On November 6th, at roughly 3:15PM Eastern Standard Time, the National Association of REALTORS declared war on the rest of the real estate industry.  To be fair, NAR probably did not realize that it did so.  Judging by the initial responses, it doesn’t appear to me that most people see what I saw.  But, probably because of my twisted nature and my penchant for focusing on the dark side of human nature, I am predicting nothing short of civil war in the real estate industry going forward unless REALTORS Property Resource (or RPR) in its current form is immediately scrapped.

What brings forth such hyperbole?

RPR, or REALTORS Property Resource, was a project shrouded in secrecy.  Brian Larson’s post of October 19th, 2009 is a pretty good pre-unveiling summary of the questions and concerns around RPR.  Brian Boero’s initial take is a very decent summary of the post-unveiling.  But since Brian is a much nicer, much sunnier, much more positive guy than I am, I believe what you’ll get from Brian is the “Glass Half Full” vision.

Strap in for the darker vision.

RPR In A Nutshell

I got off the preview webinar earlier today with my head spinning.  With the video choppy, I confess I missed a good 20 minutes at the end, so if anything I write/speculate below is totally incorrect, I’d be happy for corrections.

Based on what I heard — and I’m going off of notes here since I have neither a transcript or the webinar recording to review — RPR is a national database with 140 million property records, both residential and commercial, with the vision of becoming the resource for anything real estate related.

LPS (a division of Fidelity) will provide the base property data — some 265 million residential and commercial assessment, sales, and mortgage records.  That is north of 90% coverage; through future unspecified investments into an unspecified company (or companies), RPR plans to increase that to 100% coverage.  On top of that, RPR will add in all of the on-market and off-market data from MLS’s, including notes and annotations by individual REALTORS, to create what will be the most accurate source of real estate data in the country.

There will also be 850K distressed property records in various stages of foreclosure with complete address, owner, and mortgage info updated every month.  It is unclear where this data is coming from.

125K elementary, middle, and high school information (both public and private schools) together with detailed data and parent reviews will be available via RPR.  I assume one or both of Education.com or Greatschools.net is providing this data; if someone else, that makes things even more interesting.

Neighborhood demographic data (I assume the census, employment, etc. type of data that companies like my former employer Onboard Informatics specialize in) will be provided through RPR.  But RPR will also feature psychographic data — consumer spending habits, consumption habits, etc. — of the variety available from companies like Nielsen Claritas with its PRIZM product.

Very cool mapping tools will be available through RPR; from what Marty Frame (more on this below) said, it sounded a bit like RPR will offer some level of GIS functionality through RPR.

Oh yeah, and RPR offers some of the coolest, slickest property search, annotation, comparison tools I have seen yet for real estate professionals along with customizable reports including CMA’s, Property Profiles, and others.

Finally, RPR will offer a custom AVM (Automated Valuation Model) a la Zillow’s Zestimates.  Except that RPR will bring in actual MLS data, notes, annotations, and opinions of individual agents to create the REALTOR Valuation Model or RVM.  This RVM will be, according to NAR, the gold standard for data accuracy and quality.  Then on top of the uber-database, RPR plans on layering on heavy-duty data analytics to slice and dice for even more custom datasets.

I know I’m leaving things out, but bottomline is that RPR is a dream user interface for REALTORS.  It’s better than anything I’ve seen from the Big Tech companies like Trulia, Zillow, Roost, Homegain, Cyberhomes, even Redfin.

Oh yeah… RPR is not only a database… it’s a company.  It will be a wholly owned subsidiary of NAR, but separately staffed, separately created as an Illinois LLC, and run as a startup.  The new CEO is Dale Ross, the founder and former CEO of MRIS, the largest MLS in the country. (Full disclosure: MRIS is a client of 7DS.)  The President is one Marty Frame, formerly of Cyberhomes, and once described to me as “the smartest guy in real estate, period.”  Those are heavyweights.

In answer to Brian Larson’s question about business models for RPR, there are two.

First, RPR has already been in discussions with government organizations such as Fannie Mae, the Federal Reserve, OFHEO, and others about providing them with far more accurate data on housing trends, pricing, etc.  Washington (and I imagine state and local governments) responded with enthusiasm, suggesting that had RPR been available five years ago, the whole subprime mess might have been avoided.

Second, it sounded to me like LPS will be granted an exclusive license to distribute/sell the various data products that RPR will spit out, from the RVM to the various data analytics products of the sort that Wall Street hedge funds might care about.

Other than that, the entire system is free to REALTORS, and it sounded like it would be free to MLS’s and Associations.

So Why the Negativity?

Based on the above, if you thought that RPR was the greatest thing since sliced bread to hit the real estate industry, you would be forgiven.  In a way, it is.

But RPR is a trojan horse to the MLS industry, which is the foundation of the real estate industry in the United States, and a giant middle finger to some very significant players such as MLS technology vendors (e.g, First American, MarketLinx, Rappatoni, etc.), data providers not named LPS, almost all of the major brokerages, and a few others besides (Dear Mike Simonsen: I wouldn’t make any large purchases anytime soon.)

The MLS

Brian Boero writes:

For MLSs

This is where it gets really thorny. As Brian Larson pointed out in his excellent post examining the potential business models for the RPR, there are lots of potential overlaps between a national property data site and what Realtors already get from their MLS. Some MLS operators think the NAR has no business doing this and perceive it as the precursor to a national MLS – a cataclysmic prospect from their perspective. Others – usually those who are relatively innovative and thus less insecure about their own value proposition – welcome the potential disruption.

Some will be convinced much as they were during the days of Homestore options and Gold Alliance dollars by the prospect of some upside. Others will be won over by NAR/RPRs insistence that there will be no offer of compensation in the RPR.

Whose ox gets gored, who benefits, and where the money flows is anybody’s guess at this point. But what I can safely say is that this is a significant shock to a system that needs it.

Will MLSs play ball? As with most things in this space, the outlook is unclear.

I think I can answer this, Brian.  The outlook is unclear, but all of the signs point to war.  The ox that gets gored is obvious, and where the money flows is also not a secret.  (Unless I’m missing something crucial here….)

First, look at the incentives.  Try as I might, I can’t see a single good reason why an MLS might participate in RPR unless there is some contractual obligation on the part of MLS’s to provide its data to RPR or to NAR.  I am assured by industry executives that there is no such obligation.  Once its members start using RPR’s rather amazing user interface for all of their needs — except the entry of the listing information in the first place, which incidentally is not required since RPR has all of the property information in the country so all you have to do is go into the system and flip its status from “Unavailable” to “Listed” — they might reasonably ask, “Why am I paying the MLS this $20/$40/$60 a month again?”

At the very minimum, we’re looking at significant pricing pressure since the value being provided is so much less in the World with RPR.  And in many cases, the MLS will simply go bankrupt.  Turns out, MLS’s employ rather lots of people, including executives who are drawing a very nice income from heading up said MLS’s.  Are we to believe that these people will voluntarily march down to the unemployment line so that RPR can make millions?

