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What do you think about the latest news about Airbnb entitled "Airbnb Says Its Focus on Brand Marketing Instead of Search Is Working"?

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Airbnb Inc. said its strategy of slashing advertising spending, investing in brand marketing and lessening its reliance on search-engine marketing is continuing to pay off. Its marketing spending is now low enough that it doesn't anticipate drastic reductions even if economic headwinds worsen next year, it said. The home-sharing company made the remarks Tuesday as it reported its most profitable quarter to date, suggesting that demand for travel is strong despite challenges from inflation. Airbnb has made major changes to its marketing strategy in recent years. The company in 2019 began trying to depend less on search advertising and to lean more on broad marketing campaigns and public relations designed to build its brand. The company has focused on public relations practices to drive news coverage of its business, along with advertising campaigns running on channels such as television. It has also made deep cuts to its overall marketing spending. In the first quarter of 2021, sales and marketing expenses fell 28% from the quarter a year earlier to $229 million, citing a decrease in performance marketing expenseswhich refers to campaigns that directly generate consumer actionand an intention to use the strength of its brand to attract guests. In Airbnb's earnings call Tuesday, Chief Financial Officer Dave Stephenson said the company is happy with the return on investment it is seeing with the different approach to advertising. The company spent $383 million on sales and marketing in the three months ended September 30.

"Our brand marketing results are delivering excellent results overall with a strong rate of return, and it's been so successful that we're actually expanding to more countries," he said.

Asked by analysts whether the company would cut ad spending in a potentially tougher economy or continue investing in such an environment to teach consumers about new offerings, Airbnb executives said they expect marketing as a percentage of revenue next year to remain at similar levels to where it is now.

"We've already kind of hit this new kind of lower overall rate," Mr. Stephenson said. "Certainly, we can moderate that over time, but we're already so low that I wouldn't anticipate us dropping it dramatically in the face of substantial headwinds with overall growth."

"We think of performance marketing as more of a way to laser in to balance supply and demand rather than a way to just purchase a large amount of customers." CEO Brian Chesky

Airbnb isn't thinking of marketing as a way to "buy" customers because more than 90% of the traffic to its platform arrives directly, unaided by search advertising, Airbnb Chief Executive Brian Chesky added on the call. Instead its strategy now is to use advertising to publicize Airbnb Categories, a way to search for homes based on factors such as style or proximity to an activity such as surfing or skiing, and AirCover, a policy meant to help travelers who encounter problems such as inaccurate listings or hosts who cancel booking on short notice. The company also offers an AirCover policy for its hosts, including liability insurance and damage protection.

"We think of performance marketing as more of a way to laser in to balance supply and demand rather than a way to just purchase a large amount of customers," Mr. Chesky said.

Airbnb is a good example for direct-to-consumer brands that want to evolve from a performance-marketing model to one with brand marketing integrated, said Mat Zucker, senior partner and co-lead of the global marketing and sales practice at consulting firm Prophet. "They don't seem to have these two competing priorities. They are actively integrating both," Mr. Zucker said. Part of that might be because Airbnb has a relatively lean operation and is a newer company than the legacy hotel chains with which it competes, he added. "They don't have the burden of legacy structures of competing groups and departments and people, so maybe that's part of why they can do seemingly so effortlessly," he said. But the brand could be tested if its competitors ratchet up spending in a downturn, Mr. Zucker said. "I don't know if flat is enough to maintain share of voice," he said. "If hotel marketing comes back and spend starts to eke up in travel and hospitality, will they be able to maintain a share of voice as the hotels come roaring back?"