3 Things B2B Marketers Can Learn From Airbnb

By Kate Newstead, Marketing Science Lead at the B2B institute?

Last week Airbnb released their Q1 2023 Earnings Report highlighting continued momentum in revenue, net income, and free cash flow and signaling overall confidence in the upcoming 2023 summer holiday season.?

Q1 2023 was also the second consecutive quarter in which Airbnb executives underlined the crucial role of brand marketing in supporting their financial plan. In a prior investor call, Airbnb’s CFO, David Stephenson, elaborated on the company’s “strategic change” in marketing investment, stating it had proven to be “incredibly effective”.

So, what was the change Airbnb made to its marketing investment and what can B2B marketers learn from its success??

A forced experiment created a change in marketing strategy.

At the height of Covid, travel and holiday rentals plummeted. Airbnb was forced to slash its marketing spend, making significant cuts to performance marketing.? However, online traffic held steady at 95% of the preceding year's traffic, despite the cuts to “performance marketing.” The results of the forced experiment convinced Airbnb’s management to shift investment from performance marketing to brand marketing.?

In Q1 2021, the company launched its first large-scale brand marketing campaign in five years, Made Possible by Hosts. The campaign sought to illustrate the experience of being hosted on Airbnb and to inspire more people to become hosts. The 2022 and 2023 marketing strategies remain similar, with AirBnB planning to pull forward more of the annual marketing spend into Q1.????

On the surface, Airbnb and a typical B2B product like software, consulting services, or payment solutions seem very different. But there are some basic marketing principles that apply no matter the business model.

Here are three things B2B Marketers can learn from Airbnb.

1. Think Education, Not Persuasion

Airbnb now looks at the role of marketing as one of “education” for both hosts and guests, not simply a means “to buy customers”. They now prioritize PR and brand marketing over performance and SEO.

Many B2B companies would do well to adopt a similar strategy. Most B2B customers are not even thinking of buying yet, and won’t for many months or years. Now is not the right time to convert future buyers, but it is still the right time to talk to future buyers. Making future buyers aware of what a brand does and how it might help buyers is critical so that when the buying need does arise, the advertised brand comes to mind.

Brand marketing helps potential customers remember your brand and type it into a search engine. Performance Marketing is all the ads they scroll past to get to your homepage.??

2. Reach beyond your immediate customer

Airbnb does not directly control supply or demand, and its stakeholders include both guests and hosts, not to mention all the additional decision committee members who influence holiday rental choices (travel partners, kids, friends, pets).

The best B2B marketers think beyond the key decision maker and use brand advertising to educate all relevant stakeholders in the decision processes.? We call them “the buying committee”. When buying committee members recognize the brand, better yet have a positive impression of it, the brand becomes easier for the collective purchase decision makers to choose.?

The old adage “nobody got fired for buying IBM,” is only true because everybody on the buying committee knows IBM, reducing the risk.??

3. Invest ahead of customer planning

In the 2023 outlook, Airbnb indicated their full year marketing investment would be similar to that of 2022 but with more advertising front-loaded into the first half. Explaining that decision, CFO, David 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.”

Most B2B categories are far less seasonal than the holiday rental market. Meaning advertising spend should be about the same level all year round to maximize the chance that the brand comes to mind when it matters.?

B2B marketers can look to category sales trends to align their spend with the moments when customers are most likely to be thinking about a purchase

Don’t wait for an extreme situation to experiment and learn

The Covid pandemic forced Airbnb to drastically cut marketing spend but also created an important learning. Experiments are one of the best methods to isolate cause and effect, and they don’t have to be complicated or expensive, or reserved only for tight budget circumstances.

With LinkedIn’s Campaign Manager planning tool advertisers can deliver different advertising treatments to like-for-like cohorts; keeping other conditions stable for comparable results. One recent example: In Q1 CY23 a LinkedIn client achieved 60% response rate to connection requests from targets who received both a Sales Navigator outreach and a brand advertising message. This was almost double the response rate of the control cell who received a Sales Navigator outreach only, resulting in a 36% response rate.

To learn more about creating marketing experiments and many other B2B marketing best practices, connect with us on LinkedIn or visit www.b2binstitute.org.