Airbnb pays its agencies on a “per night” basis
Airbnb chief marketing officer Jonathan Mildenhall has revealed that the brand’s agencies are paid on a “per night” basis where they take a cut every time accommodation is booked through the site.
Speaking at the Cannes Festival of Creativity in France today (22 June) he discussed the appointment of TBWA as its first global creative agency, and Starcom MediaVest to media buying, in September last year.
Mildenhall - who joined Airbnb from Coca-Cola and prior to that spent 13 years working at agencies Mother, TBWA and BBH said his biggest concern is that the traditional agency compensation model is “squeezing the life out of creativity” particularly as marketing budgets become increasingly restricted.
“A huge source of brand vitality comes from agencies and as marketers we’ve got a huge responsibility to enable those agencies to stay vital and recruit the very best people. And a lot of that comes down to compensation models,” he said.
“Too many client are squeezing the financial lifeblood out of advertising agencies and then they complain that the work’s not great. The compensation models and creative aspirations of many brands are not aligned.”
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The Airbnb model aims to address the discord, incentivising agencies to create work that will help the business grow and in turn allow them to recruit the best talent.
“Looking to the future, the lifeblood that TBWA will bring to Airbnb is going to be very rich and dynamic, as we’re paying for it,” he said.
His comments came amid a wider discussion of how data is helping, or indeed hindering, creativity.
Mildenhall suggested that the former be treated with caution, as he’s seen “a massive abuse of data” throughout his career as too many organisations simple don’t know how to handle it.
“Working with talented people who understand how to use data to build a foundation on which the creatives are asked to work; that’s pretty robust. When you get those people handling data it can be a springboard [to creativity].
“But the problem is in most organisations you don’t get intelligent people managing the data. And they use it to bulldoze creative ideas. And that’s heart-breaking.”