Airbnb cut $800 million in ad spending in 2020. Brian Chesky, CEO, said this “What the pandemic showed is we can take [digital] marketing down to zero and still have 95% of the same traffic as the year before. So we’re not going to forget that lesson. [We were focusing on the wrong] KPI which was just about how do you buy cheaper media …In Q4, more than 90% of our traffic was direct or unpaid. Accordingly, [there will be] a permanent shift to brand [advertising.]”
Adidas came to the same conclusion – they were so focused on short-term digital “performance” metrics that they underinvested in longer-term brand building. “The problem … is not the metrics per se but a focus on the wrong metrics. Digital technology offers a wealth of short-term measurements, often in real time, which has resulted in marketing investment being misdirected. Brand is driving 65% of our sales across wholesale, retail and e-commerce, and yet [at 55% of investment] it has an under investment. We [were] overly focused on digital attribution and digital sales but we are improving,” said the sports brand’s global media director, Simon Peel.
The key takeaways are these: It’s not that you should turn off digital ad spending (that would not be wise unless your company’s brand is as widely known as AirBNB’s), but that you can invest it differently and get far superior outcomes.
Airbnb was focused on the wrong digital marketing KPIs, by focusing on how to buy cheaper media which, ironically were disguised as “performance metrics.”
The second key takeaway is performance vs brand. In digital, there may appear to be performance — e.g. more clicks — but often there are few to no incremental sales or key business outcomes. Some of this is due to clicks coming from bots and not humans… which brings us to the next digital marketing secret.