The $25 – $50 million in savings to MLS’s and Associations that Dale Ross threw out is presumably the bait.  Some MLS executives will jump at that, then watch in puzzlement as their membership numbers dwindle down to nothing.

The “offers of compensation and cooperation” is significant, sure.  I can think of no reason why NAR could not make that a rule as well.  Of course, NAR has sworn up and down not to do such a thing to forestall the fear of the national MLS.  However, the “offers of compensation” as nice as that is, is unnecessary to create a national MLS in all but name: case in point = Loopnet.

What further amazed me is that RPR openly admitted that it will pay $12M to LPS for its public records data, but left out any mention of any sort of payment to be made to the MLS for its far-more-difficult-to-obtain data.  Was this simply an oversight?  If not, the financials of RPR, LLC are going to look rather different.  Public filings information, after all, is available from other players — specifically First American.  MLS data is available only from the MLS itself, or directly from its member brokers and agents.

So when Brian talks of “some upside”, I’m not sure what he’s referring to.  Because I didn’t hear anything about any upside to the MLS.

Those who are “more innovative and more secure” ought not to be so secure.  Innovative how? A public facing website, as HAR has?  Since RPR is not (yet) a public facing website, but a backend website for the real estate professional, once HAR’s data is being fed into RPR, I find it extraordinarily difficult to believe that a REALTOR in the Houston area would use anything other than RPR for his day to day business.

The inclusion of CMA’s, of reports, of notes and annotations — this is extremely significant from this perspective.

Fact is, once RPR is in your market, every REALTOR will use it.  It’s that good.  There isn’t an MLS in the country (yet) that can release a competing product.  Over time — and a rather short period of time at that — every member of that MLS will wonder why he is paying those MLS fees.

Human nature dictates it.

The Technology Vendors

That RPR is a gauntlet thrown down to the companies that supply the backend technology to MLS’s cannot seriously be disputed.  What RPR will provide is better than any MLS system on the market today, period, full stop, end of story.

If companies like MarketLinx want to stay in business, they’re going to have to spend a rather large sum of money to create a competing product.  Oh yeah, and find data.  Oh, and find a way to monetize that data, as RPR plans to do.  And guess what?  LPS ain’t gonna be playing with you no more.

Are we to believe that all of the executives and employees of these various companies will happily march their way to the unemployment line so that RPR can make millions?  I seriously doubt it.

At a minimum, I would expect various MLS technology companies to suddenly discover that the RETS data standard simply doesn’t work at transmitting data accurately, adding months upon months of cost in order to make data import/export feasible.  Or that certain things, like photographs, can only be transmitted by blind messenger pigeons with diabetes.

Actually, I expect that these executives are currently banging the phones a la Jerry Maguire immediately after he’s been fired, calling every single MLS client to convince them not to participate in RPR.  The battle lines have been drawn.

Plus, should we expect that the good people at First American, at whichever school information provider who wasn’t chosen, at whichever foreclosure info provider who wasn’t selected by RPR, and other such companies are quietly updating their resumes?

I rather think they are sharpening their swords and polishing their muskets.

Speaking of Data Monetization…

What businesspeople and other evil villains quickly realize is that RPR, as a for-profit venture of NAR, isn’t offering all these wonderful tools for the betterment of humanity.  They’re doing it to make millions of dollars from data sales.

Companies currently making money from selling data to governments and to Wall Street might reasonably inquire how they might forestall having to file a Chapter 7 bankruptcy.

MLS’s and Associations might reasonably wonder if they might bypass the middleman of RPR and sell their data directly to Fannie Mae and others by hiring a data analyst or three.

These two might find each other in the next few months and discover many topics of mutual interest to discuss.  The battle lines are being drawn.

Speaking of which, via Twitter earlier today, I had an interesting exchange with an industry guy who’s really quite smart.  He was all jazzed about RPR because now, there’s a single source of data from which he can pull information.  Except that neither Dale Ross nor Marty Frame breathed a single word about “free data access”.  I heard nothing about a RPR API; nothing about RPR web services; nothing about exporting the data out of RPR… unless you’re Fannie Mae, Wall Street, or… oh yes, customers of LPS!  In fact, RPR is relying on the sales and marketing prowess of LPS to monetize the data products.  Who might LPS be selling such data to?  You don’t really need that many salespeople to sell to a dozen government agencies and Wall Street firms, do you?

Maybe I’m wrong; maybe RPR does plan to make a free API available.  I can’t see it, since that would more or less destroy its business model.

Therefore, I have to conclude that RPR will offer the user interface, the tools, the RVM, the reports, and all of these wonderful things to the REALTOR at no charge… but charge rather handsomely for any sort of a data feed that isn’t tied up with a huge list of restrictions on display, usage, and derivative products (a mainstay of RPR’s business model).

The Brokerage

While Brian Boero saw RPR as a big boon for brokerages, I rather think differently.  Already, big brokers are under pressure for not doing enough to provide value to its agents.  Independents are popping up everywhere as the big brands continue to lose meaning in the consumer’s mind.

One of the benefits that large brokerages could provide to its agents is a sophisticated, sexy backend tool that provides things like accurate data, custom reports that provide a competitive advantage, and beyond-the-MLS information.

After RPR, every single member of NAR will have the best backend agent tool ever created.  If you’re a Coldwell Banker agent, there will be little reason to go to CREST or to the CB Extranet site to get tools and data.  RPR will have it for you.

The mapping tool on RPR kicks the bejesus out of anything I’ve seen offered by any major franchise or major brokerage.  And the local mom and pop will have it, just as your agents will, except that the local guy will be paying 90/10 splits since he doesn’t have the overhead you have.

Think your big brokerage office will be attracting or keeping more top agents?  Based on what?

The Civil War

With the incentives as lined up above, civil war within the industry is virtually inevitable.  Brian believes that NAR will simply go direct to brokers and agents if the local MLS does not cooperate.  I wonder if he has considered the possibility that the local MLS will withdraw from NAR.

As far as I can tell, each MLS is a private business enterprise that has no legal or financial relationship with NAR, a trade organization.  As far as I can tell, each local Association is a private organization, rather than a chapter of NAR, that is affiliated with NAR and allowed to use the REALTOR name and logo.  But since licensing of real estate is at the state level, I’m not sure I see the downside for (let’s say) the Houston Association of REALTORS to change its name to the Houston Association of Real Estate Licensees.

For the broker/agent in Houston, then, the choice will be: (a) join NAR and get access to RPR, but only with listings other RPR members have put in, or (b) stay with HAREL, deal with crappier interfaces (at least until HAREL’s MLS tech vendor gets its upgraded product to market), but get all of the listings.

Some brokers may choose RPR and NAR; others may choose HAREL.  And now we have civil war.

Every single vendor, every data provider, every company that was not chosen by RPR as its partner has all the incentive in the world to line up with the Rebel Alliance against the LPS-RPR Empire.

Yes, I’m probably being overly dramatic.  Probably.  Right?

Blessed Are The Peacemakers

The sad part is, I suppose, that this did not need to happen.  And since RPR is not yet fully launched, war may yet be avoided.  How?

It’s actually quite simple.

