5. 1
Executive Summary
Airbnb was founded in 2008 by two friends and allows travelers to rent spaces from
hosts, or people who have vacant space in their homes. While relatively new, Airbnb’s
current worth is $25.5 billion (Carson, 2015). Over the few years Airbnb have been
operating, the service has generated much attention. More than 60 billion individuals have
used Airbnb in 34,000 cities and 190 countries. Further, there have been 2 million listings
worldwide (Airbnb—Recapping Day 1 of Airbnb Open, n.d.).
In spite of their success, Airbnb struggles to communicate a positive brand image to
potential new users. This disconnect is largely based on mistrust of the company and is
affecting the number of people who decide to become members. Overstep Communications
recommended to focus on students and professionals, 18 to 34-years-old, because our
research showed that these two groups use travel sites to book travel accommodations.
Expanding into the Chinese and Korean markets provides multiple opportunities for
Airbnb because of a growing number of international and domestic tourists in these areas
(Travel China Guide, 2015; Statistics Korea, 2015). Our research showed that there are not
any significant differences seen between students and professionals among the different
markets, except for China. Thus, the proposed campaign Overstep Communications
constructed focuses on targeting millennials in America, China, and Korea. Additionally, the
Chinese and Korean markets will push Airbnb to develop a more trusting personality, as
these two are most concerned with the trustworthiness of the service.
Lastly, the proposed campaign will revolve around increasing the number of people
who sign up to become members. The advertisements will include informative and
emotional appeals and be placed online through banner advertisements and social media.
6. 2
Introduction
When booking travel accommodations, there are many sources used. As found in
our research, people tend to look for accommodations that have good security in the area
and that are clean, such as the multitude of online sources available, and this service is an
up and coming form of one of these services. Airbnb provide different alternatives to hotel
accommodations during travels. Hosts of Airbnb rent out rooms or their entire homes to
people looking for a different accommodation when traveling to a new destination.
Founded in 2008, Airbnb has grown significantly (About Us, n.d.). They began in San
Francisco and destinations can now be found all around the world (Airbnb, n.d.). Currently,
there are Airbnb listings in 34,000 cities and 190 countries (About Us, n.d.). The service is
becoming more popular; however, there are still a few challenges.
Since Airbnb were founded in 2008, the company is still relatively new and this is
apparent in the knowledge, or lack thereof, the service (Harris, 2015). Airbnb is a service
that, while convenient, also draws some skepticism from consumers. The goal is to reduce
the skepticism; to get more people to sign up to become members. That way, members will
be able to search for a wide variety of different options and increase traffic to Airbnb’s
website.
7. 3
Marketing Problem
Airbnb continue to grow and rise in popularity. Last year, they valued at $25.5
billion (Winkler, 2015). Yet, Airbnb faces many problems that prevent the valuation from
increasing. The biggest challenge Airbnb encounters is lack of awareness. Morgan Stanley
conducted a survey and of those respondents who have not used Airbnb before, 59% said
that they have not heard of Airbnb (Harris, 2015). Therefore, the problem needs to be
addressed in this campaign so more people sign up to become a member and the valuation
of the company can increase.
Additionally, Airbnb users and non-users have security concerns (Harris, 2015). In
the same study by Morgan Stanley, 32% of respondents have privacy concerns while 27%
have safety concerns with Airbnb (Harris, 2015). Security issues present a huge challenge
for Airbnb, especially for non-users who are most likely not going to try the service.
Consequently, Airbnb needs to assure consumers that they can be just as safe when staying
in an Airbnb listing as when staying in a hotel.
All in all, Airbnb’s future campaign needs to address these concerns in order to
accomplish their marketing goal, which is to get the target audience to sign up to become
active members.
8. 4
Situation Analysis
Company Analysis
History
As mentioned previously, Airbnb was founded in 2008 when 27-year-old
roommates, Joe Gebbia and Brian Chesky, were struggling to pay their rent. According to an
interview featured in The Telegraph by Jessica Salter:
They had met five years earlier at Rhode Island School of Design. When they heard
about hotels running out of rooms due to a design conference in San Francisco,
Gebbia and Chesky jumped on the opportunity. They rented out three airbeds on
their living-room floor and cooked their guests breakfast the following morning.
After the stay proved to be successful, Gebbia and Chesky created
AirBedandBreakfast.com, receiving renters just six days after: “a 30-year-old Indian
man, a 35-year-old woman from Boston, and a 45-year-old father of four from Utah
sleeping on their floor for $80 a night.” The two young men realized this website
could grow into something amazing (Salter, 2012).
