Airbnb has said investment in brand building, which has led to Airbnb becoming a “noun and a verb”, has enabled it to maintain the same level of marketing investment as a percentage of revenue.
“We’ll have pretty consistent marketing spend as a percent of revenue over time because of the strength of the brand,” CEO and founder Brian Chesky said on a call with investors overnight (3 August).
The brand reported its most profitable second quarter ever, with net income for the three months ended 30 June at $650m (£512m), up by $271m (£213m) versus the same period in 2022. Its revenue for the quarter grew 18% to $2.5bn (£1.97bn).
Airbnb reported an increase in marketing spend of almost 30% in the first six months of 2023 compared to the year prior; however, it expects to keep marketing as a percentage of revenue consistent with last year, having weighted more of its spend for the year towards the first half.
In February 2021, the travel accommodation business announced it would be making a permanent cut to marketing overall having noted that slashing spend during Covid had little impact on traffic. The cut meant shifting investment away from performance marketing and SEO into brand and PR.
This focus on PR has been brought to life in the first half of 2023 in initiatives like the listing of a Barbie Malibu Dreamhouse on Airbnb. This formed part of the brand’s ‘Only on Airbnb’ campaign, which aims to showcase unique homes on the platform.
The Barbie Dreamhouse is now Airbnb’s most popular listing ever, it claimed. Chesky said the initiative generated 13,000 press hits, which is more than double the number generated during the company’s initial public offering.
Making Airbnb “a topic of conversation” in this way is a key element of its full-funnel approach, the company said. As a result of investment to ensure the brand is talked-about Airbnb has become “a noun and a verb”, Chesky claimed.
Brand building through channels like PR is also key to the brand’s growth in markets across the world, chief financial officer Dave Stephenson said, citing success the company has seen in Germany and Brazil.
“This full-funnel approach is key. Making sure that we have all of the elements, social and celebrity and brand and search engine marketing,” he said. “We often start in some of these markets with just the search engine marketing, but that’s too narrow and we need the full funnel.”
Airbnb is seeing “great results” from its brand channels, it claimed, adding that it is working to optimise the channel and audience mix.
The company now sees 90% of its traffic come directly, rather than from paid, performance channels. However, where it is using performance marketing it is still working to drive higher ROIs on this investment, it said.
The “major shift” in marketing spend towards brand and away from reliance on performance has enabled Airbnb to improve overall profitability, Stephenson said.