31 Jul 2024
MEMOS/ Ideas
Brand differentiation for the long-term wins
One of the greatest moments highlighting differentiated brands' importance is probably Airbnb in 2020. This is no better evidence than Airbnb mobilizing so much of their marketing spend from performance marketing to brand marketing, and it literally turned their business around.
As most of us probably know, when the pandemic upended the travel and tourism industry in 2020, Airbnb lost about 80% of its business overnight. Before the pandemic era, Airbnb’s revenue was mostly performance marketing driven. But when the pandemic happened, performance marketing was no longer delivering. People’s travel behaviors shifted. Airbnb also lost their voice and differentiation among other rental marketplaces.
Then, the CMO of Airbnb, Hiroki Asai, ditched performance marketing for new brand campaigns and experiences across the globe to reconnect with and engage audiences everywhere. With their singular brand focus “belonging”, they launched new product experiences like Categories, Rooms, Icons, and more.
At the core of what we need to do is to create a product and experience that’s different from any other service. And to do that, we need to innovate on the software, on the technology. And we want to use brand not just to advertise our values and what we’re about – we also want to use brand to help explain what these features are and how they make for a different experience...
Icons is a compelling new way to do marketing...and help shift the brand to be more than just a place to stay and create space to offer new products and services.
Following the decision to reduce performance marketing spend, Airbnb’s traffic levels reached 95% of what they had been in 2019, before the pandemic. With 2 years of reallocated marketing spend, the company reported its most profitable fourth quarter on record in February 2023 with a 19% increase YOY in the volume of nights and experiences booked via the site. And revenue jumped 24% YOY.
A great brand unlocks defined and differentiated experiences that helps customers understand why you’re different and why they should be a part of your journey and mission. Today’s consumer wants to be a part of something. Give them something to be a part of.