Airbnb has said it will make a permanent cut in the amount it invests in marketing after slashing its outlay by more than half during the Covid-19 downturn and still generating 95% of the same online traffic as a year earlier.
The online property rentals company is moving its spend away from performance marketing and into brand marketing. It will also focus more on public relations.
“We are never going to go back to spending the same amount of money on marketing as a percentage of revenue as we did in 2019,” Chesky told CNBC in an interview following the annual results.
Marketing represented 14.2% of revenue in 2020, compared with 23.7% in 2019, as the company cut costs more steeply than the decline in its sales.
The annual report showed Airbnb slashed its combined spend on brand and performance marketing by 58% or USD 662m from USD 1.14bn in 2019 to USD 482m in 2020.
Brian Chesky, co-founder and chief executive, described the shift in strategy away from performance marketing as “very important to the corporate story”, when he spoke at its annual results presentation – the first since the company floated on the stock market in December 2020.
Airbnb said the shift in marketing strategy is material, listing “the reduction in performance marketing spend to focus on brand marketing” in its annual report as one of a series of “forward-looking statements” that carry “substantial risks and uncertainties” for the company.
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