Critical Analysis On Airbnb Digital Marketing Strategy

Question

Task: This ‘Digital and Social Media’ module will give you the tools, techniques and theory behind how digital marketing works within business. During this module you will learn about best practice and key elements of managing digital marketing and social media in an ‘always on’ 24/7 environment. It provides students with a critical understanding of the challenges and opportunities within the digital landscape, and outlines the skills and tools required to support online marketing activities.
Founded on practice-based framework, the course is designed to provide practical life and employment skills; it will equip students with a critical understanding of best practices and effective digital techniques.
DIGITAL MARKETING STRATEGY (100%) COVERS ALL LEARNING OUTCOMES
You will submit all three parts as a single document which contains:
1. Digital Marketing Audit (40% weighting)
2. Digital Marketing Strategy (30% weighting)
3. Digital Marketing Plan (30% weighting)
For the digital marketing strategy, students are required to select an organisation of their own choice. The same organisation will be required for all tasks in this assignment.
Students should not choose big organisations such as Nike, Apple etc – as it is very difficult to do an audit on these organisations. The organisations should be small to medium.

1 - Digital Marketing Audit (40% weighting)
You are required to undertake a digital marketing audit for your case study organisation.

• A one-page background to the organisation (this is OUTSIDE the word count) that explains the customers.
• SWOT on the organisation’s current use of social media.
• Evaluation (advantages and disadvantages) of two competitors using social media.
• Identification of two key customer groups and development of personas.
• Customer journey flowchart or graphic.

The digital marketing audit is likely to include a range of digital marketing tools, frameworks and models.

2 - Digital Marketing Strategy (30% weighting)
The digital marketing strategy is the next stage in the plan. It is based on the digital marketing audit.

This will include:

• TOWS matrix and commentary on the analysis.
• TWO digital SMART objectives.
• Recommended digital marketing strategy based on the audit and TOWS.

The digital marketing strategy is likely to include a digital marketing model (e.g. RACE, Forrester's 5Is, Lauterborn’s 4Cs, the Ten C’s of marketing or the 6Cs of customer motivation or acquire, convert, retain) and should be supported by academic underpinning.

3. Digital Marketing Plan (30% weighting)
The plan shows how the strategy will be achieved and is based on the strategy and objectives. The plan needs to be realistic and will reflect the organisation’s size and capabilities. 

This will include:

• Consideration of metrics and resources required, including staffing and a budget.
• An outline tactical plan, created in Excel or other spreadsheet with no more than 40 strategic activities, and inserted into the Word (or other document processing system) report.

Answer

1. Audit on Airbnb digital marketing strategy
Background of the organisation
The present report is focused on examining the Airbnb digital marketing strategy in a detailed manner. Airbnb, started operations in 2008 terms itself as a reliable community marketplace for individuals to list, ascertain and book exclusive accommodations around the world (Zervas, Proserpio and Byers 2017). The UK has been renowned as a holiday destination for many years and the travel journey for travellers have been enhanced with the introduction of Airbnb. At present, the home-sharing concept is increasing and Airbnb can be regarded as the best disruptive innovation due to the company’s innovative digital-based business model (Guttentag 2015). It uniquely appeals to the tourist and Airbnb rise is of great importance for many destinations. It’s an online platform through which normal individuals rent out their homes as accommodation for travellers. The host of the accommodation may be residing during the rental period providing typical bed and breakfast or maybe far away or even operating the space as a permanent rental. According to Ert, Fleischer and Magen (2016), Airbnb is considered the most successful sharing economy business. To intensify confidence Airbnb presents the online assessment score that hosts obtain from their guests. Hosts are also encouraged to post their pictures along with their listings. Airbnb developed a commission-based web-platform for room sharers and travellers (Oskam and Boswijk 2016). The number, rapidity and implementation of technological innovations grew exponentially.