First, get rid of the RPR website.  Offering that user interface alone makes NAR/RPR the enemy of every MLS tech vendor and of every MLS in the country.  Instead, sell that interface technology to someone… like say LPS, which owns a MLS tech company, or put it into the public domain as open source code to spur innovation throughout the industry.

Then focus on making RPR a database in the true sense of the term: MLS’s put in data, and they get back data.  The members continue to rely on the MLS for the user interface, for the reporting, for tools, resources, etc.  The more innovative MLS’s will partner with better tech vendors to create innovative interfaces; the bad ones will get taken out by the good ones.

Second, the revenues from data sales must be split with the MLS, which can then pass on the savings to its member brokers/agents, or use the money to improve services and products.  If the interests of NAR/RPR are not aligned with the interests of the organizations it is relying on to provide hyperlocal and hyper-valuable data, I see no way to convince them to give it up.  This will make RPR’s financial projections worse, but on the other hand, they don’t have the cost of developing out sexy user interface either.  And NAR doesn’t face the prospect of losing members by the hundreds of thousands.

I believe I have just now done more for peace than Barack Obama has.  I await the phone call from Sweden.

Conclusions

Do keep in mind that I wrote this off of hastily taken notes and first impressions.  Maybe I missed something big that renders my whole post completely wrong.  Also keep in mind that maybe I’m dead wrong about what motivates people and organizations and companies.  I doubt it, but the possibility exists.

Having said that, what I heard and saw today on the webinar is nothing short of a declaration of war by NAR on the rest of the real estate industry.  By extending RPR past a national database into the best user interface/MLS software in existence, RPR has threatened the survival of the organizations that make up the infrastructure of domestic real estate: the MLS.  I believe this is a mistake on NAR’s part, and one that they will end up regretting in relatively short order.

There will be blood.

See here, Mr. MLS Executive... I DRINK YOUR MILKSHAKE!

This amusing graphic is from Marty Neumeier’s book Zag: The No. 1 Strategy of High-Performance Brands (which I haven’t read yet but will be picking up on the strength of this post on @Issue — hey, social media marketing in action!).

The editors of @Issue note:

His book was published before social media caught on, so we don’t know how Twitter would fit into this comparison? Maybe a courtship between two emoticons.

So what would “7. Social Networking” look like?  Would it be any different from the six already here?  In some ways, it would be closest to #3 – Public Relations and #6 – Branding.  But there are elements that are missing; I’m trying to think of what those elements are.

Any thoughts out there in Notorious-Land?

-rsh

Nearly one in five (19%) online Americans now uses Twitter or a similar service to post and share updates about themselves, or to see updates about others, according to the latest survey data from the Pew Internet & American Life Project.

This figure represents a significant increase over previous surveys that reported on Twitter use. Research in in December 2008 and April 2009 from Pew found that only 11% of internet users preported using a status-update service, while a similar study by Harris Interactive in March/April of 2009 found that number to be even lower, at 5%.

Let’s assume that the research is valid and accurate.  1 out of 5 is an amazing figure in and of itself.

There are, however, two other even more amazing observations that can be made if we take the 20% figure as valid.

First, we may be heading towards a self-balkanized America with no common shared cultural touchpoint.

If 19% of online Americans are on Twitter, and some 73% of all American adults are online (this is from 2006, by the way, so the actual number might be higher), and there are 304 million Americans of which 227.4 million are 18 years of age and older, what we get is that there are some 31.5 million Americans on Twitter.

Well, the #1 highest ranked Twitter user in terms of number of followers is one Ashton Kutcher, with 3.88 million followers or 12.3% of the total Twittering Americans.  That’s it.  in terms of news or information sources, CNN tops the list with 2.79 million followers, or 8.8%.

The implication is that Americans have formed a bunch of small cells of their friends, colleagues, people they know on Twitter — there is no Twitter user/company/whatever that commands the majority of the Americans using Twitter for whatever it is that they use it for.

If social networks is the future of information distribution and communication, then we’re likely headed into a society without a defining common shared source of information or culture.  We’re going to make references, allusions, and jokes that will become increasingly “insider info”.  Gamers will instantly know what other gamers are talking about, while art fans will be speaking mostly with other art fans.  Micro-fragmentation appears to be something we need to think about.

Second, maybe none of that micro-fragmentation stuff will matter because Americans are just plain too dumb to survive in a challenging world.

Here’s the top ten most popular (in terms of number of followers) users on Twitter:

1.  Ashton Kutcher (aplusk)
2.  Britney Spears (britneyspears)
3.  Ellen DeGeneres (TheEllenShow)
4.  CNN Breaking News (cnnbrk)
5.  Twitter (twitter)
6.  Kim Kardashian (KimKardashian)
7.  Ryan Seacrest (RyanSeacrest)
8.  Barack Obama (BarackObama)
9.  John Mayer (johncmayer)
10.  Oprah Winfrey (Oprah)

Seven of the Top Ten (eight if you include Barack Obama, Celebrity President) is an entertainer/celebrity.  Some are celebrities that are famous for being famous — Kim Kardashian for example.

If this is what Americans want, then that’s what Americans want.  Just don’t ask me to think the future is rosy and wonderful on this evidence.

-rsh

PS: Note that adult Twitter users are computer-literate, tech-savvy people over 18.  The supposed creme de la creme of our society, who “get it”.  Oh #*@(%@!

Yo, FaceBook me homie!

In my Top Nine Things I’ve Learned at BlogWorld post, I wrote:

Many social media professionals talk as if social media is the future of media, then act exactly the opposite when camera crews show up.

I can’t forget the moment.  Due to some deadlines, I excused myself from a session to get some work done while everyone else was attending a session or a keynote.  I found myself at the cafe near the Convention Center, setup the mobile office, and started working.  The TV on the wall was tuned to something I can’t recall, since i wasn’t paying attention to it.

Suddenly, a youngish gent walks in, instantly recognizable as a BlogWorld attendee: thick black plastic frame glasses, some witty geek-chic T-shirt (like, “I Twitter, therefore I am” or some such), jeans, and a backpack.  He asks the cafe staff if he can change the channel to CNN — and they say yes.  CNN comes on, and they’re doing a segment on BlogWorld.  Ah ha!  That’s why this guy was so interested.

Some nameless anchor who I couldn’t pick out at a lineup is interviewing a number of folks, including one of the founders of BlogWorld, and the talking heads are going on and on.  And I found myself wondering… if a blogger had contacted the organizer of the Annual Conference of the American Society of Newspaper Editors... would one of them have dropped everything in the middle of the conference to get on a videochat with him?

Would any attendee at ASNE’s Annual Conference have stopped whatever he was doing to rush to a laptop because he had heard that The Bloggess was going to post an interview with the editor of some newspaper?

Actions speak louder than words.  And this, frankly, is why I fear that social media might be hype after all.

Rhetoric vs. Evidence

The rhetoric around social media is that it’s the end of the world as we know it, and I feel fine.  Social media will change the relationship between companies and customers, blow journalism apart, and create a new society where everyone is a publisher and audience, everyone is a producer and consumer, and every connection is genuine, human, and authentic.

