Growing Our Host Community with Online Marketing

Which ads should we buy? How much should we pay for each ad? How should we measure the performance of each ad? We built a marketing system to help answer these questions.

Belonging is at the core of Airbnb’s mission. One essential step to make people feel like they can “belong anywhere” is to have homes where people can stay around the world. Airbnb is a community-driven super-brand, and acquiring hosts through the community’s word of mouth has been an important channel for growth. However, as we have continued to grow our business, we need to find new ways to acquire hosts and homes, and to find ways to truly help people “belong anywhere” — which means not only in big cities like San Francisco, London and Paris, but also in less populous countries such as Bolivia and Nepal, where only very few people may have heard about Airbnb.

Online advertising is one of the most effective ways to reach potential new hosts and to increase awareness about Airbnb. It includes email marketing, search engine marketing (SEM), social media marketing, and display advertising. After extensive research, we have developed an internal online advertising system to expand our host base, and the number of hosts acquired through online advertising system has grown exponentially. During the system development, we found that abundant information is available about how advertising platforms such as Google and Facebook monetize with advertising, but there is only very limited information about how large marketplaces like Airbnb can fully utilize these platforms.

What is the Problem?

We want to maximize the return on a given budget by acquiring new hosts through online advertising. This can be partitioned into two sub-problems:

1.Which ads should we buy?

2.How much should we pay for each ad to be shown on an advertising platform?

In short, when you visit a supermarket you should know what you need to buy and what to pay for each item.

The ultimate goal of our marketing system is to automatically generate ads, set and adjust bids, and allocate budgets in order to hit key business objectives and goals. The system should also support performance reporting and ads experiments analysis and visualization

The Life of an Ad

At the high level, here is a diagram describing the life of an ad:

                         Life of an ad

Ads are created on online marketing platforms and are displayed to users when certain criteria are satisfied. Users click on the ads and land on Airbnb’s host landing page. Airbnb will log the click landing event. Users with intent to list their spaces on Airbnb will go through the new host on-boarding experience — List Your Space (LYS) flow. By the time a listing gets its first booking on Airbnb, we estimate the Lifetime Value (LTV) that this listing can bring to Airbnb. We then look at previous ad click events that lead to this listing conversion. This conversion will be attributed to relevant ads, which will share the listing LTV.

After collecting data from many conversions, we can infer the value of each ad. All of this information will be used to compute bids and allocate budget for each ad. Finally, bids and budget are set on online marketing platforms (e.g., Facebook or Google). This completes the life cycle of an ad. By looking at the life cycle, we can clearly see several main components of a marketing system: click tracking, attribution, LTV estimation and bid and budget optimization.

Becoming a Host

We first look at the experience of becoming a new host on Airbnb and see why it is challenging to build a marketing system specifically for host growth.