After a tough year for the travel industry, the home-renting company has made the decision to focus budgets on different areas within marketing.
With recent developments in the various COVID-19 vaccinations, it seems the travel industry is getting its plans in order for what should be, coronavirus permitting, a huge increase in revenue.
What led Airbnb to make the decision?
Brian Chesky, co-founder and CEO of Airbnb said: “We are never going to go back to spending the same amount of money on marketing as a percentage of revenue as we did in 2019.”
Obviously thinking about the future, the company has decided to take its focus away from data-driven marketing. However, in the more distant future, how will this decision take effect?
Performance marketing was, in the past, an effective tool for the company. This is evident, as in 2019 they increased marketing spend by $474m, including $314m on performance marketing and $160m on brand marketing.
Dave Stephenson, CFO of Airbnb, commented that the company will continue to use performance marketing “where it makes economic sense to do so.”
It will be interesting to see how this decision pans out for the company. It cannot be certain that brand marketing will prove successful for them.
The decision is not a complete surprise. Many brands cut their marketing spend in the months following the beginning of the pandemic.
However, the seemingly final decision on performance marketing spend being cut by Airbnb will, no doubt, have an impact on traffic in the future.
What about the more distant future?
Whilst we were trapped inside in the lockdown periods of 2020, many of us were dreaming of our next holiday. I definitely visited various sites with the dream of booking a trip away at least once, as I’m sure many people did. And some were even lucky enough to quickly book trips when the UK lockdown eased in summer 2020.
Even during a global pandemic, which is surely a travel company’s worst nightmare, they still managed to keep revenue up. Hopefully this didn’t give them a false sense of hope, as it isn’t unlikely that things will return to normal post-pandemic.
Having previously used platforms such as Facebook, Instagram and Google to display ads, when travel can begin again, and when the inevitable boom in travel spending ends, how will the lack of ads on these platforms take effect?
What do you think? Have Airbnb made a mistake? Are they thinking too much about the now, rather than focusing on the ways marketing has benefited them in the past? We’re on the lookout for opinion pieces to feature on PerformanceIN, and would love to hear from you, our readers, about this subject.