How Airbnb used Brand to Build a $96B Company and Change the Way People Travel

Airbnb is THE case study for shifting from performance to brand marketing, building a $96B travel company worth more than Marriott, Hilton and Hyatt combined, and steering through a crisis to refocus, resulting in one of the most valuable IPOs in history

Who will love this

• Founders who want to use brand to scale as a competitive advantage

• In-house creative teams

• Customer-obsessed marketers who love a beautifully told customer story

• Culture-vultures who love seeing brands engage with breaking news

• Marketers longing for a case study that proving the value of brand marketing

Today

Good morning!

Today’s brand is a biggie, but it behaves with heart (my favorite kind of brand). 🖤

I’m bullish on founder-led brands. I love the energy, clarity, and alignment that comes when a founder is walking around the building (or popping up in every Slack channel: IYKYK 🫡)

Today’s brand is Airbnb. Shoutout to Steph 👋, who made a comment that inspired this article.

Airbnb are a case study in why founder-led brands (often) win, how to successfully make the transition from performance marketing to brand-led marketing, and how to use emotive creative as a competitive advantage.

In 15 years, Airbnb have: 

• Built a durable brand that has withstood a global crisis (80% reduction in travel, widespread layoffs & a fundamental shift in travel during COVID)

• Went public, shattering records as one of the most valuable companies ever, and opening at $144 a share, 113% above initial offering price of $68.

• With an in-house team, produced advertising that’s in the top 3% of all ads in effectiveness studies (Source: System1)

• Successfully transitioned from heavy performance marketing to brand-led marketing

👆Is all of this a coincidence? Of course not :) We’re going to talk about why.

Pack your bags, let’s get into it!

💃 🧳

Three things Airbnb did create a new travel category

1️⃣ Mission Alignment: Belong Anywhere

Most companies are not clear on why they exist.

Airbnb are extraordinarily clear on why they exist and what they want people to feel. When a company is aligned, you don’t waste as much time debating what you’re doing, why you’re doing it, and how to express it to your customers.

Airbnb got real clear on their mission in 2007 when they rebranded 👇

Their sense of mission, and brand story that captures it, leads everything Airbnb do. Belong anywhere. It’s lovely, isn’t it?

So now that they have a killer mission, they’re done, right? Of course not! Making people feel who you are and who you’re for is the trick.

And this is where Airbnb really sings.

2️⃣ Lead with brand

Airbnb lead with brand. Airbnb are swimming against a current of VC-backed direct-to-consumer companies who’ve prioritized growth marketing without brand (it’s not pretty). Airbnb are doing the opposite, and reaping the rewards.

But what does it mean to lead with brand?

First - let’s define terms.

• Growth or performance marketing = campaigns that directly generate consumer action

  • Metrics: click-through rates (CTR), conversion rates, cost per acquisition (CPA), return on ad spend (ROAS)

  • Time horizon: short-term, immediate results

• Brand marketing = campaigns that tell a customer who a brand is, establish an emotional connection, build loyalty, and shape perceptions

  • Metrics: brand recall, brand recognition, brand sentiment, customer loyalty, brand equity

  • Time horizon: long-term

Airbnb have proven emphatically that brand marketing has positive short and long-term effects. When you turn off your growth marketing, you find out how strong your brand really is. When Covid hit, it was a forcing function for Airbnb to really go hard on brand. (btw - Jon Evans did a fabulous interview with Nancy King at Airbnb on this topic if you want to go deeper on this).

What happens when you turn off all your direct-response ads? Airbnb found that it didn’t really matter, because they had strong brand awareness (that’s brand marketing speak for: it’s a household name). In fact, most of the traffic to Airbnb.com is organic (translation: Airbnb isn’t running ads to drive people to the site, they search of visit Airbnb directly). (Tip: Direct and organic traffic is a good heuristic for brand awareness.

Airbnb is a tangible example of how investing in brand drives business results: when you have strong brand awareness, don’t have to buy each customer.

Follow Airbnb’s Brand Led Playbook

• ❌ Stopped thinking of marketing as a way to “buy” customers

• ✅ Started thinking about performance marketing as a way to balance supply and demand

• 📚 Start telling brand stories (like this ad - chef’s kiss) instead of direct response

But let’s get specific. Airbnb are running brand marketing but what does that mean exactly?

Let’s talk about flywheels!

3️⃣ Build a Brand Story Flywheel

The best brands are story systems. Brands that build an ecosystem of stories to tell, are more likely to win.

Stories spread faster than anything in the world. Emotion makes it more likely that we’ll remember a message. Stories scale. The more people feel, the more likely they are to recall your brand and choose you when they’re ready to buy.

How Airbnb spots and tells emotive brand stories:

1. Airbnb tell a compelling macro brand story about belonging

2. They spot host and traveller stories that support their brand story

3. They amplify those stories by turning them into ads or pitching them to journalists

We can prove that Airbnb’s stories work (with data! we love that!). System1, who measure the effectiveness of advertising, report that Airbnb’s Yellow Submarine ad (watch it below, it’s so cute) is in the top 3% of all ads they’ve ever studied. Props to the Airbnb team! Work that works is sexy!

