According to a recent Wall Street Journal article, "Airbnb's strategy of cutting ad spend, investing in branded marketing, and reducing reliance on search engine marketing continues to pay off."
The announcement has caused controversy among many advertisers, who wonder if a similar strategy can work.
In 2019, Airbnb began reallocating its budget from search engine marketing to broader marketing initiatives.
The pandemic has accelerated change: According to data from Semrush and Pathmatics, video and social media will account for the largest share of digital spend in 2021.
In the third quarter of 2021, the company expanded its digital strategy to include OTT and CTV and further reduced its share of the PPC budget.
As CPC grows across all performance media channels, advertisers are wondering if moving away from performance marketing channels is the right move.
But before we take that leap, let's take a look at three important points.
1. What external forces are affecting your business?
The pandemic has been instrumental in changing Airbnb's strategy.
The company cut its marketing spend from April 2020 to November 2020, when it reemerged with a strong social media presence.
Then, in December, Airbnb reminded its customers with a video ad that the brand would be there when people were ready to travel.
Consumer behavior has changed and Airbnb needed to create an environment that fosters trust and confidence. What could be better for that than a video.
It's important to stay aligned with the outside forces affecting your marketing mix.
Create a new category? Or try to change consumer behavior.
If this is the case, then a switch to mass advertising could make sense for the brand.
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2. Have you reached the breaking point?
Ninety percent of Airbnb traffic goes directly to the site. According to Second Measure, their market share in space is close to 20%.
Airbnb has already peaked. His category was well known and he was the leader in that category.
Instead of using performance metrics to acquire new customers, they can use them as strategic levers for supply and demand.
Think of spending on brand awareness as a means of working and high performance.
Before deciding what to spend your marketing budget on, figure out where you're coming from.
You are the leader in your category. Do most of your visitors come directly to your website?
Then it makes sense to focus more on brand advertising and to use effective media to improve it.
However, if you need to reach more customers to generate profits, consider a more effective media strategy.
3. Have you been a bad lender?
After all, it's hard to tell from the outside how much of Airbnb's performance marketing spend has been wasted.
But surveys by Rakuten Marketing and Commerce Signals show that marketers typically waste 25-40% of their marketing dollars.
Reducing this unnecessary spend and reallocating funds to broader marketing initiatives can give advertisers the same impact as Airbnb.
Evaluate your current performance marketing spend to find unnecessary spend hidden in plain sight. Online audit tools can be helpful, as can marketing agency audits.
Rethink your marketing mix based on your unique situation.
It should be reiterated that Airbnb spends about 50% of its budget on efficiency efforts.
Though their mix has changed from the previous 80%, the company still relies on high-performance media to balance supply and demand.
As advertisers try to align their budgets with brand awareness, the role of marketing channels needs to be reconsidered.
Allowing each channel to use their own superpowers can create amazing symbiotic relationships in your marketing mix.
So if you're considering changing an Airbnb-like strategy, it's important to think critically about your business before making a move.
Think about your category, consumer behavior and market position. Finally, evaluate unnecessary expenses.
And when you're ready to take the plunge, don't forget to test, measure, evaluate and repeat.
The opinions expressed in this article are those of the guest author and not necessarily those of Search Engine Land. The employed authors are listed here.
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