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Lessons in brand building from Airbnb

roberto-nickson-so3wgJLwDxo-unsplash-3 Credit: Roberto Nickson on Unsplash
Back at the end of 2021 I questioned whether it was too soon to judge the effectiveness of Airbnb's shift to brand advertising. Two years after the shift was made, I think it is safe to say it was effective. On a call with investors earlier this year, Airbnb's CFO, Dave Stephenson, announced the company's first, full year profit and stated that the company's "strategic change" in marketing investment had proved to be "incredibly effective." So, what can marketers learn from Airbnb's success?

Lessons in brand building for any marketer
Airbnb is not your typical company, so many marketers might dismiss its success as not being relevant to their industry. But that would be shortsighted. It is true that there is little in common between the business models of Airbnb and a financial services firm, far less an automotive manufacturer or a packaged good. However, focusing on the business model ignores that there are some common marketing principles that apply no matter what your business might be.

Test your marketing assumptions
Every company makes assumptions about what type of marketing works in their industry or not. Performance marketing is the name of the game for most hospitality brands and initially Airbnb focused on marketing tactics designed to capture clients as they searched for accommodation online. However, with travel plummeting at the height of Covid, Airbnb was forced to slash its marketing spend, cutting performance marketing to zero, only to find that online traffic remained robust at 95% of the preceding year. The results of this forced experiment convinced Airbnb's management to shift investment from performance marketing and SEO to PR and brand marketing.

So, lesson number one, do not make assumptions about what works and what does not. Test your assumptions, do not wait for a happy accident to do it for you.

To grow, extend your brand footprint
In Q1 2021, Airbnb launched its first large-scale brand marketing campaign in five years. Titled, Made Possible by Hosts, the campaign sought to illustrate the experience of being hosted on Airbnb and inspire more people to become hosts themselves. In addition to taking hosting mainstream, Airbnb see marketing as building the foundation for new services and offers like Airbnb Categories which highlights different styles of accommodation, different locations, and proximity to different activities.

Lesson number 2, if you want to grow your brand you must extend its footprint to new audiences, new situations, new occasions.

Think education, not persuasion
Airbnb now looks at the role of marketing as one of "education" for both hosts and guests, not simply "to buy customers".
Many companies would do well to adopt a similar education mindset. The number of people who will buy your product category is always larger than the minority buying it today, so there is more leverage to be gained by influencing future buyers than current ones. Most future customers are not even thinking about buying your category yet but can still learn what your brand stands for and why it might be relevant to them. Implicit in the word "education" is the fact that people will remember what they learned. And the most important thing that you want people to remember is how your brand can help them. What needs does it satisfy? What situations is it good for? How will it feel to use the brand? The quicker and easier your brand comes to mind compared to alternatives the more likely it is to be considered.

Lesson number 3, people must remember your brand when the time comes for them to buy, and the associated ideas, impressions, and expectations should help shortcut their buying process. Why check out alternatives when there is an obvious candidate in mind? Why quibble over price when the alternative is previously unknown?

Think beyond your immediate customer
As an online platform, neither supply nor demand are under Airbnb's direct control. So, Airbnb must compete for both guests and hosts, and the choice of vacation accommodation is often a joint decision and, in many cases, so too is the decision to become a host. So, Airbnb must reach and influence more people than the one using the app or website. In fact, most marketers should think beyond their immediate customer. B2B marketers should do so because business buying is often a collective decision with multiple stakeholders. However, the same principle applies to many other product categories. For instance, never underestimate the power of kids to guide parental purchasing, even for goods that they do not consume directly.

Lesson number 4, aim to influence all the stakeholders in a purchase decision. One individual may make the purchase, but their behavior reflects the needs and wishes of others, so reach wide and use creative that will resonate with a wide audience.

Invest ahead of customer planning
In 2023, Airbnb increased its first quarter spending. Explaining the decision to bring media investment forward, CFO, Dave Stephenson, stated,

"We're getting [out] even earlier in the year to make sure that we're getting our message out to guests all around the world so they're ready to make their bookings for [the] peak summer travel season."

There are many product categories with clear seasonality in terms of sales, but targeting advertising to the specific season often misses the opportunity to pre-empt the competition. Memorable advertising primes people to consider a brand when they start to think about making a purchase. Just as Airbnb needs to make sure people think of a rental property as a good alternative to a traditional hotel, B2B marketers should think about pre-empting their client's planning process, spending ahead of the typical planning and budgeting cycle.

Lesson number 5, advertise ahead of the sales curve. Leave advertising too late, and people will likely already have other options in mind.

If you have a winning hand, double down on it
In 2022, Airbnb increased its marketing spend significantly. If you have an effective campaign, spending more is going to be the easiest way to boost sales. More media investment will buy a bigger audience which will generate more sales. If you have a campaign that works, do not cast it away lightly. The history of advertising is littered with great campaigns that could not easily be replaced.

Lesson number 6, if you have an effective campaign, use it to reach as many potential buyers as possible. Given today's media environment, it is unlikely you will overspend, provided you ensure that your investment is spread across media channels to maximize reach. (Of course, the opposite lesson is also true. If there is no short-term evidence that your advertising is effective, cut spending and review what is wrong. Do not get caught out by the sunk cost fallacy.)

Two additional and fundamental lessons
To conclude, it is probably worth highlighting a couple of other fundamental lessons inherent in the Airbnb case study.

Lesson number 7, never stop improving your product. 
Airbnb lists three strategic priorities for 2023, including perfecting its core service. The company is right to do so. If a brand fails to innovate its product or service, then it is vulnerable to a competitor seizing the opportunity.

And, lesson number 8, make sure your brand is easy to find.
Airbnb is instantly available. Millions of people have the Airbnb app on their phone, its website is a click away, and generic searches will often highlight one of properties it lists. In that regard, Airbnb is unusual, because any demand created can be fulfilled easily. There are few other brands that share the same ubiquity, online or off, and very few brands that people are willing to go out of their way to find.

I find the Airbnb case study to be very similar to that of the Premier Inn brand in the UK. There are marked similarities, particularly in lessons 2 and 3, given both brands focused on brand building in an industry traditionally dominated by sales activation. And it is worth noting that Premier Inn continues to reap the benefits of strong brand marketing today.

Can you suggest similar case studies? What lessons have I missed? Please share your thoughts in the comment section below. 

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June 24, 2024