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Brand Strategy Brand Marketing Tesla

A tale of two global brands: what Tesla and Airbnb teach us about marketing extremes

By Jenny Sagstrom, Chief executive officer



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July 21, 2023 | 8 min read

Jenny Sagstrom of Sköna looks at two marketing radicals: Tesla, which is just starting to dabble with serious marketing, and Airbnb, which has ascribed its newfound profitability to a shift away from performance.

A Tesla car

/ Tesla Fans Schweiz via Unsplash

Most marketers never get the opportunity to work on a campaign that goes to creative or strategic extremes. For one, we’re rarely given the budget for that kind of thing. But more importantly, we’re beholden to results, even when those results are hard to quantify.

Some brands, however, have the budgets and recognition to take things to the extreme, and though it may not be possible (or even advisable) to follow in their footsteps, we can glean some valuable lessons from them.

Take Tesla and Airbnb: their marketing approaches sit on two opposite ends of the spectrum: where Tesla has made (overall) miniscule performance marketing efforts over the years, Airbnb has recently massively shifted away from performance and search marketing, towards brand marketing.

Here’s what we can learn from these extremes:

Airbnb: brand marketing is the long game

Airbnb started this year with its first-ever profitable quarter. This growth has been attributed to a 2021 change in marketing strategy that reduced overall spend by shifting resources away from performance and towards brand marketing.

Though I love brand marketing, I wouldn’t say this is a feasible strategy for just any brand. This strategic change came after the company had already gone public and at a time when 90% of traffic arrived directly to their website.

Over the years, Airbnb’s marketing has included launching digital and OOH campaigns, working with influencers, using user-generated content, creating immersive experiences, offering referral codes, innovating on their product offerings, and consistently creating a smooth user experience.

But above all, even while still carrying out performance-marketing activities, Airbnb has always invested in its brand and differentiated itself by defining its mission and values.

That kind of clarity on brand values became a north star for all business decisions. Even tough ones like layoffs and addressing racial discrimination.

But before you put all your money into the brand marketing budget, remember that brand marketing is a long game. It starts with getting really clear on what you stand for as a brand. Putting that work in now will pay dividends, but not immediately, so don’t give up on performance altogether.

Tesla: a good product only takes you so far

After years of marketing efforts being driven by email campaigns, word of mouth, and the ongoing presence of Elon Musk’s name in headlines, Tesla recently announced they were ready to dabble in advertising. In regards to using his own Twitter account as a source of Tesla marketing, Musk commented, “it is preaching to the choir, and the choir is already convinced.”

Where Airbnb is an example of brand marketing being the long game, Tesla is a cautionary tale of what happens when you put too much emphasis on short-term, performance-based marketing. Until now, Tesla has been able to rest on the laurels of a stellar product and the allure of exclusivity that comes with being invited into the Tesla Owners Club.

But a good product can only take you so far. Eventually, you’re going to have to bring new folks into your funnel, and that’s hard to do without a strong brand. In this case, we can also learn a second lesson: the Tesla brand is too closely tied to its chief executive.

After Musk acquired Twitter last year, Tesla shares plummeted, only to rise again after hiring a new chief exec. Clearly, the notion of Tesla shares being tied to Twitter is not benefiting either party.

Still, Tesla’s overall brand reputation on the Axios-Harris Poll is surprisingly good considering Musk’s unpredictability and some scary product malfunctions. Further inspection, however, indicates lower scores for ‘trust and ‘character’ – issues best addressed through branding efforts.

If you’re hoping your product can do the heavy marketing lifting for you, ask yourself: is your product more powerful than a Tesla?

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Find a marketing balance with ‘brandgen’

Most companies are going to need to find middle ground between these two extremes, something I like to call ‘brandgen’. When the pressure is on for growth, performance marketing feels like the safer bet, but it only addresses those customers who are already in the market to buy. In the B2B world, that’s only 5% of your potential customers.

Done well, brandgen marketing also builds long-term brand awareness, pulling more folks into the top-funnel while not forgetting about the performance marketing aspects lower down.

This could look like putting effort into a really fun, creative piece of content that lives on your landing page and shows your audience what your brand is all about. Meanwhile, you can still put spend toward performance marketing. Brandgen is all about striking a strategic balance between long- and short-term metrics. Think of it as the best of both extremes.

Brand Strategy Brand Marketing Tesla

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Sköna is a B2B creative agency specializing in marketing, branding, and design for innovative tech companies. Founded in Silicon Valley in 2003 and with offices...

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