Airbnb and the Brand-versus-Performance Marketing Trade-Off

In late December 2020, Nancy King, vice president of marketing at Airbnb, confronted one of the most consequential decisions of her career as the company emerged from the turbulence of the COVID-19 pandemic. Airbnb, originally a creative two-sided platform for vacation rentals, adapted to the seismic changes of 2020 by slashing marketing spend - particularly its performance marketing - and shifting resources to broad brand-building initiatives. As the first COVID-19 vaccines were delivered and optimism returned to the travel sector, King bore the responsibility of recommending how to allocate $5 million of Airbnb's marketing budget for the next quarter: either by investing in performance marketing to stimulate immediate, trackable bookings or by investing in brand marketing on YouTube to foster long-term recognition and affinity. Further, she had to determine which of Airbnb's four target segments to prioritize. The case represents one of the biggest issues facing marketers today: the debate between upper-funnel "brand marketing" versus lower-funnel "performance marketing." The case introduces students to the differences between those two approaches while allowing for broader discussions of positioning, channel ROI, customer journey mapping, and consumer research data. Students will analyze return on advertising spend, leverage common consumer research data concepts, and apply assumption-based marketing ROI calculations to develop a defensible, data-backed recommendation for a globally recognized brand facing recovery-stage decisions in a competitive landscape dominated by Vrbo, Marriott, Hilton, and Booking.com.