Airbnb is quite predominant in Great Britain and it has been identified that Airbnb hotspots in both rural areas and inner-city communities where the lively Airbnb listings to houses are twenty times higher than the average across England, Scotland and Wales. However, Airbnb regulations need to be properly defined by the UK government to prevent too many residential houses being used for a commercial purpose that disturbs the local community at large (the guardian 2020). The below illustration shows the number of Airbnb guests and listing in the UK from 2017 to 2018:

Figure 1: Airbnb guest and listing during 2017 and 2018
Source: (Statista 2020)

Overall Airbnb contributed £3.5 billion to the UK economy and £854 million were income received by local hosts (Statista 2020). Thus, Airbnb exhibits statistics for every property’s ratings together with the total number of reviews it has gathered.

SWOT on Airbnb digital marketing strategy
When people search for Airbnb on Google there are four social media platforms that pops-up which are linked to the company profile. Below is the SWOT conducted on Airbnb digital marketing strategy for its business:

Table 1: SWOT analysis

Source: (Awiszus et al 2017)

The premier quality pages prescribed brand engagement, alertness and inspire exchange between themselves and the users. Airbnb digital marketing strategy establishes the platform for superiority in their capacity to maintain their social media platforms on point, mark and insight related to value. However, there are always certain concerns in the form of weakness which follow its strength of using social media tools. Airbnb attitude is lacking in certain areas as pointed above which needs to be rectified, for example, attitude when dealing with the customers. Similarly, Airbnb digital marketing strategy uses the denunciation to its benefits to rationalise policies and processes which are considered ineffective. Thus, overall Airbnb does a good job of handling their social media feeds. Tactically Airbnb could create a more trustworthy experience as some of the content appeared to be impractical. Airbnb social media platform serves the business multi-purposes and they have two user acquisition strategy described for the identified audience which are individuals who desire to rent out their homes and people who wish to rent the houses when travelling. Airbnb digital marketing strategy endures investing in video marketing which acts as a major initiative of telling their brand and product story. In terms of Instagram Airbnb is the king of user-generated content (UGC). Twitter is used for responding to customer enquiries and exchange any other conversations. Appendix 1 shows the social media traffic of Airbnb as of March 2020.

Evaluations of two competitors using social media
The first competitor for Airbnb is HomeAway which is also a vacation rental place which has its presence in more than 190 countries listed on its website. The mission of the company is to link travellers to the individuals and places they visit by offering them the space they desire to stay with all the comforts (HomeAway 2020). This is more economical in comparison to hotels for people and it has been acquired by Expedia in 2015.

The next competitor VRBO for Airbnb helps people to discover new ways of staying and travelling by pairing with homeowners with individuals and families looking for comfortable places to stay (VRBO 2020). VRBO offers travellers to book condos, beach houses and any kind of space they wish to stay in. The below-listed benefits are attained by both HomeAway and VRBO by using social media platforms:

Direct association with the audience – Social media platform helps the business to directly connect with every form of global audience irrespective of age, gender or income levels. The companies’ notice people who are interested in their business since they follow HomeAway and VRBO using any of the social media platforms like Facebook or Instagram. When the business recognises the audience effectively it will enable them to deliver more valued content to them. The contents are tailored to the audience benefits and likings, thus, resulting in better engagement on its page and with the overall business. Furthermore, a direct link with the customers permits HomeAway to solve issues and queries quickly. The audience can be addressed personally leading to more optimistic light in the process.

Creation of organic content – The capability to post organic content for free provides an unbelievable advantage of social media for both the business. This leads to several opportunities for both HomeAway and VRBO to connect with prized leads at no cost and it’s the best reason these companies use social media platforms (Grégoire, Salle and Tripp 2015). The platforms also help them to share pictures, videos and stories based on the social media network. This is one of the best ways these company leverages the brand to the audience to attain more visibility.

