So, Airbnb has radically changed its marketing approach in the past 12 months, moving away from performance in favour of brand. It has sought absolution for its performance-led ways and has now seen the light of the one true brand path that our industry is so often obsessed with.
Putting aside our sector’s consistent attempts to further drive a wedge between performance and brand marketing, as if they are two wholly separate activities between which there is a clear, binary choice, I feel the significance of this change in strategy has been overstated.
Airbnb’s shift in direction comes off the back of adversity, not advantage, based on challenging market conditions. The change in approach was appropriate given these conditions, but my hope is that it doesn’t consistently take a zero-sum approach moving forwards and instead recognises the nuances within its results. This isn’t a question of brand versus performance.
Finding the right marketing mix is based on a huge number of factors that demand a truly agile approach.
The fact that Airbnb maintained 95% of pre-Covid traffic potentially reveals a lack of understanding of media’s contribution to incremental growth that the pandemic, and its effect on the market, has shone a spotlight on.
It has essentially forced the brand into the ideal media experiment of “turn everything off and see what happens”, that in normal circumstances advertisers aren’t too keen on (not surprisingly). This raises some incredibly useful watch-outs for brands:
Be careful not to fall into the “counting, not causing” trap that digital performance marketing has relied on so heavily for the past decade, with programmatic display and social posing as performance channels but just hoovering up attributed sales that were “caused” by another channel.
At Havas, this thinking has revolutionised our approach to “performance” in digital channels, as we’ve left behind the received wisdom that low-cost inventory or low CPAs are inherently good, or that they drive incremental growth.
Instead, by understanding the value that these channels deliver, we are planning and executing in a different way, demonstrably improving our true contribution to clients’ business objectives.
Market leaders can often suffer as well as benefit from their market position. Size and success can mean that larger brands haven’t had to ask too many questions around what is or isn’t working, because they haven’t had to sweat the marketing budget for effectiveness.
Digital teams can confidently claim they are driving cost-efficient sales (although largely non-incremental) and brand teams can celebrate high awareness and consideration from brand activity, PR and word-of-mouth. It’s often in adversity, when brands are forced to look at how to avoid any wastage, that the truth around effectiveness is revealed.
What’s needed is a more nuanced approach to unpick exactly what is and isn’t driving meaningful brand growth. Airbnb’s statement that its move from performance to brand is permanent and that it will “never” return to pre-pandemic levels of marketing spend versus revenue is somewhat short-sighted.
As the world comes back to life, travel spend increases and further challengers enter the market in the future (after all, even disruptors get disrupted), Airbnb will need to change and adapt in the right ways, in order to continue to grow through varying marketing conditions.
As a huge brand, Airbnb was right to move away from trying to drive conversions that aren’t there and to focus on reminding a broad audience who it is and what it offers on an emotional level.
But we should not treat brand and performance as very distinct silos. Our focus should be on understanding the meaningful, incremental benefit of each to business growth.
A significant step towards this is to develop a full funnel understanding of the KPIs that are influenced by media and that actually influence sales. This includes everything from spontaneous brand awareness through to click-through rates, and means that when you look to shift any KPI, you fully understand why you are trying to do so and what the expected benefit to business outcomes will be.
This approach doesn’t require full econometrics, just a couple of smart data scientists and access to the right data.
The lesson for any brands looking on enviously, is that it’s not about brand versus performance. Finding the right mix of marketing activity, budget allocation and channel selection is dependent on a number of factors such as market size, current market share, existing brand strength and organic market growth. These will all fluctuate, as should a brand’s approach.
The right strategy will evolve as you grow and your environment changes. Smart brands should invest now in driving a genuine understanding of how media meaningfully contributes to their business growth. That way, they won’t have to learn the hard way.
Matt Dailey is chief performance officer at Havas Media Group