In the late 1990s, I landed my first “real job” after graduating college. It was an Account Executive role at CBS Radio in Boston. The job was selling spots, or commercials. Though classically parodied, the role is appropriately summed up by Billy Crystal in the movie City Slickers.
My responsibility was to engage with businesses and advertising agencies, promoting the merits of reaching a broad audience (i.e. men 25-54 years old, or women 18-34 years old) by running commercials on the radio stations that targeted those audiences. Arbitron, the radio ratings superpower, measured the stations and provided the rankings and audience numbers.
The buying process was mostly manual. I would drive around the Boston area meeting with local businesses and advertising agencies to tout all of the benefits of advertising on the radio. Some of the benefits were tied to business results, of course, but others included tickets to concerts, events with the radio personalities, and on-air interviews. It was a game of hustle, not data — it was all about numbers and my target was 15 meetings per week. I have vivid memories of standing over the fax machine (a machine that transmitted and received data and printed documents via telephone line), waiting for the contracts to come in.
Digital media buying wasn’t much different at its inception. Sellers would sell blocks of space, or banner ads on websites based on the expected (or maybe the known) profile of the typical consumer of the content.
Then something magical happened. Technology evolved and data exploded. Suddenly, there was a huge spike in efficiency and intelligence of media buying. This is what I spent the bulk of my time working on while at Google.
Buyers and sellers were both skeptical and concerned about their job security. They wondered if the machines would replace the humans. But we’ve learned over time that technology tends to create jobs, not replace them. Today, most digital — and much of the traditional — advertising we see is bought and sold programmatically. The profile of the buyer has changed to be more data-driven and strategic. The days of relationship-driven sales, wining and dining, and approximating audiences based on content are quickly fading.
This is the opportunity in commercial real estate (CRE). The industry has been slowly evolving, leveraging more technology and capturing more data. One area that has been largely missed until recently is the user of the product. Finally, CRE owners and operators are seeing the value in understanding more about the occupants of their building.
By using technology and data to create efficiency and intelligence in the ecosystem, CRE can get smarter and more data-driven in decisions that have real impact on NOI, cap rates, and more.
Imagine that you own a multi-tenant commercial office building. The building is 80% leased at rates that are generally aligned with the current market. Across the street, there is a similar building with similar tenant mix, amenities, vacancy, and rents. Other than price, how will you compete for the tenants that will increase your occupancy?
The answer is through data-informed strategies enabled by technology. In this scenario, let’s say that you have a platform like HqO deployed. You can look at data in the Digital Grid to understand how your space is being used. You can benchmark your amenities. You can survey the building population — not just the tenant reps, but everyone in the building — in real time to get their opinions on value additions to the asset. You can deliver programming directly to occupants and/or partner with the HR teams on strategies to drive employee attraction and retention. Instead of offering just a 10,000 square foot office space, you’re now offering a partnership that is based in technology and data.
Just as data and technology transformed advertising — from slow and dumb to efficient and intelligent through going programmatic — so too will “programmatic real estate” transform CRE. This change will require new skills to be developed across the industry and engagement at scale in a way that wasn’t even possible, never mind contemplated only a few years ago. It’s an exciting time for change!