Even though it offers many benefits for these two competitors similar to Airbnb digital marketing strategy, nevertheless, it has to confront with its set of challenges for using social media platforms too like:

Negative feedback – Many people use social media to post any concerns or share bad experiences. For example, if any customer had poor experiences in one of the rental spaces during the UK vacation and posts pictures and negative reviews this can disturb the business. Also, in Twitter users can tag the company and share their negative thoughts and retweet the same experience and share it across the network.

Spend adequate time on promotions – Social media does not provide overnight results if the business does not promote themselves well. HomeAway and VRBO must constantly create attractive content to stay abreast with its rivals and engage with its audience usefully. The major disadvantage of social media is time-consuming for the business. The marketing and creative team will have to allocate enough time to carefully design and post contents, monitor them frequently, answer customers quickly and measure the impact creation. Both the business due to lack of adequate staff see this as an overwhelming task. The campaigns are suffering since the frequency of the contents posted online by these two in comparison to Airbnb digital marketing strategy is quite less. Thus, these companies must take care to post useful contents based on their target audience and patiently wait for the results to happen.

Identification of customer groups and the creation of personas
According to Lutz and Newlands (2018), consumer segmentation separates the identified audience into various groups which are internally similar but extremely diverse from one another by assuming an unrelated overall market. Most of the home-sharing accommodation is explored by students, business professionals and young travellers who prefer affordable stays in comparison to hotels. Airbnb’s two main customer groups identified are young students who love to have a vacation with their friends and family and look for comfort, privacy and affordability. The next group is young business professionals who are constantly travelling on business trips to various destinations and seek again a comfortable, quiet place with good internet connectivity. Below are the two customer personas based on the above-identified groups for Airbnb digital marketing strategy:

Persona 1

Figure 2: Traveller professional Group
Source: (Fok 2018)

This customer belongs to a business professional group and loves to travel mainly to beach destinations and explore the local communities. The individual seeks affordability in terms of stay and that is the reason why Airbnb digital marketing strategy was chosen. However, there are certain pain points also the person has stated from her previous stays like not responsive host, language issues and inflexible check-in and check-out time. The customer has stated that she prefers better response, smooth communication and flexible check-in and out options and feel comfortable staying in the house.

Persona 2

Figure 3: Business professional Group
Source: (VoiceUI 2016)

The 2^nd customer persona indicates that the person wishes to reside in business ready homes and always books an entire home or apartment be it for business or pleasure. Nevertheless, the concerns pointed are better prices for repeated stays and Airbnb digital marketing strategy should be more responsive to guest requests.

Figure 4: Student Group– Persona
Source: (Bricker et al 2020)

A student who travels along with her husband frequently prefers ease with well-designed interiors at low prices. The customer stated that the Airbnb website and mobile app are best in comparison to a competitor like VRBO. However, the customer wants host interactions to be better and Airbnb acted quickly to resolve this issue.

Customer journey flowchart
As stated by Rosenbaum, Otalora and Ramírez (2017) customer journey mapping is a gradually prevalent strategic management method in understanding a business customer experience. It’s a visual representation of the order of activities through which customer interact with Airbnb during the booking process. By understanding the main points of the customers, Airbnb digital marketing strategy can work in deploying tactics that nurture service innovation. Touchpoints are usually represented horizontally on a customer journey map in harmony with a processing timeframe. The timeframe is further divided into pre-service, service and post-service. The pre-service is before the customer books Airbnb stay, service relates to actual stay and post-service the authentic customer experience once the stay has been completed. Identifying and catering to main customer groups by comprehending their requirements, likes and dislikes to an extent will help the business-like Airbnb to offer curated services. For example, as per earlier customer groups identified which are a student who prefers low prices and comfort.

Figure 5: Flow chart of customer journey
Source: (Prepared by Author)

Thus, the customer mapping process offers value awareness into what it’s like to step into a customer’s shoes (Marquez, Downey and Clement 2015).

