How will residential communities be affected by future corporate branding

Out of home (OOH) advertising (also referred to as outdoor advertising) is advertising that consumers may come across outside of their home. It includes billboards, posters and wallscapes.

However, companies also use sponsorship to promote their brands. Out of sponsorship often comes naming rights which can be used to integrate a company’s identity into a new or existing location, event, or product. Some feel that it could go as far as companies tagging their name onto established residential estates. But how realistic is this and how could it impact communities?

What’s in a name?

Companies associating their brand with events or buildings, etc., is nothing new. The Two Oceans Marathon, for instance, has had its fair share of sponsors tagging their name onto the internationally acclaimed race, including Old Mutual and now more recently Totalsports.

Stadia dotted around South Africa have also had brand names associated with them. Ellis Park Stadium, for example, is also known as Emirates Airline Park, while DHL acquired naming rights for Cape Town Stadium.

So, would it be too much of a stretch to see residential estates associated with brands? It would, after all, just be an extension of what’s already taking place and has worked well for numerous brands.

To some degree this type of sponsorship already exists in residential estates, with insurance companies sponsoring clubhouses, Veuve Clicquot attaching their name to Val de Vie’s brunch polo series, while Mount Edgecombe Retirement Village has in the past enjoyed Investec’s support.

Pros and cons

A brand’s influence or ‘stamp’ could affect property prices. If a prestigious brand, such as a luxury goods brand, were associated with a residential estate, there could be positive transference to the location, which could potentially make it more desirable to live in.

The inverse is true for brands that are dubbed as sin taxes – ones that promote alcohol and cigarettes, etc. These types of brands could make an area less desirable to live in. Companies with a contentious product such as alcohol could also stimulate more consumption, which could impact the community’s health in the long term. Reputational risk can also impact on the brand itself. If a residential community becomes undesirable, for instance because of an increase in the crime rate in that area, there’s a good chance that a brand would pull out of the sponsorship to disassociate itself from any negatives within the community.

Possible investment

Another positive of a brand taking up ownership of a community would be the potential windfall. A company could offer up a cash injection to the community in exchange for their name associated with the residential estate’s name, or potentially to have carte blanche in spaces where their products or services could be advertised through OOH. Any cash injections of this nature could mean an improvement on infrastructure and services such as clubhouses, schools and playgrounds.

However, the con to this could result in an intrusion on freedoms. Depending on how the deal is structured, companies could become an influence on rules of the estate or get veto rights on community choices, negating community democracy.

‘It requires an impact assessment to be done. If it is done by the community, it may have different outcomes to what the brand may determine,’ says a commentator who refuses to be named.

Realistic prospects

Another knowledgeable commentator in the industry, who has had roles ranging from investing to advising, structuring and lending, tells Estate Living that, to his knowledge, there hasn’t been an instance of a corporate attaching their name to estates of any kind – yet. But he agrees that ‘softer’ or partial branding can be found in such communities. He adds: ‘The general trend is for corporates to concentrate on corporate social investment (CSI) responsibilities.’

CSI goals, particularly those that want to uplift poorer communities, could result in many companies not wanting to be associated with ultra-luxury estates. However, mixed estates could benefit from such relationships if what they do and represent marries up with company’s CSI ambitions.

Others point out that it’s difficult to retrofit a name to an existing and recognised neighbourhood, which will result in the branding exercise coming to a stop before it’s even begun. People, after all, love shortening a name as they talk about the event or place.

So Totalsports Two Oceans quickly becomes ‘Two Oceans’ and the brand associated with the race gets lost, which is not ideal if you’re already investing millions in the surrounding infrastructure and services.