Airbnb Co-Founder believes “PR is the best form of marketing and doesn’t plan on using much of the paid adverting in the future” is this a strategy you would take?
After generating the same percentage in online traffic as the pre-pandemic levels in 2019, Airbnb has revealed they are making a permanent cut in the investment towards paid performance marketing for the foreseeable future.
The American vacation rental company states they are never going back to the same paid marketing pre-pandemic expenditures. Following the annual reports, Airbnb recorded a 58% spending reduction on brand and performance marketing in 2020, but have still managed to generate a massive 95% online traffic surge. After a successful year with the greater number of traffic coming from either direct or unpaid services, the new strategy for the increasingly growing brand is now following a full-funnelled marketing approach with PR starting at the top.
PR is the art of managing a successful brand and its reputation. Public relations is unquestionably one of the key aspects of marketing when focusing on increasing brand awareness and generating leads. Brian Chesky, co-founder and chief executive of Airbnb, described that the “brand identity was practically built through PR and press”. He added that Airbnb had featured in an impressive “0.5 million articles in the last year, of 2020, and had as much share of a voice as most of the other major travel companies”.
The courageous move to slash paid performance advertising by a huge $800m has caused controversial strategic marketing plans for future campaigns. To the likes of larger companies, like Facebook and Google, who are extremely data-driven, is this a risk that businesses are willing to take?
Dave Stephenson, the chief financial officer of Airbnb, still deems performance marketing to be an “absolutely important lever” to the strategy of building a successful brand. He continues to explain that “paid performance advertising will be implemented where it makes economic sense too”. Due to the pandemic having such a negative impact on the travel and hotel industry, other businesses like Booking.com have also had to adapt to these strange circumstances, by cutting their marketing expenses by 61% to survive this never ending nightmare.
The risks of paid ads can weigh heavily on small businesses if they do not pay attention to the analytics. Nevertheless, keeping track of PPC ads can avoid unwanted costs, and if monitored regularly, paid adverts are beneficial in producing targeted, customisable and measurable data.
Is the risk to cut paid marketing, a bad move or a smart one?
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