2. Airbnb digital marketing strategy
Tows matrix and analysis
Table 2: TOWS matrix

Source: (Prepared by Author)

With the help of its strong global presence, Airbnb can think of quick expansion into developing economies like Asia to grow the business. Airbnb differentiates itself from other competitors based on quick response to customer enquiries and offering the guests a feeling at the home-stay concept (Liu and Mattila 2017). Making their online presence in terms of creating better YouTube videos and organised page presentation in Pinterest can appeal to more customers since 69% of the users have some form of social media account.

What are the Digital smart objectives for Airbnb digital marketing strategy?
After performing digital audit and creating the TOWS matrix for two important Airbnb digital marketing strategy objectives have been created. Both are aligned to the overall strategic business objective of Airbnb.

Objective 1: To increase the social media conversion rate from 26% to 32% (20% average increase)

Objective 2: To surge the return customer visits by creating more appealing YouTube videos and add online loyalty points based on number room nights.

Recommendation

• Strategic statement – To make an online Airbnb family

In order attain the above, Airbnb to launch an online loyalty program to congregate all customers on a single platform where the community shares their feedback, opinions, pictures and videos apart from the social media platform. This will help customers get a better insight and understanding of how the business works, what benefits are offered and also resolve any unanswered clarifications related to Airbnb digital marketing strategy. This will further help Airbnb to customise their online promotions and offers based on customer preferences.

Framework

Source: (Prepared by Student)

3. Airbnb digital marketing strategy
Metrics and resources requirement
The 5M’s metrics will be used for assessing the Airbnb digital marketing strategy. The 5M’s is a stimulating marketing tool used largely in many ways. It focuses on the five main elements of the organisation to make sure the Airbnb digital marketing strategy is a success. The five main elements are considered an asset and are majorly put to use for a successful turnaround. It can also be used as an auditing tool for the strategic planning process to evaluate the usage of internal features. This tool is also helpful in the assessment of internal resource requirements and as a balanced scorecard. Below are the five metrics that could be applied for Airbnb digital marketing strategy:

Manpower (Human resource): This refers to manpower team employed in implementing the existing Airbnb digital marketing strategy or a new plan. The team is further divided into smaller groups in executing multiple activities of the Airbnb digital marketing strategy. Example, one team for creating online contents, another to work very closely with an Ad agency and the sales team to work on customer queries and acquisition of new prospects and properties.

Materials (Product / Content): A separate team is allotted to work on creating new content / online materials to draw customer attention. Frequency and media of advertisements are studied thoroughly and discussed to support the overall Airbnb digital marketing strategy in fulfilling organisational objectives. This is a very important function as content acts as an anchor to draw customer’s attention and in enhancing new trials /enrolments.

Machinery (Equipment’s): This denotes all the physical assets used by an organisation to implement the Airbnb digital marketing strategy. In the case of Airbnb since the organisation works using social media for their product building activities and customer enrolments, they should have very robust information technology equipment and servers in place. The connectivity speed and bandwidth used must be of a high order to enable quick slide transition speed and overall customer satisfaction. All technical snags must be frequently checked and removed for optimum performance and customer experience.

Minutes (Time): Time is the most crucial factor as the promotion/content designed must be launched within the given time frame to draw customer’s attention and to increase booking rates, for example, all promotional content for Christmas must be planned four to five months and must go live at least three months prior.

Money (Funding): The concluding element of the 5M model is the finance which needs to assess the current strategic returns that Airbnb will accrue through digital marketing and break-even level that will be attained.

According to Quinn et al (2016), an impactful digital marketing team following Airbnb digital marketing strategy makes the most valuable contribution to the company’s performance. Customer experience is the main differentiator for any business. It’s the customer’s insight of the service or experience and all the interactions and processes with Airbnb combined with social media can assist the business to retain loyal customers (Vize and Sherrett 2018). This will further prevent them to shift to other competitors offering the same value and services. Thus, Airbnb must outline an effective tactical plan as the Airbnb digital marketing strategy which will reflect the company’s capabilities and size. Below is the budget that will be required by Airbnb:

Table 3: Budget