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- Brian's comments about Airbnb's approach to performance marketing are used to imply that Airbnb's lessons apply to other businesses. Very few businesses - esp

- Brian's comments about Airbnb's approach to performance marketing are used to imply that Airbnb's lessons apply to other businesses. Very few businesses - especially those that start from small numbers and need to grow them - have 90% of their traffic mix come from repeat customers. Using Brian's comments helps fuel the narrative that brand marketing is a better investment than performance marketing, which is correct in some cases (Nike, Airbnb), and not in others (most startups). Also, as another member pointed out, Airbnb's performance marketing budget is still well over $200M/year, which no responsible/public company would spend if it wasn't returning a great ROAS. Finally, Airbnb is known for all sorts of marketing shenanigans in their early days, and they certainly can't take the credit for a pure brand play. - Calling performance marketing platforms a scam (repeatedly, both in the title and in the narrative) doesn't explain how those same performance marketing platforms are carrying the majority of traffic acquisition in most of the B2C companies that went public this year (and practically all of the DTC ones). Calling into question the accuracy of measurement is one thing. Calling it a scam is wrong and designed to rank on HN rather than to be reflective of the true value of those platforms. - As I pointed out in my original post, all you have to do is use incrementality studies and 98% of the criticism instantly goes away. Rand implies that you have to do your own studies (by eg, following Avinash Kaushik's methodology) which is 100% wrong - Facebook will do them for you if you reach a certain spend limit, or 3rd parties will as well with no spend limits. Also, from experience, this really becomes an issue once you spend meaningful amounts on two platforms at the same time. His rant on this subject has an iota of truth and a whole lot of sensationalism mixed together, and overall leads to wrong conslusions. - He conflates "paid search" with "all performance marketing platforms", including "paid social." It would have been helpful to point out that the challenges with branded terms are entirely isolated to paid search and have nothing to do with paid social. - My favorite sensationalist tactic: frame a strong accusation as a question. This way you get the clicks, but you can still cover your ass by linking to resources that with enough research would allow the reader to answer the question with a "No." But in lieu of that research, the implication is that the answer is a "Yes." You'll see this tactic used by less reputative media sources, and I was disappointed to see Rand do the same. I could go on but hopefully this will suffice.

lostinquebec 5y ago
Your first point is very hopeful, but not what I've experienced. The bigger the company, the more slack for bad decisions. Your other points I think relate to scale. No advice can be universal, and if you read the article as absolutist, your take makes sense. If you read it as "hey, your mix is likely wrong", a lot of the criticism fades. I think we've lost a bit of creativity in marketing. The Lego movie example is a really good one. I think it is probably good this happened, as a lot of creativity was performative (how do I win an ad award/impress my peers) and not about increasing sales, but we've perhaps shifted the balance too far, and there is likely some areas with good ROS that are now better bets.
- aerosmile 5y ago
  Scale brings both, headwinds and tailwinds. The outcome often hinges on how the balance of those two forces plays out. Ecommerce example: every year the CPMs go up and your paid margin goes down. But every year you have a larger email list, so the balance of paid to unpaid shifts. General example: every year you get more of the late-stage employees who care less and less about your company. But every year you can afford to pay for more layers of management, which will keep an eye on the underperformers. This list goes on and on... The headwinds are driven by external forces, whereas the tailwinds end up working out based on your specific execution of the opportunities that present themselves to you. This is where an experienced operational team can make a huge difference. > I think we've lost a bit of creativity in marketing. You absolutely cannot rely on performance marketing forever. It's a shot in the arm until you have reached enough [fill in whatever you wnat] so that you can leverage that momentum to reach the escape velocity. So it's not good forever, but it's a great catalyst.
NumberCruncher 5y ago
> Rand implies that you have to do your own studies [...] which is 100% wrong - Facebook will do them for you So FB, who earns on my spending, offers me to measure for me whether my spending makes sense for me. Why would FB ever tell me to spend less? Don't they like money?
- 5y ago

lostinquebec 5y ago

Your first point is very hopeful, but not what I've experienced. The bigger the company, the more slack for bad decisions. Your other points I think relate to scale. No advice can be universal, and if you read the article as absolutist, your take makes sense. If you read it as "hey, your mix is likely wrong", a lot of the criticism fades. I think we've lost a bit of creativity in marketing. The Lego movie example is a really good one. I think it is probably good this happened, as a lot of creativity was performative (how do I win an ad award/impress my peers) and not about increasing sales, but we've perhaps shifted the balance too far, and there is likely some areas with good ROS that are now better bets.

aerosmile 5y ago
Scale brings both, headwinds and tailwinds. The outcome often hinges on how the balance of those two forces plays out. Ecommerce example: every year the CPMs go up and your paid margin goes down. But every year you have a larger email list, so the balance of paid to unpaid shifts. General example: every year you get more of the late-stage employees who care less and less about your company. But every year you can afford to pay for more layers of management, which will keep an eye on the underperformers. This list goes on and on... The headwinds are driven by external forces, whereas the tailwinds end up working out based on your specific execution of the opportunities that present themselves to you. This is where an experienced operational team can make a huge difference. > I think we've lost a bit of creativity in marketing. You absolutely cannot rely on performance marketing forever. It's a shot in the arm until you have reached enough [fill in whatever you wnat] so that you can leverage that momentum to reach the escape velocity. So it's not good forever, but it's a great catalyst.

NumberCruncher 5y ago

> Rand implies that you have to do your own studies [...] which is 100% wrong - Facebook will do them for you So FB, who earns on my spending, offers me to measure for me whether my spending makes sense for me. Why would FB ever tell me to spend less? Don't they like money?

5y ago