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.
This post will provide an architectural overview of the marketing system we built and discuss the main issues that were tackled in the system.
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:
- Which ads should we buy?
- 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:
