According to CEO Brian Chesky, Airbnb's strong early-bird brand means the business can keep marketing costs as a percentage of revenue each year.
Airbnb says that the brand investment that makes Airbnb a "noun and a verb" has enabled the same marketing investment as a percentage of its revenue.
"Over time, we've achieved a fairly stable level of marketing spend as a percentage of revenue based on the strength of the brand," CEO and founder Brian Chesky said on an overnight call with investors (August 3).
The brand posted its most profitable second quarter ever, with net income of $650m (£512m) in the three months ended June 30, up from $271m (£213m) in the same period in 2022. Quarterly revenue rose 18% to $2.5bn (£1.97bn).
Airbnb reported a nearly 30% increase in marketing spend in the first six months of 2023 compared to last year. However, marketing as a percentage of revenue is expected to be the same as last year, with spending being heavier in the first half of the year.
This year's cuts mean investment has shifted from effective marketing and SEO to branding and PR.
This PR streak has come to fruition through initiatives such as listing Barbie's Malibu dream home on Airbnb in the first half of 2023. It was part of the brand's "Only on Airbnb" campaign, which aims to showcase unique homes on the platform.
Barbie's dream home is now the most popular Airbnb property. Chesky said the initiative generated 13,000 press releases, more than double the number the company received when it was first announced.
The company says that making Airbnb "a talking point" is a key part of its overall approach. According to Chesky, Airbnb has become a "noun and a verb" as it invests in building the brand.
Airbnb CFO: We were right to shift costs from efficiency to brand building.
Branding through channels like PR is key to building a brand in global markets, CFO Dave Stevenson says, citing the company's success in Germany and Brazil.
"This whole approach to the puzzle is fundamental. Make sure we have all the elements, social media and celebrity, brand and search.” "In some of these markets, we often start with research, but it's very narrow and we need a full funnel."
Airbnb said it has seen good results from branded channels and is working on channel and audience optimization.
The company now receives 90% of its traffic directly from paid performance channels. However, he said he is still working on improving ROI where he uses effective marketing.
Stevenson said a "huge shift" in marketing spending and a move away from reliance on performance has allowed Airbnb to increase overall profitability.
