Airbnb brand advertising spend pays off, PR attributed as biggest driver

Online retail player Airbnb is satisfied with its return on investment in advertising even as it cuts ad spend. According to the company’s executives, investment in brand marketing, rather than search-engine marketing has paid off for the company. 

The company’s chief financial officer Dave Stephenson said: "In terms of advertising ROI, we're really pleased with our approach to the marketing strategy that we've had. Our brand marketing results are delivering excellent results overall with a strong rate of return. And it's been so successful that we're actually expanding to more countries."

"And so that's what still be seeing over the course of the next year, is to expand more countries to support our brand advertising," he added. 

MARKETING-INTERACTIVE has reached out to Airbnb for additional information. 

When asked if the company would consider flexing down its advertising spend in a tougher macro environment versus investing into that environment to continue to teach the customers about its ever-expanding product set, Stephenson said the company ad spend is going to be relatively flat from 2022 compared to 2021, "you should anticipate similar marketing as a percentage of revenue in 2023. And so we can certainly flex it in line with revenue," he said.

"But we've already kind of hit this new kind of lower overall rate. And what we've actually seen is, to the extent that we're keeping it flat even as we grow, it's because we're actually seeing such success that we're wanting to be able to invest in other countries. Certainly, we can moderate that over time, but we're already so low that I wouldn't anticipate us dropping it dramatically in face of substantial headwinds over growth, but we can flex it with the revenue within a reasonably a few hundred basis points here and there," he added. 

Instead of using marketing as a means to “purchase” customers, Airbnb has turned to taking a full funnel approach to marketing, including PR in communication as more than 90% of its traffic is correct or organic, according to Brian Chesky, co-founder and CEO of Airbnb. He said:

We think that's one of the biggest drivers of our traffic is PR. And then brand marketing is actually important. And actually, we think a bit more like product marketing. We want to educate people about our new features. 

"So right now, we're advertising and educating people about Airbnb Categories and AirCover. And then we think of performance marketing as more of a way the laser in to balance supply and demand rather than a way purchase a large amount of customers. And that's essentially the way we think about marketing. And this allows for a very efficient, very dynamic approach to marketing that should get more efficient every single year," he added. 

Airbnb has imposed several changes in its marketing strategies in recent years. Back in 2020, Airbnb was reportedly halting its marketing activities and freeze hiring. The move was said to save Airbnb US$800 million in 2020, according to Reuters, which also reported that Airbnb's founders had forgone their salary. Meanwhile, senior executives have also taken a pay cut of 50%, it added. Quoting Airbnb, Reuters also said that the company was "resilient and built to withstand tough times" and it was undergoing all efforts to strengthen the community and company. 

In a statement to MARKETING-INTERACTIVE, an Airbnb spokesperson said the COVID-19 outbreak has resulted in unprecedented travel restrictions and other disruptions that have a direct impact on the travel and tourism sector and beyond. "We believe travel will adapt and recover in the long run. Our focus right now is on how we can best support our stakeholders as they are impacted by this pandemic, including hosts, guests, employees and the communities in which we operate," the spokesperson added. 

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