Airbnb CEO: Brand’s advertising is about ‘education’ not sales

Airbnb is aiming to use its advertising to “educate” people, rather than to directly drive sales, its CEO and founder Brian Chesky said on a call with investors overnight (13 February).

Around the time of the pandemic, the travel lettings platform made a decision to invest more of its advertising spend behind brand-building activity, rather than short-term sales spend. An approach it has indicated is paying dividends.

Speaking yesterday, during the company’s full year results for 2023, Chesky asserted that Airbnb’s “full-funnel” approach was driving results, and that its strong top-of-funnel activity was attracting new customers.

“We have a very different approach to marketing than our competitors,” he asserted. “We think of advertising more as education than sales.”

Now is the time for us to expand beyond our core business and reinvent Airbnb.

Brian Chesky, Airbnb

He cited the brand’s current campaign, ‘Get An Airbnb’, as advertising aimed to “educate” viewers on the advantages of doing a trip with the company. The campaign has been the business’s “most successful” digital advertising campaign ever, he claimed, and has now been rolled out onto TV.

Airbnb is also “staying relevant in culture”, he said, citing its collaboration with Mattel to create the Barbie Dreamhouse to coincide with the release of the film.

“We’re going to continue to hopefully stay relevant within culture, and if we can then convert that traffic… through product optimization, reliability efforts, improved customer service, then I think there’s a lot of opportunities,” said Chesky, speaking about winning new customers for the brand.

Airbnb’s earnings surge following ‘incredibly effective’ shift in marketing spend

He added that were many brands that wanted to partner with Airbnb, not just because the size of its platform and traffic, “but also because of the strength of [its] brand”.

Marketing spend is set to remain fairly consistent as a percentage of revenue in 2024, the company said. In 2023, it spent $1.73bn (£1.35bn) on sales and marketing, and generated $9.92bn (£7.90bn) in revenue. Its revenue grew 18% year over year.

Airbnb touted the increasing effectiveness of its marketing spend across different channels and audiences. It indicated that it would not rule out incremental increases to marketing spend in its high ROI channels, but that this would be “marginal”.

Speaking back in August, Chesky told investors that the company’s “strength of brand” allowed it to keep marketing spend as a percentage of revenue “pretty consistent”.

Extending beyond the core

The company outlined three goals for it to achieve in 2024: “making hosting mainstream”, “perfecting the core”, and “extending beyond the core”.

“We’ve always believed that Airbnb was destined to offer more than just a place to stay, and now is the time for us to expand beyond our core business and reinvent Airbnb,” Chesky said.

The business believes that since it has successfully improved its core offer, recruited strong talent and improved its capabilities through AI, now is a good time to extend beyond that.

The company has appointed former chief financial officer Dave Stephenson into the newly created role of chief business officer to lead these efforts, in what the company has termed “a transformational year for Airbnb”.

The expansion will see Airbnb focus on the travel industry, where it has built its core business in lettings, to begin with, Chesky told investors.

“Airbnb can go far beyond travel in the coming years, but we’re going to start with our core. What we’re going to do is start with travel, and then down the road, we can move beyond travel,” he said.