Sustained Market Success: How Airbnb's Strong Brand Delivers Optimal Marketing Investment

Airbnb's investment in brand building has resulted in it becoming both a noun and a verb. This achievement has allowed the company to maintain a consistent level of marketing investment in relation to its revenue. During a recent call with investors on August 3rd, CEO and founder Brian Chesky emphasized the strength of the brand as a key factor in this ongoing marketing strategy.

The brand achieved its highest ever second quarter profit, with a net income of $650m (£512m) for the three months ending 30 June. This represents a $271m (£213m) increase compared to the same period in 2022. Additionally, the company's revenue for the quarter grew by 18% to $2.5bn (£1.97bn).

In the first half of 2023, Airbnb witnessed a significant rise of almost 30% in its marketing expenditure compared to the previous year. However, the company plans to maintain its marketing spend as a percentage of revenue at the same level as last year. This decision was made by allocating a larger portion of the marketing budget to the first half of the year.

In February 2021, the travel accommodation business made a significant decision to permanently reduce its marketing efforts, as it observed that reducing expenses during the Covid pandemic did not significantly affect website traffic. As a result, the company redirected its investments from performance marketing and SEO towards brand and public relations.

This emphasis on public relations has manifested in various initiatives during the first half of 2023, such as the inclusion of a Barbie Malibu Dreamhouse listing on Airbnb. This particular campaign, known as 'Only on Airbnb,' is designed to highlight distinctive and one-of-a-kind homes available on the platform.

The Barbie Dreamhouse has become Airbnb's most popular listing to date, according to the company. Chesky stated that the initiative garnered 13,000 press mentions, surpassing the number achieved during the company's initial public offering.

This strategy of making Airbnb a prominent topic of discussion is an essential component of their comprehensive approach, the company explained. As a result of their investment in ensuring the brand is widely discussed, Airbnb has become not only a noun but also a verb, according to Chesky.

Brand growth in global markets is crucial to the company's success, according to Chief Financial Officer Dave Stephenson. He emphasized the importance of brand building through channels like PR, highlighting the company's achievements in Germany and Brazil. Stephenson stated that a comprehensive approach, including elements such as social media, celebrity endorsements, brand marketing, and search engine optimization, is essential for success. He also mentioned that starting with only search engine marketing is too limited, and a broader approach is necessary.

Airbnb stated that it is experiencing positive outcomes from its brand channels and is actively striving to enhance the combination of channels and target audience. Presently, the company observes that 90% of its website traffic originates directly rather than through paid, performance channels. Nevertheless, in instances where performance marketing is implemented, Airbnb continues to aim for improved return on investment.

The “major shift” in marketing spend towards brand and away from reliance on performance has enabled Airbnb to improve overall profitability, Stephenson said.