ch marketing at Airbnb: Should advertisers be following suit? //

An Wall Street Journal article recently reported that Airbnb’s strategy of cutting advertising spending, investing more in brand marketing, and less relying on search-engine marketing continues to pay off.

Many advertisers are now asking if they can try a similar strategy.

Airbnb began to shift its budget away from search marketing and instead embraced broader marketing strategies in 2019.

According to data from Pathmatics and Semrush, the pandemic has accelerated the change, with social media and video grabbing the largest proportion of digital spend in 2021.

The company also expanded its digital strategy to include OTT and CTV in Q4 2021. This further reduced the budget share for PPC.

Advertisers are now questioning whether abandoning performance marketing channels is the best move, as CPCs have risen across all performance media channels.

Let’s first look at three important considerations before you make a similar leap.

1. How are external forces affecting your business?

The pandemic played an important role in Airbnb’s strategy change.

From April 2020 to November 2020, the company had reduced its marketing budget. It then resurfaced with a strong social media presence.

In December, Airbnb posted video ads reminding customers that it will be there for them when they are ready to travel.

The consumer behavior has changed and Airbnb had to use a medium that would inspire trust and reassure them. Video is a great way to accomplish this.

It is crucial to align your marketing mix with external forces.

Do you want to create a new category? Are you trying to influence consumer behavior?

A shift to branding-heavy advertising might make sense if this is the case.

2. Are you at a tipping point in your career?

95% of all traffic to Airbnb comes from the site. According to Second Measure, their market share is almost 20%.

Airbnb was already at its tipping point. It was already a leader in its category.

Instead of using performance media as a way to attract new customers, they could instead use it as strategic levers to increase supply and demand.

Consider their brand awareness as a large workhorse, and their performance media as fine tuning.

Know where you are going before you decide where to spend your marketing dollars.

Is your site the market leader in your field? Are most of your visitors coming to your site from your category?

If this is the case, it makes sense for brands to put more emphasis on advertising and use performance media to fine-tune their messages.

If you are looking to increase your customer base to get to a tipping point then a stronger performance media strategy is a good option.

3. Are you wasting your money?

It’s also difficult to know how much of Airbnb’s performance marketing budget was spent on the outside.

However, Rakuten Marketing surveys and Commerce Signs show that marketers waste between 25-40% of their marketing budget.

Advertisers may see similar results to Airbnb by cutting wasteful spending and using the money for more marketing initiatives.

To find out where your performance marketing dollars are going, evaluate them. Audits by marketing agencies can also be helpful, but online audit tools are available.

Your unique situation requires you to rethink your marketing mix

It is worth noting that Airbnb still invests approximately 50% of its budget in performance media.

Although their mix has changed from the previous 80%, they still heavily rely on performance media to balance supply and demand.

Advertising agencies should reevaluate the roles of marketing channels as they consider whether to shift budget to brand awareness.

A great way to create a symbiotic relationship in your marketing mix is to allow each channel to use its superpowers.

If you’re considering a strategy change similar to Airbnb, it is important to reflect on your business before making that move.

Consider your market, your category, and consumer behavior. Final, assess any wasteful spend.

If you are ready to jump, test, measure and evaluate your product before making a decision.

The post Airbnb’s shift in search marketing: Should advertisers copy it? was first published on Search Engine land.