Both Gebbia and Chesky wanted to be entrepreneurs, but neither had a desire to
create more “stuff that ends up in landfill,” so creating a website that would allow people to
rent something that already existed was a great idea (Salter, 2012). After enlisting former
roommate, Nathan Blecharczyk, they began to officially develop the website. In summer
2008, President Obama was due to speak in Denver at the Democratic National Convention
and 80,000 people were expected to attend (Salter, 2012). With another shortage of hotel
rooms, Gebbia, Chesky, and Blecharczyk finished and launched the website two weeks
20. 16
SWOT Analysis
Strengths:
First and foremost, Airbnb are part of a growing economic movement: the sharing
economy. The sharing economy is “a socio-economic ecosystem built around the sharing of
human and physical resources,” (Matofska, n.d.). What makes Airbnb so special is that they
encompass some of the many aspects that are crucial to creating a successful sharing
economy, one of those being people. Airbnb allow for people all over the world to
communicate in ways that we never thought possible. Through this, Airbnb create an
authentic experience (at a relatively reasonable price) people cannot receive when booking
a hotel.
Additionally, the founders’ simple idea of purchasing and renting out three air
mattresses in their apartment not only helped them with their rent dilemma, but
encouraged them to expand on that concept and create a company that is flourishing today.
Because they are a new company, Airbnb have been able to build and create new ways to
out-do the hotel industry. One of these ways includes providing 24/7 customer service.
According to GetHuman, this service is strictly for Airbnb users and allows hosts or
travelers to call any time to report an issue; ask a question about billing, sales, or more; or
share a comment (Airbnb Support Channels Compared, n.d.). With an average wait time of
approximately 15 minutes, Airbnb do their best to try and be there for their customers in a
timely manner. Further, they now offer host protection insurance (now covering $1 billion
per booking) (Airbnb-Host Protection Insurance, n.d.).
In addition to their newness, Airbnb are sleek and modern, radiating a trendy image
for the typical young consumer. The effortless, minimal style of the website, easy
24. 20
● Proposition F→ San Francisco law that allows Airbnb to have hosts in this area
● Safety of self and possessions is not guaranteed for travelers
● Original idea but susceptible to potential copycats (Xiaozhu.com, for example)
● Airbnb is direct middleman between a host and the traveler
● Relies heavily on quality of the host; bad reviews directly affect the progression of the
company
● Not easily accessible for disabled individuals
● Newness means skepticism from many
● Does not include all services some hotels may include like parking, breakfast, travel
accommodations, etc.
Opportunities:
Still, Airbnb can tackle opportunities like expanding their market to Chinese and
Korean audiences before Xiaozhu. Blecharczyk shared that Airbnb’s newfound focus on
China is due to an increase in demand in the country (Horwitz, 2015). Because much of the
Chinese target audiece is unbiased towards hotels and Airbnb, they will approach Airbnb
with a fresh perspective. Also, China has a large supply of vacant homes-- more than 50
million in urban China--which have become hotspots for vacation use (Jim, 2015).
In Korea, Airbnb have been met with resistance. Introduced in the country in
January 2013, Airbnb were deemed an “illegal activity” (Leem, 2016). In Will Airbnb Be
Feasible in Korea?, Yoon-Kyung Leem mentioned a Korean surnamed Jung was fined
700,000 won, Korean currency, (100,000 won per traveler a day) for violating the Public
27. 23
● Celebrities are using Airbnb (Beyonce, NFL player from the 50th Super Bowl, and
Ronaldinho)
● Charity opportunities
Threats:
Unfortunately, Airbnb still face many issues today. As mentioned before, their idea,
while interesting, is easily replicated. However, Airbnb’s unique selling proposition (USP) is
that travelers can experience another culture, lifestyle, or a new city by booking an Airbnb
listing. Airbnb provide travelers with an experience they will never forget. HomeAway and
Xiaozhu are just a couple of the growing amount of competitors for Airbnb. HomeAway
provide the traveler with the entire home and Xiaozhu are slowly but surely gaining
momentum in China, ruining Airbnb’s plans to capture the increasing amount of Chinese
travelers. Xiaozhu’s strength largely comes from their in-depth understanding of the
Chinese market.
With a business model based solely on communication between renters and hosts,
and Airbnb acting as the middlemen, complications are bound to emerge. Their first major
problem was in 2011 when a host named EJ wrote a blog post explaining how her
apartment was ransacked by a renter:
They smashed a hole through a locked closet door, and found the passport,
cash, credit card and grandmother’s jewelry I had hidden inside. They took
my camera, my iPod, an old laptop, and my external backup drive filled with
photos, journals… my entire life… The death-like smell emanating from the
31. 27
Target Audience
Secondary Research
To choose a target audience, there were many sources used to determine what the
best options were. Sarbjit Nahal, Head of Thematic Investing of Bank of America Corp. in
London discussed that millennials are using experiences to help shape their identities and
creating memories that they can share with their friends, which includes sporting events,
the sharing economy, and travel to name a few. In addition, a survey by Harris Poll and
Eventbrite Inc. found that “78% of millennials would rather pay for an experience rather
than a good” (Costa, 2016).
