Brand marketing pays off for Airbnb | WARC | The Feed
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Brand marketing pays off for Airbnb
Focusing on its brand is paying off for Airbnb, the digital accommodation platform, which is now using performance marketing as a “laser-focused” strategy.
Airbnb posted strong quarterly results over the last three-month period, including:
- 100 million nights and experience bookings, up 25% year on year.
- Gross booking value of $15.6bn, a 31% annual increase.
- Revenue standing at $2.9bn, a lift of 29% versus 12 months earlier, and its highest ever figure of this metric.
- Net income standing at $1.2bn, a $400mn year-on-year spike, and its most profitable quarter.
- Dave Stephenson, Airbnb’s chief financial officer, said on an earnings call that the company has “radically adjusted our marketing expenditures to be substantially lower”.
- More specifically, this shift – which began before the onset of Covid-19 and accelerated during the pandemic – involved a heightened “focus on the overall brand of Airbnb”.
- That means being ”less reliant on search engine marketing” – an outcome encouraged by the fact that 90% of Airbnb’s traffic is direct or unpaid, with PR playing a vital role here.
- This is “driving a great return on investment for new, active bookers,” Stephenson said, with these users performing as well, and often better, than those before the pandemic.
- “In terms of advertising ROI [return on investment], we're really pleased with our approach to the marketing strategy that we've had,” he added.
Education is important
Brian Chesky, Airbnb’s CEO, suggested that brand marketing is an important way to “educate people about our new features”. These features include Airbnb Categories, allowing users to discover “one-of-a-kind” destinations, and an insurance product called AirCover.
Airbnb Experiences, meanwhile, gives users the chance to purchase on-the-ground activities, and is another point of focus.
“The great thing about Experiences is we don't have to have very much incremental investments to make this work,” Chesky observed. “It's really just a matter of incorporating Experiences more into our existing marketing, and incorporating Experiences more into our existing products.”
Role of performance marketing
Against this backdrop, performance marketing – often a focus of digital-first companies early in their history – assumes a different role.
“We think of performance marketing as more of a way to laser in, to balance supply and demand, rather than a way to purchase a large amount of customers,” Chesky said. This evolution, he continued, “allows for a very efficient, very dynamic approach to marketing that should get more efficient every single year”.
- The impact of Airbnb’s brand marketing has encouraged the organisation to roll it out more broadly in 2023.
- “It's been so successful that we're actually expanding to more countries,” Stephenson said.
- With regards to expenditure, “you should anticipate similar marketing as a percentage of revenue,” he continued. “And we can certainly flex it in line with revenue.”
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