Part of me really believes that.  Really.  I’ve seen enough in my own life to believe that there is indeed something revolutionary in networked communications.

At the same time, I can’t get over the fact that the more recognized and more famous “social media gurus” are more recognized and more famous because of legacy media.  Why, for example, does Chris Brogan tout the fact that “He has been quoted in the Wall Street Journal, US News & World Report, The Montreal Gazette, Newsweek, and some other places”?

Social media is supposed to be a massive paradigm shift in the way companies market themselves and their products to consumers.  If you don’t get with the program, your company will quickly become irrelevant to consumers who are all interconnected and networked and so on — so you need to hire a social media guru to put together a kickass social media marketing campaign for you!

And yet, evidence suggests something else altogether.  Coca-Cola, with all of its sophistication, all of its money, and all of its marketing brilliance, is reduced to saying things like:

It’s about bringing incremental increases in brand love, purchase intent and actual purchase. But for some brands, like if it’s a new brand—we’re launching vitaminwater around the world—the brand strategy is building awareness and trial. What are you going to measure there? You’re going to measure awareness and brand recall. There’s not one pat answer of what we’re looking to measure because it depends on the brand and the business objectives.

And of course, it seems plenty obvious that Coca-Cola hasn’t exactly stopped spending money on legacy media in order to, you know, drive things like “true incremental volumes and true increases in sales”.

The only example I can think of where a major national company has bet big on social media (at least, online marketing) for marketing is Century 21 — a real estate company.  And the jury is still out on whether that was a good move or not.

Given the shakiness of the claims of social media for transformative power, I would have thought that those who are most in the know, those who are most convinced that social media is the paradigm shift, would act as if they believed it themselves.

On the Other Hand…

There are, however, signs that maybe this social media thing is a big deal after all.

Exhibit 1: Sarah Palin.  Now, you don’t have to like her, agree with her politics, or any such thing to notice that the woman is rewriting the rules of political media pretty much all by herself.  Her endorsement of Doug Hoffman for NY-23 was published only on her Facebook page, and nowhere else.  No press conference, no press release, no begging CNN or Fox News for time — just a direct to the public Note via Facebook.

But everyone is talking about the endorsement, and within political circles, everyone knows that Palin broke with the GOP in endorsing Hoffman.

Again, leave the politics to the side and look at what happened here from a media standpoint.  Sarah Palin completely bypassed legacy media and all of its infrastructure and yet still got the news out to the world.  She acted as if social media was the only channel that truly mattered.

Writing about her decision, blogger Melissa Clouthier made this point:

Palin has been sending a couple messages recently. First, she has, since stepping down as governor, started to communicate with the people not through the press but around the press. In other words, she’s speaking directly to the people through social media. She has had a couple well-timed and well-placed op-eds that have helped define policy arguments. However, most of the time she’s talked to the people via social media. (It should be noted that she’s been silent on Twiiter for some time — something I hope she’ll change soon.) This has had the benefit of letting the press know that she does not need them. Rather than go the Obama route and deny what is perceived as the one “enemy” to her aims, Sarah denies nearly everyone. And why not? The press trashed her with risible lies. Why give a dying breed ratings when she can reach the people herself? (Emphasis mine)

Shouldn’t the social media illuminati be behaving precisely as Palin does?

Exhibit 2: Real Estate Industry.  One of the reasons why I and others believe that real estate is ahead of the rest of the world when it comes to social media is that we have actual success stories in real estate.  Even as I pick at the nits, and want clearer data/evidence, fact is that we do have clear success stories of companies and individuals who have achieved real business success, real dollars, and real meaningful results from social media.

I would point to Altos Research as the poster child for a company that achieved success almost entirely through social media.  But it is by no means alone.  Individual realtors are seeing real results (even if they have trouble compiling the data for ROI measurements) from Facebook, LinkedIn, blogs, and Twitter.  And they behave exactly as if the legacy media is dead and dying — print advertising has fallen through the floor, at least at the individual level, while investment in web, blogs, and social networks is through the roof.

Again, actions speak louder than words.  Results trump rhetoric every single time.

I believe social media is more hope than hype.  If only the leaders of our nascent little movement would show us the same by walking the walk, rather than talking the talk.

-rsh

My post is the Top Nine Things I Learned at BlogWorld, because I’m definitely less than Morgan in this regard, and because the last person in the world I want to emulate right now is David Letterman.

So here they are:

1. Real estate is way ahead of the curve of every other industry when it comes to social media, because it turns out that social people do better with social media.
2. Journalists have no idea where journalism is headed, because they don’t really know what the institutional competence of media is.  They’re not particularly interested in finding out.
3. Social media needs a House of Medici, a patron who will demand nothing in return except creativity and art, because most of these guys produce incredibly cool shit that will make absolutely no money.
4. BlogWorld is kinda like GenCon in terms of how friendly everyone is, except the attendees have fewer things in common.
5. Many social media professionals talk as if social media is the future of media, then act exactly the opposite when camera crews show up.
6. For a group preachin’ authenticity, there sure were a lot of people with all kinds of gimmicks, like dressing up as Vader, or puppets, or hugging strangers, or stage wigs.  Pretty sure that half the people I met weren’t people at all, but IRL avatars.
7. Niceness is absolutely the coin of the realm in blogworld.  Whuffie is for real, at least until you have to buy a sandwich.  Then it’s not.
8. Very few people in social media know how to dance.  I gather that nightclubs are not their native habitat. If you saw some dancing at one of the parties, chances are better than even that they were from the real estate world.
9. It is extremely easy to spend $800 on dinner for six in Las Vegas, and still be hungry as you walk out of the restaurant.

Most of this list will find its way into one or more longer posts in the future.  But there you have it.  Apparently, I learn all the wrong lessons by looking at all the wrong places….

-rsh

Holy Bloggers, Batman!

Greetings from Las Vegas — I’m not sure what time it is, even though I’ve been fully awake for, oh, a few hours.  But some of the discussions at REBlogWorld 2009 have been so great that I wanted to get something posted now.

One of the more interesting sessions for me personally was the Branding in the Social Age session with luminaries like Jeff Turner (@respres), David Armano (@armano), Todd Carpenter (@tcar), and Ian Lurie (@portentint), moderated by a luminary herself, Nicole Nicolay (@nik_nik).  I thought the insights were interesting, and the brainpower on that panel was impressive.

There was one point, however, which I suppose yours truly raised, that could use some elaboration and explication: multiple brand layers and how they function in social media.  I was genuinely curious what branding experts, especially those from outside our industry, like David and Ian, had to say about the issue — and I don’t know that they understood the issue.  Plus, the inimitable Bill Lublin (@billlublin) had his views on the matter, but I’m uncertain that he understood the context.  So the fault is mine for failing to set the stage adequately and explain precisely what I meant, and why I think this is an issue.

Re-Exploring Multi-Layer Brands

I originally wrote about multi-layer branding back in February.  In that post, I talked about what I think is the branding issue for REALTORS: unlike just about any other industry, each individual REALTOR is encouraged to have a personal brand identity.  And yet, the totality of the brand of a REALTOR is comprised of several levels that all try to create its own branding, its own value proposition, and its own differentiation.

