As I’ve mentioned before, I live in a Connecticut city that is convenient for people who work in New York. Naturally, over the years property developers have seized on this and erected various apartment buildings within walking distance of the train station, many of which market themselves as “luxury” complexes.
A home would seem to me the type of good that stands on its own merits, the demand for which can’t be impacted much by clever marketing and hype. Though I’ve never been a home owner, I’d assume the main factors people take into consideration in making a purchase would be things like the quality of the construction, the attractiveness of the school district, property tax rates, the prevalence of crime in the area, proximity to public transportation, etc. That’s different from a car, for instance, which is a good that lends itself to all sorts of marketing and branding opportunities that don’t really have much to do with the car’s specs or performance. For many of us our choice of car is about style and personality. The point is that it seems easier for an individual, rightly or wrongly, to make a public statement about oneself to others by means of a car than it would be to signal the same thing by one’s choice of apartment building.
Nonetheless, the luxury complexes where we live are clearly trying to sell a lifestyle and an image as much as they are square footage. Take a look at the four images below, which are murals on the outside of one of the nearby buildings.
What are these murals trying to tell me? I suppose I’d say that the person who lives here 1) is in shape, 2) is successful, 3) looks good in a bathing suit, or 4) is commonly flanked by beautiful women (when male). Note that there is nothing in these ads about the space itself. Is it spacious? What are the amenities exactly? When was it built? How are the neighbors? Not sure.
This next image is a giant mural plastered on the side of a twenty-story residential building that has become (somewhat sadly) an iconic image of our downtown area. It’s bit more subtle than the ones above, but even more impressive in terms of its unabashed absurdity.
What do I find so interesting about this image in particular? First, it has what seems to be the staple of any luxury complex attempting to up-sell itself: An attractive woman in a bikini. But never mind that. Take a look at the image in the very top left, which features a man apparently whispering a secret into the ear of an intrigued young woman, and the woman next to her literally turning up her nose with confidence. These subtle features of the ad are not accidents, of course, and the only conclusion that I can draw is that its designer is trying to convey the notion of exclusivity. If you live here, you are in on the secret, it seems to imply. Of course, if the imagery is too subtle for you, the ad makes absolutely sure you get the point by putting the word RICH in capital letters at the bottom. Maybe the true intended message is, If you live here, you’re rich like us.
This type of advertising is everywhere, of course, and is not at all unique to luxury apartment complexes. Very rarely these days do you see ads provide only basic information about a product; almost invariably, they seek to elicit a certain emotion to motivate the consumer, or to sell some sort of intangible “good” alongside the actual good that’s being explicitly advertised (like, for instance, a feeling of social exclusivity to go along with a condominium).
Shouldn’t advertising simply be about stating the facts? From the perspective of economic theory, not necessarily. The basic thinking on advertising among economists is that it is useful not only to provide information about a product, but to send a credible “signal” to consumers. So, for instance, a manufacturer of good-quality televisions wants everyone to know that its products are good quality, and not the same as the other junk out there on the market. So it embarks on an expensive ad campaign to get the word out about the superior quality, possibly even through describing a subjective “feel” when you watch the television, rather than the underlying technology. If the quality is truly good, it will have been worth the expense for the company to try and get the word out via advertising. But if a poor-quality TV manufacturer would try the same thing, it would just end up wasting its money as the market would eventually realize that the high-quality advertising claims were unfounded. In that sense, the high quality TV maker spends money on advertising to distinguish itself from the pack.
So advertising has a very clear role here, in that it can allow a product to signal to the customer something unique about itself. And one can make the argument — at least based on theory — that it can be entirely legitimate for ads to convey feelings rather than just facts.
But the problem in this case is that the real estate ads shown above feel like something other than the property developers simply trying to get the word out about the quality of their product. Sure, there is signaling going on here. Indeed, the ads, send a signal to the market that they are fundamentally different than the rest, in that they offer something more than just four walls. But what if that “something more” is purely imaginary and has nothing to do with the product, unlike a television which offers, for instance, a clearer picture? Worse yet, what if that “something more” — the opportunity for the owner/resident to feel exclusive or superior to others — is actually detrimental to society?
This style of advertising is everywhere and does not fit neatly into the “signalling” model described above. One egregious example is beer companies and other producers of goods with male customer bases, which for years have capitalized on men’s desire for sex by insinuating a link between consuming their products and success with gorgeous women. In a supremely funny yet sad recent example of this, a popular web-hosting service has employed an ad strategy featuring a famously beautiful female race car driver in a bikini. I don’t know what half-naked women have to do with buying a web domain, but I’m sure it has something to do with the fact that the target demographic is mostly young males.
Not only is this blatantly stupid and dishonest, but it’s also a potentially destructive message. Most of us know that where we buy a web domain from has nothing to do with success in attracting women, of course. Yet, advertisers continue to link products with all sorts of emotional desires and fears for which their is no clear association. It’s hard to imagine this strategy isn’t working, simply because it’s hard to imagine these companies throwing money away year after year on unsuccessful ads.
As for my own personal examples, maybe I’m just overestimating the power of corny real estate ads to persuade apartment hunters to overspend. Walk by the aforementioned giant mural at night and you’ll see more than just an oversized sales pitch plastered on its side. You’ll also see a majority of apartments whose windows are dark, and whose rooms are likely uninhabited. That at least provides a small sense of satisfaction to someone like me, who can’t help cringing at something as seemingly harmless as a real estate ad.