By Melissa Hancock
Why high-concept advertising and impressive plastic models may no longer be enough to attract investors.
It was the first time Hashim Sergie had been to Cityscape, and probably the last. "I just didn't understand what was going on. There was a lot of great stuff there, some amazing projects, but I couldn't figure out which one I should invest my money in. I suppose you could say none of them had that X-factor."
Sergie is not alone in the growing number of property investors wanting to see something more than fancy models and stands. "We want to know what's really behind these ideas, what living in these places will really be like," he says.
That may all be about to change. The quiet revolution is being led by Arabian Concept Developments founder Zena Malek, the Lebanese architect earlier this year voted one of the world's 100 most influential Arabs. Her new interactive style brochure, which takes prospective buyers on a journey through the whole development process, has got the likes of Nakheel and Emaar thinking again about how best to market their projects. Change, it appears, is coming and coming fast.
"Designing a model and expecting a project to sell out in 48 hours is no longer the order of the day," says Bassem Berbari, general manager of marketing, Nakheel. "Today we are exploring different strategies and sales channels by which we can reach our target consumers and convert as many as possible into leads. Building awareness, however of the project is no longer enough for generating leads - we need to build knowledge of what the project is about because the customer is becoming increasingly choosy and sophisticated these days. We all know that there is more supply coming onto the market and that really puts the customer in the driving seat."
Berbari says that as the market matures, he has noticed that the customers have much stronger objectives in terms of what they're looking for. For example, they might be looking to flip property or to achieve certain rental yields. "Consequently, market research is a big thing for us and we're starting to turn that more and more into a strategic pillar of our marketing approach." By understanding what buyers are looking for, Berbari points out that Nakheel can market itself effectively so as to build preference towards its projects rather than its competitors'. "Both the internet and telemarketing provide rich media touch-points which enable us to give much more in-depth information about our projects than is possible through traditional advertising touch-points."
Meanwhile, Malek has tried to overcome the lack of information dispensed to the end-user through designing what she calls an ‘interactive brochure' for her latest project - the Golf Walk, to be built by Hydra Properties, which was launched at Cityscape Abu Dhabi last week.
"It's a brochure made up of pop-outs, envelopes and maps which the end-user can interact with so they can understand the scales, proportions, distances and so on. It's no longer enough to provide brochures filled with pictures of happy families strolling along palm tree-lined streets - they want more detailed information so they can make an informed decision. Frankly speaking, I don't think the current property brochures really provide any substantial information and that's why a lot of clients are disappointed when the projects are finished and handed over," she says.
Sulaiman Al Fahim, CEO of Hydra Properties, agrees, saying: "I saw what they did with Golf Walk and I thought ‘yes, at last, the customer can begin to understand what we are trying to do here'."
Alexander McNabb, group account director of Spot-on PR agrees with Malek and says that there has been a lack of differentiation in how property companies market themselves. "A few projects have carved out niche markets for themselves through more sophisticated marketing but everyone tends to use the same generic words like ‘unique, unparalleled beauty, luxury lifestyle' and so on. It's okay to market like that when the market is highly buoyant but now that there is starting to be a little bit of crunch and maturation in the market and these developments are no longer selling themselves."
According to McNabb, the problem with not having any differentiation in the market is that the market ends up being price-led or price-dominated.
"However, now that the market is maturing, it creates space for property companies to start competitively differentiating through good PR," says McNabb, "Up until now property developers' understanding and use of PR as a skill set in general has been minimal. It's easy to place an advertisement but good PR will make assertions that it can back up. That's why it's often said that advertising sells the dream, whereas PR sells the stake. So it's not surprising that developers have opted for advertising as opposed to marketing."
McNabb believes that with the market becoming increasingly realistic, a developer's reputation will start to play a larger role and act as a differentiator. A greater role played by the media and consumer feedback will help to lift the lid on a company's reputation. "Those that are facing a reputational crunch will probably flee to PR," he laughs. "There have to be reputational issues in a market like this and until companies believe that's something they might face they won't invest in market communications. But it's not an overnight job - to implement PR effectively in this part of the world, you not only need to change the way the company communicates, but also operates."
It is for this reason that McNabb says Spot-on is not currently representing any property developers. "Without wanting to sound snotty, our practice is based upon doing planned marketing differentiation strategy work with clients. At the moment, PR companies will take on virtually any client. So it will be interesting to see how PR firms react when the market matures - I think that's when they'll start sieving through clients and the developers themselves will have to find a satisfactory way to communicate with consumers without relying on the ‘live the gorgeous lifestyle' message."
Rohan Marwaha, group development director for Cityscape Abu Dhabi, however, believes that while marketing strategies may need to work on improving knowledge, their international reach is impressive: "Companies are really going the extra mile, and are no longer just promoting themselves in the region but also around the world. For starters, not only are they using the Cityscape portfolio to branch out more, but they're also promoting themselves at other international exhibitions.
"The property companies in this world don't feel that any medium is too small or too big - they'll choose all the variety of forms of promotion to get their name and brand out there."
Marwaha is convinced that the most effective medium by which to market is through exhibitions and conferences: "It's very rare for either an individual or institutional investor to meet such a diverse range of people in one place. That's why the exhibitions are doing so well - everyone they want to meet converges in one place for three days, and they can ascertain trust levels and follow up on those meetings. Any marketing, whether interactive or not, is an additional tool to the exhibitions."
Indeed, research shows that a huge percentage of property companies' annual marketing budget goes on promoting themselves at the Cityscape events. That they are rewarded for that investment is evident by the fact that 99% of the exhibitors keep returning with bigger and better stands. Consequently, Cityscape Dubai is experiencing 50% growth.
Nevertheless Marwaha does not dismiss the importance of comprehensive marketing. "How can an investor determine how best to invest in a project or who to joint venture with when it doesn't even know the price per square foot of a property?" Yet, while there's still a huge lack of information, Marwaha has also noticed that knowledge is becoming more readily available and believes this is changing the nature of marketing. "No doubt that's why we're finding that companies are now able to do more specialised and targeted marketing for their brands because as the rate of information increases, they can now make calculated and informed decisions rather than just following the next player."
It seems the process has already started. Emaar's new global marketing director Alex Andarakis is believed to be looking at several new strategies which go beyond the clever one-line descriptions such as ‘History Rising' for the Burj Dubai. An Emaar source says: "You look at the Burj Dubai and it is a classic case of having one of the best sales pitches ever, but people now want more, they want to see beyond the marketing gimmicks and find out what they are really getting for their money."
With US$400bn of projects showcased in Abu Dhabi, there is plenty of choice for investors. Now it's up to developers to design, build and market projects that truly stand out from the crowd.