I know this graphic is relatively poor, but it’ll have to serve:

Yay, brand layer cake for everyone!

My thought back then was that starting from the base of “licensees” (i.e., people who have a real estate license), each “layer” conducts branding exercises whether through advertising, public relations, communications, and whatever else it has at its disposal.  And because each layer is larger than the elements beneath it, the effect of that branding is transferred in part to the layers underneath.

So for example, NAR, the National Association of REALTORS, brands the term “REALTOR” as a licensee with superior ethics and knowledge.  Then underneath that, the national franchise like RE/MAX would brand its agents as the most qualified, the best educated, most knowledgeable, and so on, including specific statements like: “RE/MAX agents average more sales than other real estate agents. They are better qualified to set the right price for the homes they list, better equipped to market those homes, and likely to find clients engaged in the homebuying process in a shorter period of time.”  And on on down the line, until we get to the individual REALTOR who might boast about her track record, certifications, and so on.  At each level, the entities are trying to brand themselves as distinct from and superior to competitors.

I posited that this wasn’t a major problem with traditional marketing, when wider “reach” (or perhaps wider “focus”) necessarily meant greater generalization, such that the individual agent can build on top of the brand(s) above her, which in turn can build on the brand(s) above them.  But, I hypothesized, that this matrix of brand value disintegrates in social media context where the connection and the branding is far more proximate between the lower layers and the ultimate consumer.  Someone reading an agent’s local real estate blog is experiencing that agent’s personal brand, in the social age.  The brand ‘above’ her might actually conflict with what she’s writing about day in and day out.

What’s more interesting is that because social media could set up direct relationships between the consumer and an organization, the over-brands could end up becoming the primary brand in the mind of the consumer.  A large brokerage company with a superlative blog, Twitter outreach, and so on could set itself up in the consumer’s mind as the go-to company for real estate in a wide area, thereby frustrating the personal branding efforts of the individuals in the ‘underbrand’.

Overbrands and Underbrands

Again, because I didn’t explain the issue/question well enough, let me offer mea culpas all around.  The non-realestistas on the panel missed the point.  Ian’s thought was, “Screw the big brands; work the personal brand.”  David’s thought was something like, “If you work for a company, then be a good corporate citizen; if you’re on our own, then work your own brand.”  Bill Lublin’s objection to my question I think was something like, “NAR’s advertising is member-driven, so it’s okay.”

All very good points — but since my question was about the interaction between ‘overbrands’ and ‘underbrands’ (which, like I said, I didn’t explain well enough), none of them were precisely on point.

But several of their other points are very much on point.

First, Ian Lurie’s story about Alaska Airlines and how they had to fight the “industry brand” of the airlines hit home for me.  His point was that despite having truly superior customer service and social media outreach, Alaska Airlines constantly has to fight the consumer expectation that ‘traditional’ airlines are going to suck.

Second, all of the panelists spoke about how “brand” isn’t just message and advertising, but delivery of value, customer service, and meeting expectations.  Jeff Turner in particularly spoke about understanding, articulating, and then living the organization’s values.

That there is some good stuff! Now, let’s apply it to real estate, and see what falls out.

The first thing that strikes me is that across the board, the panel agreed (or seemed to agree) that actions speak far louder than words when it comes to branding in the social age.  The smallest infraction of the brand promise gets amplified by the social web, as networked and interconnected consumers spread the word.  In the social age, it isn’t enough to have pretty words on the corporate HQ’s lobby walls: you gotta walk the walk, not just talk the talk.

The second thing that strikes me is that like Alaska Airlines, many REALTORS are fighting the existing negative brand of the industry.  The top-level brand, that of REALTOR, suggests that members of NAR are ethical and knowledgeable… unlike those other guys who are unqualified crooks.  And at each level, the unspoken assumption seems to me to be that our people are great in a bunch of ways, unlike those other guys.

But as the panel said, it’s about action — about values, and living those values.  So how does all that work for the overbrands and the underbrands?  That’s my real question: the interaction between the overbrands and the underbrands in the social age, when action speak louder than words….

If Only Personal Brand Matters

Now, it may be that as Ian Lurie suggested, the overbrands don’t matter one bit in real estate.  The conventional wisdom is that consumers hire an agent, a person they know and trust, rather than a company or a brand.  That might be true; the data to say one way or the other is somewhat lacking.

Here’s the thing: if it is true that only the personal brand matters, and that individual REALTORS are therefore the primary locus of the brand values even in the consumer’s mind, then that position has consequences.  For one thing, the overbrands then have no incentive whatsoever to care about raising the bar.  If I’m RE/MAX, I don’t have to live my values of higher quality agents; that brand doesn’t mean anything anyway.  So I might as well maximize my revenues by signing up anyone with a pulse, as long as there’s marginal profits to be had with each such agent.  Because only the personal brand matters.  Ultimately, then, none of the brands, none of the brokerages, none of anything matters except for the individual personal brand.

That isn’t an outcome the industry wants or needs.

And it isn’t an outcome I consider likely because I think the overbrands do mean something.  It isn’t clear to me what each layer means, how much of its brand promise/value proposition gets passed down, how the underbrands affect overbrands, and how all of this works inside the chaos that is social media.  But they all influence each other, and they all do mean something.  The question is… how?

-rsh

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]]> http://www.notorious-rob.com/2009/10/17/reflections-from-reblogworld-09-branding-in-the-social-age/feed/ 10 http://www.notorious-rob.com/2009/10/17/reflections-from-reblogworld-09-branding-in-the-social-age/?utm_source=rss&utm_medium=rss&utm_campaign=rss http://feedproxy.google.com/~r/TheNotoriousRob/~3/Y90RaxNfBFE/ http://www.notorious-rob.com/2009/10/17/from-blogworld-2009-conversation-best-looking-dude-in-re-net/#comments Sat, 17 Oct 2009 20:32:05 +0000 Rob Hahn http://www.notorious-rob.com/?p=1428 This is the kind of high-quality conversation that comes out of BlogWorld when the sessions are horrid.

Who is the best looking man in the RE.net? The five finalists were chosen by a panel standing around the hallway at BlogWorld, but there is a write-in choice for you.   But we wanna know what you think.

Here you go.  Coz you know, Notorious stands for the highest, value-add content for Real Estate…

-rsh

REALTOR.com is cluttered on every page with banner and tower ads that endlessly attempt to “distract” the shopper (who was attracted there in the first place with our listings) to click on the banner ad and wind up on that agent’s site. In short, our listings are nothing but bait for MOVE to sell ads to other agents so they can attempt to poach the client that would have naturally been ours.

Setting aside the utterly idiotic fees they charge, if it weren’t for NAR’s original bungling of REALTOR.com (*giving* it to Homestore, aka, MOVE) all these “other sites” like Trulia, Zillow, etc. would not even exist. Not at all. They were created because NAR gave away our name.

In Canada, http://www.realtors.ca/ is FREE, as in included with their dues to Canadian Realtors. Enhanced listings and all. (Emphasis added)

Verrra interesting… so here’s some unpaid, free “consulting” for Move, Inc.  It’s worth every penny you’ve paid for it.