The chosen target audience, adults ages 18-34, includes 67.6 million people
(Simmons Research OneView, n.d.). In this target audience the focus was millennials of
both professional and student standing because they are known to travel frequently. In July
2014, Airbnb launched Business Travel on Airbnb, which is a “service that helps business
travelers’ search and book accommodations” (Fuscaldo, 2015). Considering this, it is
important to investigate whether there is a difference in product use between the two
target segments.
In addition to American millennials, Korean and Chinese millennials were chosen as
well. Airbnb are a global service, who are really trying to break into the Asian market. It is a
large population and has an increased number of travelers. It should be noted that while
Airbnb are starting to establish themselves in China, they have yet to become an
established source in Korea. According to Lee Woo-young, Gebbia shared “Korea was
growing faster than any other Asian market in its accommodation information sharing
service” (Lee, 2013). There has been a 758% growth in the sharing economy in the Korean
51. 47
Campaign Goals
Marketing Goal
Airbnb provide services that need to be more established. Overstep
Communications believe that Airbnb need to have more members from around the globe.
The intent of the Marketing Goal is to increase the number of members on Airbnb’s
website. When people visit Airbnb.com, they have the option of signing up to become a
member. In doing so, they will be able to create a profile and gain the opportunity to search
for listings.
Searching through listings may lead to bookings. Through an increased purchase
rate, repeat purchases are more likely to occur. The sign up rate should be increased by
10% by the end of the calendar year, December 31, 2017. By accumulating more members,
along with maintaining those who already use the service, Airbnb will position themselves
as the go-to service and establish place in the market.
Campaign Timeline
American Campaign
Based on our Primary Research, which states that most Americans travel during the
summer, Overstep Communications should mainly put the advertisements on the media
outlets from January 2017 to August 2017 because these are the times when people book
summer vacations. Overstep Communications would like for the advertisements to be
exposed all other months of the year, creating a pulsing media model. In doing so, Overstep
Communications will be able to establish awareness of Airbnb when the target audience
begins planning their summer trips. Further, beginning in January gives the target audience
56. 52
Recommended Creative, Media and Promotional Strategies
Creative Approach
For the creative strategy, there are a few ideas that would be beneficial to Airbnb.
The target audience is exposed to high ad clutter. It has been said that people are exposed
to 3,000 advertisements per day (Myszewski, 2015). With this in mind, in order to capture
the target audience in a way that makes a large impression, the ad must be eye-catching
and unique. The chosen media will allow for greater impact and resonation with the target
audience. The ads will be unobtrusive to their lives. Overstep Communications understand
that people do not like being bothered by advertisements, such as pop-up adverstisements,
so by creating unobtrusive, yet creative and attention-grabbing versions, there will be no
harm done to the target audience. The appeals will be both emotional and informative
since the TAs in all markets have some degree of a lack of trust, lack of awareness, and
safety concerns with Airbnb.
According to the FCB Grid, which is a resource that helps develop an ad campaign
creative strategy, Airbnb provide a high involvement service (Parente & Strausbaugh-
Hutchinson, 2015, p. 178). Because of this, Airbnb fall into both the informational and
affective quadrants. The target audience needs a clear understanding on what Airbnb have
to offer, and establish a connection to Airbnb (Parente & Strausbaugh-Hutchinson, 2015, p.
179). In addition, this campaign needs to address Airbnb’s unique selling proposition
(USP), which is that after booking with Airbnb, users can temporarily experience what
living is like in another life. Whether that is experiencing another culture, lifestyle, or
simply a new city, Airbnb provide an experience travelers will never forget. By featuring
the USP in the campaign, it will allow for a “persuasive advantage” and will “force
61. 57
Summary
Overall, Overstep Communications understand what the problems and
opportunities associated with Airbnb are when it comes to the TA’s mind. That being said,
the implications that this has can be fixed through the campaign as aforementioned. It will
help to alleviate these complications and create a better awareness and usage of Airbnb.
The strategy suggested by Overstep Communications is simple yet well-rounded in
reaching the intended target audience. By running this campaign, Airbnb will welcome
more people to sign up for membership.
The online and social media components will pull potential users in and spark their
interests in what Airbnb have to offer. In the future, Airbnb will become more prominent
in consumers’ minds and be more likely to make them loyal customers. With the
combination of the recommended campaign and Promotional Strategies, both the
Communications and Marketing Goals will be achieved and Airbnb will become more
established in the marketplace. With their establishment, more people will book travel
accommodations through Airbnb and they will become more prevalent than the typical
hotel or motel options the target audience currently utilizes.