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Uber, Airbnb and how their affiliate marketing strategies differ

At first glance, Uber and Airbnb have a lot of similarities. They’re both unicorns and they’re often two of the first names thrown out there when the conversation turns to disruptors. Airbnb and Uber also have significant growth in common, thanks in part to partner and affiliate marketing.

However, the strategies there are almost diametrically opposite, as Keith Posehn, Head of Performance Partnerships at Uber, and Ashwin Krishnan, who does business development at Airbnb, discussed during the recent Impact Growth 2018 event.

A look at Airbnb’s affiliate marketing

Krishnan describes Airbnb as a two-sided marketplace: looking for someplace to stay and looking for someone to host. Unlike the Amazons and eBays of the world, the program is closed. Not just anyone can become an affiliate partner; Airbnb hand-selects them.

Airbnb has grown at such an incredible rate, which made the company far more brand-conscious. Having essentially outgrown some of its early partners, Airbnb is much more discerning with partners now.

“The nature of shopper behavior is drilled down to only a few sites in travel,” said Krishnan. “When people shop for travel, there are only a handful of partners that can drive the kind of scale that’d be a good fit for us.”

For Krishnan, a good fit is any company that complements thinking about traveling. Examples include “planes, trains, automobiles,” and publishers who create content around, say, traveling with pets.

Airbnb-traveling with pets

Understanding Uber’s partner strategy

On the other hand, Uber has a much more varied suite of products and services. There’s the core rideshare program, Uber for Business and an Uber Visa card. And then Uber Eats requires several different layers of partners, from the people ordering food to the restaurants supplying and the couriers delivering it.

“Some of our partners, we consume all of their inventory because we have to,” explained Posehn. “We have to keep acquiring partners to maintain this pace of growth because as we conquer a market, now we’ve got another market. We have to keep going to make that work.” 

As a result, Uber needs supply in order to build demand. If there aren’t enough drivers to pick people up quickly, consumers will grow impatient and desert the platform. That drives what Posehn referred to as the “feedback loop” where more partners means more drivers, who refer other drivers. That eventually results in more riders, who refer more riders as well.

Uber's driver referral program

“We need to approach partner marketing with the same rigor as any other sales development,” said Posehn. “We depend on partners. It’s not like Google, where I can add a keyword and set my bid and voilà, there’s more traffic.”

Proprietary platforms

Airbnb has traditionally focused on internal business development, convincing people on the inside what Airbnb can become to channel adoption. With so many different moving parts—management, attribution and reporting, to name a few—the company isn’t suited to build proprietary technology for affiliate marketing.

“We weren’t equipped for that so we brought on Impact to help us alleviate some of the internal burden any time we onboard a new partner,” explained Krishnan. “That helps collapse the business development cycle and accelerate the kind of adoption we get from partnerships.”

Technology is no longer a limiting factor in Airbnb’s momentum. On the other hand, Uber did build its own platform. That’s extremely difficult, given how much work it requires to maintain.

“When you try to build yourself, you accumulate technical debt at a staggering rate because you have to keep up with the system and how it needs to operate,” said Posehn. “You’re constantly paying down through engineering, so you’re acquiring operational debt at the same time.”

Looking ahead

Back to similarities: Uber and Airbnb are huge global entities that collectively operate just about everywhere. Even Nauru, a tiny South Pacific island that’s the least-visited country in the world, has two Airbnb listings.

Airbnb in Nauru

And both companies more or less work the same way in all of them. Uber drivers have the same playbook whether they’re in San Francisco or Saudi Arabia.

Something else Airbnb and Uber share is a plan to keep using affiliate marketing to facilitate growth. Airbnb sees dynamic content as a big growth opportunity at the moment, as well as enabling APIs to show publishers what’s available in real time. Similarly, Uber’s main focus is integration, which Posehn sees as the key to understanding data early enough that it can have an impact.

“We break down our lines of business where I can literally say, ‘profit for drivers equals these things in sequence and in a funnel,’” said Posehn. “The pro tip I’d give everyone now—it sounds very silly—is math.”

The post Uber, Airbnb and how their affiliate marketing strategies differ appeared first on ClickZ.

Reblogged 3 weeks ago from www.clickz.com

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