Current Revenues

The first place to begin, of course, is where Move gets its current revenues.  According to Move’s 2008 Annual Report, Move generated $217M from “Real Estate Services” which includes Realtor.com and Top Producer.  The company describes it thus:

Real Estate Services consists of products and services that promote and connect real estate professionals to consumers through our REALTOR.com ® , Move.com and SeniorHousingNet.com web sites, in addition to the customer relationship management applications for REALTORS ® offered through the TOP PRODUCER ®  business. The Company’s revenue is derived from a variety of advertising and software services, including enhanced listings, company and property display advertising, customer management software and web site sales which are sold to those businesses interested in reaching the Company’s targeted audience or those professionals interested in being more effective in managing their contact with consumers.

But from that $217M, there were various expenses:

The two that appear to be giving various REALTORS agita and heartburn are “Cost of Sales” — those pushy salespeople making phone calls — and “Sales and Marketing”.  Related is the $21.8M spent on “Product and web site development” — REALTORS are unhappy with the features and benefits provided by Realtor.com.

Making Real Estate Services Part of NAR Membership

So as Russell suggested, what if the NAR Membership simply included all access to Realtor.com, as Canada does with Realtors.ca?  While you’re at it, you can throw in Top Producer and whatever else is in “Real Estate Services” as part of the cost of being a REALTOR.

To do this, of course, you can’t simply give up $217M in revenues; what would it cost to replace it?

Turns out, there were some 1.197M REALTORS in 2008; we don’t know how many there were in 2009, but let’s assume a slight decrease to 1.1M members of NAR.  We know that the dues for NAR membership is $80 for the 2009-2010 period.

To make full access to Realtor.com (and Top Producer) part of the benefit of being a NAR member, dues would have to go to $277 for Move to maintain its revenues at $217M.  Whether NAR members would welcome more than tripling their annual dues for the benefit of full access to Realtor.com or not is unknown.

However, it isn’t that straightforward.  Turns out, if Move is able to replace the $217M from its Real Estate Services operations from dues payment by NAR members, it can wholly eliminate advertising on Realtor.com, entirely eliminate “enhanced listings” (since everyone would have the ability to enhance the listing as part of their NAR membership), and eliminate any need for direct sales.  Move can also eliminate much of its Realtor-oriented marketing, as that audience is simply paying over the $197 per year in revenues it wants to generate, and focus the marketing towards consumers (buyers and sellers) to visit Realtor.com.

What this means, practically speaking, is that the profits for Move would be much higher, even at a lower revenue base if the Cost of Sales and Sales & Marketing lines could be dramatically reduced.  In turn, some of that money can be reinvested into Product Development, to offer new features on Realtor.com (and on Top Producer).  Here’s one scenario:

If we assume that there are 1.1M members of NAR, and that $80 per year is necessary for NAR’s operations, then dues would need to triple to $240 per year.  $160 of that goes to Move for annual revenues from the Real Estate Services division of $176M.

Cost of revenues can be entirely eliminated, since there is no longer any need to employ salespeople to make phone calls to sell enhanced listings packages or whatnot.  In fact, all ads on the site can go away too.

Sales & Marketing is halved, while Product and Web Site Development is doubled, reflecting the reinvestment that can take place.

Even while keeping G&A the same (maybe all those desks currently occupied by telemarketers get used by Customer Service?), and keeping in the $301K for restructuring, we can see that the ultimate operating profit is higher than under the current system: $66.3M vs. $52.9M.

Free Consulting to NAR

What’s even more interesting is that Move’s current market cap is only $412.41M.  This is about 1.7x of Move’s 2008 revenues of $242M.  We also know that the NAR license is absolutely critical to Move’s continuing viability, as discussed here by the management of Move.

So here’s a thought for NAR: Buy Move, then offer its suite of services for real estate professionals as a part of the dues of NAR membership (which, incidentally, triples).  Keep it separate, as a wholly-owned for-profit subsidiary of NAR, if you’d like.

Suppose you can buy all of Move for $450M; if the Move unit can generate somewhere in the $65M to $70M in profits, that’s payback in about 7-8 years.  But, once you eliminate the unhappiness of Realtors, and eliminate distracting ads from the site itself (as you don’t need those anymore under this business model), it’s entirely possible that Realtor.com comes to dominate the real estate search space.

Plus, by most accounts, only about 1.1M of the roughly 2.4M real estate licensees are members of NAR — there are another 1-1.5M people who could become members of NAR.  Those licensees can be offered subscriptions to Realtor.com at (let’s say) $30 per month — or join NAR for $240 for the year, and get all of the benefits of Realtor.com and TopProducers, etc. at no additional charge.

Seems to me that the NAR membership rolls would swell quite nicely, which in turn pushes up the profits that NAR would realize from its Move-based operations.

Win – Win – Win

So this scenario seems to me to be a Win for Realtors bitching about how horrible Realtor.com is, a Win for Move who can achieve higher profitability at lower cost of operations, and a Win for NAR who can grow its membership base while keeping its existing members happy(er).

The only obstacle is the dues, so I’d like to hear from the REALTORS reading this: How willing are you to go from paying $80 a year to $240 a year?

-rsh

So now that Benn Rosales of AgentGenius has jumped into the fray with his latest post, which comes on the heels of Jim Marks’s critique of my Inman column (subscribers only), I figure it might be good to consolidate my responses here.  And this is not to mention the various commenters on the Inman post, conversations via Twitter, email, etc.  This topic’s got folks fired up — in a good way.

Let me point out that the critiques come in three different flavors.

1. Social media is a great marketing platform!
2. Interaction on social media, including Twitter, is no different from offline networking.
3. Twitter is a great tool for building sphere of influence!

Let us go through each in order, then summarize with what I think is a larger lesson about marketing strategy.

Knocking Down Straw Men

The first critique is that social media is a great marketing platform, and it isn’t merely a relationship tool.  Benn makes this point:

Some argue that having a strategy in social media is a sin and treating it like a toy is the right way to go, and if that’s truly the case, then that is your strategy.  Being human in social media, not selling, and simply going with the flow as a conscious decision is a strategy.

I guess I agree with Benn… since I have never made the argument that social media (however we define this) is a toy.  What I have said is that I treat Twitter like a toy, and have no Twitter strategy, as I view Twitter as a relationship tool rather than as a marketing tool.

Social media in whatever variation of definition does encompass blogs, which I consider to be the single most powerful marketing platform of the Internet era — possibly even more powerful that the corporate website in some instances, for some types of businesses.  Social media includes FaceBook and LinkedIn, both of which are powerful marketing channels that demand a marketing strategy.  So let’s be clear that Twitter is not Social Media, and Social Media is not Twitter; Twitter is but one tool that has a specific original purpose and a platform built around that original purpose.

So this line of criticism turns out to be just a straw man and not worthy of a deeper response.

