In early 2020, Airbnb made a significant shift in its marketing strategy by redirecting approximately $800 million in spending on performance marketing, primarily on Google keyword advertising, to focus more on promoting its brand through avenues such as video, social media, and public relations. Prior to this change, Airbnb had faced criticism for allocating a disproportionate amount of its marketing budget to Google. However, the company began reducing its reliance on Google in 2019 and 2020, opting out of participating in Google Vacation Rentals, a price comparison service.
Despite distancing itself from Google in the past, Airbnb’s Chief Financial Officer Ellie Mertz disclosed at a recent conference that the company has increased its marketing spending on Google over the last year, albeit moderately. Airbnb has been utilizing various Google advertising products such as keywords and Audiences, adjusting its marketing efforts on the platform based on perceived opportunities for efficient spending. Mertz emphasized that performance marketing remains a small portion of Airbnb’s overall marketing budget, with only a minor percentage of revenue allocated to this strategy.
In response to queries about why Airbnb does not invest more heavily in performance marketing to drive incremental revenue growth, Mertz explained that the company does not heavily rely on such strategies, with 90% of its traffic originating from direct sources. This unique approach sets Airbnb apart from other online travel companies like Booking Holdings and Expedia Group, which allocate a significantly higher portion of their revenue annually to Google performance marketing. Mertz highlighted that Airbnb strategically adjusts its marketing spend on Google based on perceived opportunities for optimal efficiency.
Mertz emphasized that Airbnb’s decision to increase its spending on Google was driven by the company’s recognition of opportunities to effectively market its brand through the platform. This shift in strategy reflects Airbnb’s evolving approach to marketing and advertising, focusing more on promoting its unique brand and offerings through digital channels. By leveraging Google’s advertising products and platforms, Airbnb aims to enhance its visibility and reach among consumers, while maintaining efficiency in its marketing spend.
Overall, Airbnb’s recent decision to increase its marketing spending on Google reflects the company’s adaptability and willingness to explore new strategies for promoting its brand and reaching consumers. By striking a balance between performance marketing and brand-focused initiatives, Airbnb aims to maximize its marketing efforts while maintaining cost efficiency. This shift in strategy demonstrates Airbnb’s ongoing evolution in the competitive online travel market, positioning the company to capitalize on emerging opportunities and drive sustained growth in the future.
