Airbnb says its anti-search marketing strategy is working

The news: Airbnb recorded its most profitable quarter yet, attributing some of its success to its move away from search marketing and towards brand campaigns. The company’s revenue rose 29% year over year, beating analysts’ estimates.

Anti-performance marketing: In 2019, Airbnb decided to cut spending on search and other performance-based marketing and instead focus on larger, brand-driven ad campaigns.

  • This meant an overall reduction in ad spend. In the first quarter of 2021, ad spend fell 28% year over year. Advertising spend remained a lower overall portion of the company’s spending, although it increased advertising year-over-year in the past two quarters to capitalize on the summer travel boom.
  • According to the CEO Brian Chesky, 90% of Airbnb traffic comes directly, not through search. Instead, its ad spend has been used for brand campaigns that educate consumers about various services offered by Airbnb.
  • But while it worked for Airbnb, it may not be replicable for other companies in the travel industry. Airbnb is a big, well-known brand, and it was even before it changed its marketing strategy. In fact, the travel industry typically spends After on post-lockdown search advertising, although its overall share of total digital ad spend is slowly declining.

Airb-n-bumpy: A summer return to travel has helped the industry pull through record profits after a brutal crisis induced by the coronavirus. But as the holiday season approaches, the outlook for travel is darkening.

  • Inflation and fears of a winter surge of COVID-19 are hampering holiday travel. Sixty-nine percent of consumers are concerned about inflation when it comes to travel, according to a WalletHub survey.
  • A brand-focused marketing strategy could help Airbnb weather this downturn. Many industries are cutting back on advertising spend due to economic concerns and instead choosing to promote their brands or contact consumers directly to build and maintain relationships. Airbnb is well positioned to make a similar pivot.

William L. Hart