Social Networking No Different From Traditional Networking

The second critique is that social networking is really no different from traditional networking where strategy most certainly comes into play; therefore, I’m simply wrong.  Benn writes:

As for the strategy, we’ve simply exchanged a business card in the online world for a ‘follow’ and renamed a contact or lead to ‘friend’ and begun the conversation of converting ‘opportunities’ now acquaintances into referral networks and or potential clients.  The strategy is within the insertion of the influencer and the tactic is within the indirect marketing of content as a product, and how we build buzz within the tribe, not the act of making friends.  But I think some will certainly argue that there is even a strategy to making friends, after all, we’re targeting common interests, goals, lifestyles, and we have conversation to vet ideals and standards before making a choice of doing the business of investing time in the conversion to friendship, although even I would agree tactics in this case would be ill advised if you’re seeking a long-term friendship.

This is more substantive objection, and one that deserves a response.

Equating social networking with offline networking is fraught with danger for the marketer for two reasons: nature of communication, and social context.

Nature of Communication

You hear what I'm showing to you?

Exchanging business cards offline is in no way the same thing as following someone on Twitter, which itself is different than friending each other on Facebook.  To equate the conversation that precedes exchanging business cards with conversations that happen online is to ignore the profound differences between those two conversations.

Human beings communicate with far more than just words.  In fact, research indicates that only 7% of the meaning in a communication is conveyed through words.  Tone of voice accounts for 38% of the meaning, and 55% of the meaning comes from “visual” cues — such as body language, facial expressions, dress and appearance, and so on.

This means that prior to the exchange of business cards, two people have received 93% of the meaning from even a brief face to face encounter.  Prior to following someone on Twitter that you have never met before, none of that exists.  Not to take this into account when constructing a “marketing strategy” is simply irresponsible.

A marketing strategy based on putting on events and seminars, which allow for personal face-to-face contact, should look very different from a marketing strategy based on networking through mere words. You might be able to get away with a dirty joke in person because of your appearance, your folksy tone of voice, your personal charisma, your body language, whatever.  That just ain’t gonna fly in most online contexts.

Not all conversations are the same; therefore, not all conversation-based marketing strategy can be the same.  What works in one situation does not necessarily work in a different situation.  A strategist considers these factors.

Social Context

Someone attending a networking event is presumably doing so to meet people he doesn’t already know; at a minimum, it is expected that strangers might come up to you and try to engage you in conversation in the hopes of striking up some sort of a business relationship.  The expectations are well understood on both sides.  Going up to a stranger, introducing yourself, and striking up a conversation is likely acceptable in all networking events — even if the conversation is aimed at selling and both parties fully understand it.

Marketplace?

Conversely, someone attending church is not there to learn about possible new business contacts, new products or services, or real estate for sale.  Yes, a relationship can start at church and evolve into something more, but the social context is critical.  Plus, for what it’s worth, most folks would look at the sales guy coming to church with a networking strategy to get in good with the appropriate influencer with a gimlet eye.  It happens, of course, but the salesman in that scenario is basically deceiving his “target” — pretending to a religious interest that he does not possess.

Most of us who have been around the Web for a while know that there is a tremendous difference in social context between sites like LinkedIn and Facebook.

LinkedIn is a business networking site and intended to be one; we expect to send and receive business-related communication.  There is absolutely nothing wrong with someone trying to contact me to sell me something.  A marketer might come up with a strategy for LinkedIn, making more contacts, creating LinkedIn groups, joining groups, asking for introductions, and so on.  Everyone expects it, and if they don’t, they’ll tell you with the little “Interested In” section on their profile.

Facebook, on the other hand, may have become more important for marketing, but at its heart, it is a social site intended for students at college campuses to exchange messages, pictures, videos, and so on.  It is far more personal than business.  And as a result, there is something uncouth with someone trying to sell me on Facebook; there is something sort of creepy about trying to network with me for a strategic reason.  Fan pages were created primarily as an extension of the core purpose of Facebook as a place for friends to meet each other online.

I submit that in the online world, the underlying technology platform indicates the social context.  Facebook’s platform is all about sharing photos, videos, posting on each other’s Walls, sending virtual gifts, and playing games.  The social context is one of entertainment, fun, and sharing.  LinkedIn’s platform is all about expanding your professional network and doing business — tools like InMail and Get Introduced strongly imply it.  Blogs all have comments, which implies a social context of interactivity, but with a privileged voice — the blog owner/author.  (Blogs without comments are more like online magazines than anything else.)  Message boards imply a social context as well — open to all members without any particular authority in any one member.

Which leads us to…

Twitter is a Great Tool for Building Sphere of Influence

Consideration of the social context, as implied by the underlying technology platform, brings us to consideration of Twitter as a marketing tool.  Jim Marks writes, arguing that I am 180-degrees wrong on this, that:

Imagine, now if I reached out, deliberately and systematically with all my current friends of SOI. These are people who I have a ton in common and the only distance between then now, a total stranger and members of my SOI? (which they will soon be)One conversation.

Twitters’ relaxed social nature facilitates this type of conversation. I ge the opportunity to reach out and meet new people with whom a have a ton in common and my SOI grows strategically and exponentially. Most important is these are people who have a valuable third party reference of my caring and trust worthy character. (which makes them perfect SOI members and possible future clients)

…Now, instead of meeting people over a course of “you make me feel like a natural women,” and inviting them to hang with me ONLINE. I will be meeting people in a designed manner and inviting them to meet me OFFLINE.

What Jim fails to take into account is the underlying platform of Twitter and the social context that it implies.

First, the follow system is a fundamental part of Twitter’s platform, and it strongly implies that people on Twitter already know each other from some other context.  In fact, you don’t have to take my word for it; take it from the makers of Twitter (who hired Common Craft for this):

Click here to view the embedded video.

Twitter’s original intent was to provide a way for friends to keep tabs on each other “between blogposts and emails”.  That explains so much about its platform.

Second, the text-only, 140 character limitation further strongly implies the social context of Twitter.  Between people who already know each other, “people who matter to her” according to the video above, 140 characters of text is plenty for short updates.  With strangers, that limit is quite significant.

Using Twitter as a marketing tool pretty much requires a separate destination — typically a blog.  The 140 characters can be used to entice someone to click on the link and hit the actual marketing material, the blog post.  Used in this way, Twitter is far more akin to a text link ad than anything else; there is a place for it, but I dare say that if that’s the cornerstone of your marketing strategy, you’ve got issues.

The underlying technology, and the social context it implies, means that using Twitter to meet new people in a target market — especially for a realtor who has a geographically limited market — is somewhat like using a spoon to eat a steak.  It can be done, but boy, you sure do have to work real hard at it for minimal gains.

Lacking LinkedIn’s “Get Introduced” module, reaching out to someone you don’t know but one of your follows/followers does know is a more delicate affair.  You have to assume that they are using Twitter for its intended purpose: keeping tabs on people they already know and matter to them.  You don’t matter to them, yet.  Inserting yourself into that conversation, then, requires that you actually care about whatever it is that they are talking about (or at least fake it real well).  Doing that “strategically” with an ulterior motive in mind strikes me as being very similar to going to church to sell real estate.  Sure, it can be done, but you’d better have the right touch.

