A Forbes article “Why Airbnb made a big mistake by ditching its marketing” discusses Airbnb’s decision to cut back on its marketing efforts at the height of the Covid-19 pandemic. It highlights the importance of effective marketing and communication strategies for companies operating in global markets, even in times of global crisis.
Airbnb is a global home-sharing company that operates within multiple countries and cultures. They have successfully adapted their marketing and communication strategies to effectively do business in countries around the world. This requires a deep understanding of people and their local customs, and having a consistent and compelling brand message that speaks to their vast target market. In other words, their international marketing communication strategy was excellent.
But what are the consequences of neglecting these marketing tactics?
Photo by Martin Sanchez
When the Covid-19 pandemic hit hard in March 2020 many businesses scrambled to adjust to the many restrictions and problems it created—for conducting business and everyday life. This meant a drop in spending on goods and services by the global public. Airbnb’s immediate solution was to completely halt their marketing efforts, which would save $800 million for the 2020 year.
Ultimately, this decision was a mistake. Airbnb’s internal valuation dropped 16% and they faced brand image issues that they had no way of mediating (without a marketing budget). The “hosts” of the home-sharing platform were shocked and upset when the company decided to remove cancellation fees and public backlash ensued. The brand’s efforts to compensate their hosts and provide aid fell short.
Cutting back marketing completely caused Airbnb to lose out on business, face public backlash without a marketing team to control the narrative, and overall devalued their company. A marketing team could have worked to create a sense of loyalty among new and existing customers and publicly demonstrated the company’s support for their hosts.
This mistake serves as a warning for brands. Even when you’ve been greatly successful in international marketing strategy and communication, you must continuously have a budget and a team. In times of crisis, marketing can help mediate instances of public backlash and work to ensure that the brand retained a client base through the Covid-19 crisis.
To successfully compete in global markets brands must maintain a strong and consistent marketing and communication strategy, even in times of crisis.