Raphael, President of Winger Marketing, a leading publicity firm in Chicago. "When an iconic media group like Forbes extends its brand into a physical environment to embody its values of leadership and business authority, the developers are able to leverage these very marketable qualities to court premium tenants."
We asked branding guru, David Day of David Day | Associates, Inc., whether the Forbes name has a place in large-scale development and his thoughts are instructive. "It's likely that a consistent set of public perceptions exist about a brand like Forbes -- ranging from "trusted" to "wealthy" to "ultra-conservative". Extension of a brand like this one, particularly when so much brand equity and history is at play, should be carefully calculated in advance."
And that's where branding gets tricky: It is an intangible. It resides in the minds of consumers so its value is hard to estimate objectively or predict. Brands live within an ecosystem of affiliations. Certain brands cluster together revealing co-branding opportunities. In their book, The Infinite Asset, Sam Hill and Chris Lederer draw up a chart that links Miller High Life beer to the Newport Jazz Festival while Miller Lite clusters with NASCAR. Those brands share the same audience demographics and psychographics so they are mutually supportive and intuitively belong together. It will be interesting to see how this plays out in real estate. If Forbes can convince the more pragmatic commercial real estate tenant to lease space on the strength of its brand name, what type of tenant will work best within Forbes' brand constellation? Financial services, legal and consulting firms would seem to be a given, but will startup tenants or fashion companies find the brand too institutional? According to Day, a sub-brand strategy could potentially be the best solution (this is where companies market to a new audience under a brand extension like Marriot Courtyard or Pepsi One). "Forbes should never assume that their iconic brand will automatically appeal to or cluster with certain segments. For example, attracting a young technology firm might pose a considerable challenge. Forbes will have to conduct deep-dive research and formulate a relevant, intentional strategy to make successful connections with their targets." If one were advising the Forbes account, an effective sub-brand strategy might be to rollout a series of more unusual spaces concurrently with the Media Towers (like a series of converted warehouses or printing plants) with a new moniker to attract incubator tenants; you could call it the "Forbes Hanger" or "Forbes Cooler" so it keeps the institutional authority of Forbes, but adds its own patina of millennial vigor.
In the end, the Forbes strategy is an interesting one 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 Nordstroms or the design-conscious eccentricity of Target, our behavior is subtly altered by environmental 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.