Our experts’ take on Airbnb

In 2020, the travel industry was halted as a result of the pandemic. In fact, Airbnb lost about 80% of its business overnight. To navigate this unexpected shift, Airbnb shifted its marketing efforts to focus on driving awareness of the brand while lower funnel results were put on hold given the lack of consumer demand. This meant cutting their marketing expenses by 28% year over year by simply removing campaigns that focused on conversion-focused actions. With this strategy in market for two years, Airbnb posted their most profitable quarter in 2022, and in year three, they reported a 22% increase in brand value according to Omnicom’s brand consultancy, Interbrand. 

In a recent Airbnb earnings call, the company’s leaders applauded the results they are seeing with this approach. Airbnb’s Chief Financial Officer, Dave Stephenson, noted how the “brand marketing results are delivering excellent results overall with a strong rate of return.” And Brian Chesky, Airbnb’s CEO, shared “we think of performance marketing as more of a way to laser in to balance supply and demand rather than a way to just purchase a large amount of customers.”

Given the sheer volume of press Airbnb has received over the last three years for its brand-forward marketing approach, we dug in to understand if all the buzz is really warranted. Our experts, Abby McNally, Director of Connections Strategy and Brand Media, and Lauren Beerling, Director of Performance Media, shared their “hot takes” on why Airbnb’s marketing strategy is not a playbook that all marketers should necessarily follow.

Airbnb is a household name

When citing the success of their approach, Airbnb called out that “90% of their traffic arrives to their platform directly.” At first glance, this is a truly impressive feat. However, when looking a bit closer, Abby McNally points out that “Airbnb is a household name with a website that many consumers know and a popular app that would fall into this ‘direct traffic’ category. It makes sense that users would forego a Google search and go straight to the website or app.”

However, this isn’t a luxury that every brand can count on. And it took major investment — in both brand and performance media — to get Airbnb to that level. Many brands are still reliant on conversion-driving media to capture revenue today, which then fuels brand media investment in the future.

Airbnb has a significant marketing budget

Understanding the context of Airbnb’s pullback is also crucial. While they have reduced their performance marketing efforts, they haven’t specified how much they have pulled back. “Airbnb has much heftier marketing budgets than most advertisers,” Lauren Beerling called out. For context, according to Semrush, Airbnb is still investing between $800K and $1.5M per month in paid search.

“While they have decreased their spend within the performance sector, there is also a diminishing return on paid search where campaigns are just reaching consumers that would have interacted with the brand without the influence of any marketing,” said Beerling. “To me, this suggests that Airbnb’s historical media mix was overinvested in paid search.”

Our key takeaway

“Overall, rebalancing their media mix to integrate brand media and leaning into value-based messaging that can change perception is the right thing to do,” McNally shared. “It’s not surprising that it’s working, especially given their awareness in the marketplace. However, with all the variables in the travel industry over the last four years, I don’t think all their success can be attributed to their marketing approach alone.”

“It’s refreshing to see a brand doing exactly what we preach with the balanced media mix and seeing that come to fruition with results,” Beerling said. “However, for most clients, taking their current search budget and reallocating it to the upper funnel isn’t going to be enough to move the needle. Unless you’re a massive company with lofty budgets and millions of dollars to reinvest, it’s going to be a much harder sell. Many companies have to lobby for incremental budgets to do brand media correctly and at a spend that actually makes an impact.”

Needless to say, this isn’t a new or groundbreaking concept. It’s pretty much media 101 in action — but it’s far easier said than done. And it’s far easier done with tens of millions of dollars to play with like Airbnb. For marketers following Airbnb’s marketing efforts in the headlines, we recommend proceeding with caution: This is a great case study that many will examine and talk about based on Airbnb’s execution but it should not be a playbook that just any brand can pick up and use.