4 Types of Stories Airbnb Seed to Spread their Message

1. Community stories highlight how travel with Airbnb = connection

For the 25th anniversary of the fall of the Berlin wall, Airbnb told the story of two former border guards from East & West Germany who met in an Airbnb for the first time after the wall came down. So beautiful (shoutout to CD Frank Oliver for this work). 🤩

2. Community stories spotlight how hosts make belonging possible

How do you produce creative work when the world is in lockdown? Airbnb put a call out to their network of photographers, offering to put them up in an Airbnb if they photographed their stay. The result: a series of beautiful, minimal slide-shows set to music.

3. Culture stories seed the idea of belonging anywhere

Airbnb have been masterful at responding to culture with on-brand, beautiful work in a matter of days. Airbnb ran an ad in response to the 2017 travel ban and a Superbowl ad 9 days after an executive order closed America’s borders. Brave. Fast. Compelling.

4. User data stories seed how Airbnb is changing travel

Airbnb uses data from their users to produce stories and get Airbnb into the news cycle. For example:

1. Airbnb publishes story (searches on Airbnb spiking for Las Vegas accommodation ahead of Superbowl game next week)

2. CBS picks up the story & runs an interview with Airbnb’s communications manager

3. Positive press coverage positioning Airbnb as affordable + better value than hotels

These are not accidents. This is highly strategic storytelling at scale, and we love to see it.

What Airbnb tops it all off with is a killer design system. 

4️⃣ Build a Brand that Works

Airbnb have one of the most well-executed brand identity systems I can think of. Strong identity systems are not a matter of taste: it’s a matter of whether they work.

Why?

Airbnb’s founders understand the power of creative, and it shows: they invested in their brand early by hiring Design Studio to build out their identity and investing in building an in-house creative team (like Apple’s model). See Ex-Apple legend (now global head of marketing @Airbnb) Hiroki Asai’s note about the ‘Made Possible by Hosts’ campaign below - it sums up the case for an in-house team

The lesson: Brand identities are not art (sorry!). They have jobs to do. Airbnb’s job is to change perceptions of travel. They need to:

• Building a coherent brand across 190+ markets

• Reach two audiences (hosts and travelers)

• Shift perceptions: get people to open their homes to strangers

• Do it all without breaking the bank 🏦

How Airbnb do it: two distinct styles to build a coherent brand

Airbnb use two main creative styles:

1. Documentary style stories featuring real travelers and hosts. (also, please watch this adorable ad set to Jay-Z’s Bonnie & Clyde? STOP IT AIRBNB 🥺)

2. Conceptual stories (illustration, graphics) that can work across cultures. Less emotive but educational and can be easily converted across languages and cultures. 

So: Airbnb are strategic, mission oriented, creative, epic at spotting stories. But what do you do when you hit a crisis?

5️⃣ Steer through Crisis to refocus on Customers

Airbnb know how to steer through a crisis.

While Covid wasn’t a crisis Airbnb created, they used it as an opportunity to refocus.

A Masterclass in Crisis Management

The 3 principles I love & return to when thinking about brands in crisis are simple (courtesy of Scott Galloway’s excellent summary):

1. Acknowledge the issue - Within a week of WHO declaring a global pandemic, Airbnb puts global policy in place to allow guests to cancel books & sends letter to hosts explaining rationale.

2. Person at the top takes responsibility - All communications come from Brian Chesky, who holds video calls, weekly Q&As on video throughout the crisis, and personally makes announcement about layoffs.

3. Overcorrect - Founders relinquish salaries ✅, cut exec pay in half ✅, slash $1B in marketing expenses ✅, lay off 25% of staff (full blog here, it’s truly a masterclass in delivering hard news, well), cut non-essential business lines ✅

The Turnaround

Airbnb launched campaigns to encourage local travel with ‘Go Near’, and a partnership program to share travel insights with local authorities. By July, guests booked stays at the rate they were just before the pandemic. In August more than half of bookings made were for stays within 300 miles of the guest’s location, and between June and September, consumers spent more on Airbnb than on Marriott, Intercontinental, and Hilton. By November Airbnb had raised $1B in funding and by December 2020, went public, shattering records and becoming one of the most valuable IPOs in history.

In summary…

Wanna be like Airbnb?

Remember, brand strategy isn’t copy paste, but the principles of good brand strategy are universal. Three things any brand can learn from Airbnb:

• Sweat your brand story. Don’t just talk about what you do. (we make widgets) Tell people why you do it. Why does [your product] matter? What do you stand for?

• Be maniacal about spotting customer stories that support your brand story. Whether you’re a 3 person team or a 30 person team, build channels and forums where you make customer stories visible.

• Spin customer stories into creative gold. There’s so many creative, fun ways to do this. Airbnb & Apple are masterful at doing it in a really minimalistic, beautiful way.

And that’s a wrap. 🫡

🖤 Amanda

🧹Housekeeping 🧺

Some housekeeping items:

• Want help auditing, defining, or bringing your brand to life? That’s what I do. Reply to this email to book a chat.

• Hot takes wanted. I’m considering a ‘behind the brand’ series of interviews. Have a brand or brand owner in mind you’d like to hear from? Hit me with people and brands you want to hear from! 🤙

• Shoutout to the folks who’ve provided me feedback this week. Writing is so much more fun when it’s a team sport (Roslyn, Benny, Bobbi, Tristan 🖤)

✌️Thanks so much for reading - I so appreciate your attention!

Amanda

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