The biggest misconception about Airbnb’s famous transition away from performance marketing is that they went from 100% performance to 100% brand They didn’t. They became more balanced. After studying their transition, here are the 5 ideas you can apply in your biz as you navigate finding the ideal balance for your brand. Why listen to Airbnb? They generated >$500M in profit in a single quarter and have maintained massive margins since shifting their strategy. Something’s working that’s not simply tied to the “return to travel boom”. 1) It's not "brand" OR "performance". It's a balance of "lasers" & "chandeliers" Brian Chesky, CEO: “We were spending a lot of money in performance marketing. I don't think performance marketing is a bad thing. I think of performance marketing as a laser, actually.” “We used to have this metaphor of lasers, flash bulbs and chandeliers. If you want to light up a room, performance marketing is a laser. It can light up a corner of a room. You don't want to use a bunch of lasers to light up an entire room - you should use a chandelier. And that's what brand marketing is.” “But if you do need to laser in and balance supply and demand, then performance marketing is really good.” 2) Brand marketing = Investment yielding accumulating advantages. Performance marketing = arbitrage seeking with eroding advantages. “Performance marketing, though, doesn't create very good accumulating advantages because it's not an investment.” “Now if you want to build it permanently, like Booking . com if you have a really high ROI now, you can have a performance marketing arbitrage business.” “But assuming you don't want an arbitrage business, you actually need to be investing.” 3) Brand building isn’t only talking about your values. Your product is just as central to the brand message, so tell people why it’s different and better. “We think of marketing as education, that we're educating people on the unique benefits.” “A lot of companies don't do product marketing. They do brand marketing, which are ads about the app, or they do performance marketing. But they're never really educating people about new things they're making.” 4) Word of mouth > everything “It's a full funnel approach. And last year we got 600,000 articles written about us. So, people talk a lot about Airbnb.” - Chesky from a recent Earnings call “When you invest in a brand, when your brand's a noun and a verb, and you have something unique, you get a lot of those benefits.” “90% of our traffic remains direct or unpaid.” - Dave Stephenson, Chief Financial Officer, Airbnb 5) The single reason you invest in brand is to make more money “Chesky said that the brand would never again rely so heavily on performance marketing. And shortly after the decision to reallocate marketing spend, the company reported its most profitable fourth quarter on record” - The Drum #brand #marketing #airbnb #profitability