Finally, since Jim’s point is specific to the real estate world’s concept of “sphere of influence”, we have to consider whether Twitter really is the right tool for expanding one’s SOI for a real estate agent.  There are no geographical limiters on Twitter, nor are there groups.  Hashtags might serve as a pseudo-geographical grouping, but that assumes a level of sophistication of knowledge of Twitter on the part of the users.

Then consider that Twitter appears to have hit a ceiling in terms of growth.  From Hitwise, we get:

Resistance Point

Further note that Twitter still only constitutes 0.17% of the total traffic for the United States.  In contrast, Facebook is the dominant player in the “social networking” category on Hitwise, with 58% of the total traffic to social networking sites, which is in turn 9.19% of the total web traffic, or about 5.33% of the total web traffic in the United States.

If you’re in real estate and want to develop a marketing strategy, may I suggest looking to Facebook instead of to Twitter?  Indeed, many of the realtors on my original Inman post commented that they get far more success when using Facebook than using Twitter.

The Medium May Not Be The Message, But It Sure Is Important

The larger point about marketing strategy to be made here, apart from debating whether Twitter strategy is or is not valuable, is that the medium matters.  Different platforms allow for different types of marketing to be effective.

The most obvious example is that television excels at creating an emotional response, whereas print is better for eliciting a logical response.

Click here to view the embedded video.

That gets the blood pumping and the heart racing, doesn’t it?  And here’s print:

The pleasure you get from driving a BMW is the result of fine engineering – always setting the benchmark because it is based on much more than engine power. This is the tradition behind BMW EfficientDynamics. It includes the visionary CleanEnergy hydrogen-powered engine, already used in a number of completely emission-free BMW 7 Series saloons. Also going into production soon is the BMW ActiveHybrid – an intelligent, demand-oriented combination of internal combustion engine and electric motor. And every BMW already includes the multi-award-winning BMW EfficientDynamics technology package as standard that boosts dynamics even further whilst simultaneously reducing fuel consumption and CO2 emissions.

That comes from BMW’s product catalogue. (pdf)  Sure, the copy is written to elicit an emotional response, and the photos sure are beautiful, but a print catalog cannot get the heart racing like a film/video ad can.

The strength of the video medium is in the ability to generate an emotional response — that is what it is best suited to do.  You can use it for an intellectual appeal, of course, having an engineer step through each of the mechanical systems, the innovations, and so on — but that isn’t really its strength.

As a marketer, then, you must take the medium through which you are going to undertake a campaign into account as part of your strategy.

The Internet is a medium, and a fascinating one as it can and often does combine video, print and sound with an interactivity that is wholly missing from broadcast or print channels.  But just because the Web allows for interaction does not therefore mean that its form of interaction is the same as other forms of interaction.  As a marketer, you have to look at the details, decide what the strengths and weaknesses of each channel are, and plan accordingly.

And if you’re an online marketer, then you have to think about some of the details — at least of the fundamental technology platform — of each tool before you strategize about the most effective way to use it.  I submit that Twitter, given its limitations and the technology platform and the social context that the platform implies, is ideally suited as a relationship tool.  It isn’t all that well-suited to be a marketing tool.

-rsh

So I’m becoming familiar once again with the airline and hotel industries in a personal way, and have some thoughts and questions as a result.

Air Travel

It is 2009, and we’re knocking on 2010.  Airlines continue to struggle from what I can tell.  Various carriers are now tacking on $15-20 fees for checked baggage, and United (for one) wants to charge for food.  That’s all good; you gotta do what you gotta do to be profitable.

What I wonder about, though, is why in the 21st century, no airline offers power outlets (except maybe in First Class, which I wouldn’t know anything about).  Maybe the ones I haven’t been on — Southwest, Virgin, etc. — do but the majors I have been on do not.  Almost every single passenger has at least one electronic device that could use the juice, if it’s only a cellphone.  Is it really that difficult to add an outlet to the back of each seat?

In-flight wi-fi access is coming.  All I can say is, Faster Please!

Since I mostly fly Continental, I can honestly say that you can save on the food and just give me a power outlet and wi-fi, and I’ll be a happy camper.

Lastly, I wonder about those food/beverage carts.  Do those things have to be so large such that passengers simply cannot get past them at all?  Are trays completely out of the question?  I’d hate to be the person who has to go to the bathroom while the beverage cart is blocking the aisle.  Actually, I’ve been that guy….

Hotels

Seriously, it’s 2009, and personal wi-fi is easily available.  I have a Verizon MiFi device, for example.  Why are the high-end business hotels still charging $12 a night for Internet access?  I’m looking at you, Marriott, Hilton, and Westin!

Amusingly enough, the budget brands all seem to offer free wi-fi; I assume they take that minimal cost into account in the $69 per night I’m paying for the room.  Meanwhile, the high-end hotels charging $199 a night want to ding me for another $12 for Internet.  Sheesh… all that’s doing is making you look like an idiot and a cheapskate.

On the other hand, the budget hotels that do offer free wi-fi… please invest in some signal repeaters?  Please?  This one here is $90 from Amazon and would let your guests on the third floor actually use that free Internet you’re offering, since all you’ve got apparently is the router somewhere in the main lobby.

And once again, outlets.  Is there some reason why you can’t just place a power strip that costs $5 from Staples next to the beautiful desk instead of making me crawl under desks and unplug various things?  The contemporary business traveler has at least two items he needs to recharge: his laptop and his cellphone.  In my case, I also have the MiFi device.  If I had a camera and a video recorder, that’s two more devices that need to be plugged in.  Give me a power strip for cryin’ out loud.

Miscellaneous

One thing that I know isn’t the airline’s fault, but really bugs the hell outta me are these people who insist on carrying on luggage that really isn’t going to work.  The sight of some guy who stuffed his carry-on to the max and is trying for five minutes to stuff the damn thing into the overhead compartment, while the line behind him grows ever longer makes me wonder about the survival of the species.

Here’s a thought.  At every gate, have a replica of the overhead compartment built.  Before boarding, have every passenger try to put the carry-on into the overhead compartment.  If it takes longer than five seconds, gate check that sucker.  Everyone getting on that flight would appreciate it.

Finally, flying in coach a lot makes me really appreciate the delicacy of this issue.  One full flight I was on recently, the middle seat is vacant, and I see a rather large woman walking down the aisle.  I’m like,”Oh please, dear God, no…” and I felt badly about that.  I don’t hate on people because of their weight or size; who knows what their situation is.  At the same time, the thought of spending four hours with someone’s belly fat rubbing up against my thighs is just not something I’d like to contemplate.

Yes, airline seats are far too narrow for our overweight society.  Yes, we all should lose weight (I can stand to drop a few pounds myself).  But at that moment, when you’re flying from Dallas to New Jersey, and you see someone who clearly cannot fit comfortably into a single middle seat walking towards you… none of those considerations really enter the picture, y’know?  I have no real answer to this one, but man… it makes you quickly run through various rules of etiquette in your head as to what is and is not acceptable in situations like that.

Anyhow, just some ruminations from this life of being on the road constantly.

-rsh