Brand Marketing vs Search
Here’s an interesting piece for marketers/execs I read recently about Airbnb:
Airbnb Says Its Focus on Brand Marketing Instead of Search Is Working [via WSJ]
“The home-sharing company posted its most profitable quarter to date, saying its prepandemic move away from search advertising has been a good bet”
“Airbnb has made major changes to its marketing strategy in recent years. The company in 2019 began trying to depend less on search advertising and to lean more on broad marketing campaigns and public relations designed to build its brand. The company has focused on public relations practices to drive news coverage of its business, along with advertising campaigns running on channels such as television.”
That’s from late 2022, yeah, but it’s still relevant. Here’s a more recent piece from the Drum, showcasing some new ad creative.
Basically, Airbnb made a bet on the declining return on investment in search marketing, and so far it seems they have been correct. If I were them, I’d have done the same. Maybe they speculated that competition for popular search terms will only continue to get fiercer, that the cost of search marketing will hold steady or go up, and the value of brand will increase. In this marketing landscape, recognizable, trusted brands and customer loyalty mean more than just your search rankings. CTRs are less important than customer preference.
“[Airbnb] made deep cuts to its overall marketing spending. In the first quarter of 2021, sales and marketing expenses fell 28% from the quarter a year earlier to $229 million, citing a decrease in performance marketing expenses—which refers to campaigns that directly generate consumer action—and an intention to use the strength of its brand to attract guests.” [WSJ]
This makes a ton of sense. Search marketing is hugely expensive, and in a lot of cases for a lot of brands, it’s wasteful!
Think about it. To grossly oversimplify, there are basically two ways a company can make more money. You can acquire more new customers, or you can make more from the customers you already have. To move the first needle, you can pour money into your top of funnel marketing to essentially buy more customers.
To move the second needle, you might focus on providing expanded services, more products/upselling, so that your existing customers spend more money with you. You might also focus on ways to reduce churn: hanging on to the customers you have.
Brand is both a driver and an outcome of this work. The more and better experiences your customers have with your brand, the more entangled and loyal they become. Your brand is top of mind, part of their life. More than that (you hope), your brand is a positive part of their life, helping or delighting them when they interact with your products. Your brand reputation for great experiences and service is a virtuous cycle. Your reputation and loyal customers help you continue to be successful.
Marketers talk about this as the “leaky bucket” challenge. You can keep pouring money into new customer acquisition campaigns, buying eyeballs and clicks, but at some point the costs will outweigh the benefits. Buying many shallow connections will eventually prove less valuable to your business than thoughtfully, deeply cultivating a smaller number of truly satisfied users who become true fans of your brand.
It was a much-needed strategic adjustment, in [Airbnb CMO] Asai’s view. “As Airbnb was growing, pre-pandemic, it was losing its differentiation. There were a lot of competing options for travelers out there and Airbnb … was losing its uniqueness. It was losing its sense of brand and who it was. So…the decision was to really focus on the core business and to focus on creating experiences, creating features and creating a product … to differentiate ourselves – and then to use brand to actually communicate and teach people what those differences are.” [source]
To do this probably requires taking some of that money you might have shoveled into the yawning abyss that rhymes with Oogle, investing it in genuinely pleasant and helpful product experiences, and creating branded content that showcases something unique, special, or surprising about your business, your industry, and what you offer.
It’s hard work to build trust and preference for your brand, but it’s very expensive to ignore it.