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Airbnb CEO: Because of our brand strength, we can maintain a stable marketing spend as a percentage of sales.

According to CEO Brian Chesky, Airbnb’s strong brand, created through a concentration on top-of-funnel activities, allows the company to maintain its marketing expenditure as a percentage of sales at the same level year after year.

 

Airbnb claims that its investment in brand creation, which has resulted in the company being a “noun and a verb,” has allowed it to maintain the same level of marketing investment as a percentage of sales.

“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 on (3 August).

The company recorded its most lucrative second quarter ever, with net income of $650 million (£512 million) for the three months ending 30 June, up $271 million (£213 million) from the same time in 2022. Its sales for the quarter increased 18% to $2.5 billion (£1.97 billion).

 

Airbnb reported a nearly 30% rise in marketing cost in the first six months of 2023 compared to the previous year; but, it aims to keep marketing as a percentage of revenue consistent with last year, having shifted more of its year’s investment to the first half.

 

The travel hotel industry declared in February 2021 that it will make a permanent drop to overall marketing spending after observing that reducing spending during Covid had little effect on traffic. The reduction means shifting expenditure away from performance marketing and SEO and toward brand and public relations.

 

This emphasis on public relations was realized in the first half of 2023 with activities such as the listing of a Barbie Malibu Dreamhouse on Airbnb. This was part of the brand’s ‘Only on Airbnb’ promotion, which aimed to highlight distinctive properties on the marketplace.

According to Airbnb, the Barbie Dreamhouse is now the most popular listing ever. Chesky claims that the program produced 13,000 press hits, which is more than double the number generated during the company’s IPO.

 

Making Airbnb “a topic of conversation” in this way is a vital component of the firm’s full-funnel approach, according to the company. Airbnb has become “a noun and a verb” as a result of investment to ensure the brand is spoken about, according to Chesky.

 

Brand building through channels such as public relations is also critical to the brand’s expansion in regions around the world, according to chief financial officer Dave Stephenson, who cited the company’s success in Germany and Brazil.

 

“This full-funnel approach is critical.” “We’re making sure we have all of the elements, social, celebrity, brand, and search engine marketing,” he explained. “We frequently begin in some of these markets with just search engine marketing, but that’s too narrow; we need the entire funnel.”

Airbnb claims to be receiving “great results” from its brand channels and that it is attempting to optimize the channel and audience mix.

 

90% of the company’s traffic now comes from direct sources rather than paid performance channels. However, where performance marketing is used, the company is still seeking to increase the return on investment.

According to Stephenson, the “major shift” in marketing investment toward brand and away from reliance on performance has helped Airbnb to enhance overall profitability.

 

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