In the past few years, we have seen the rise of businesses involved in the “sharing economy” – platforms for facilitating peer-to-peer transactions of goods and services by different people and organizations. Companies like Uber, Taskrabbit, and Instacart (to name just three based right here in San Francisco), leverage information technology as a part of the economic phenomenon, collaborative consumption.
Does a “sharing economy” company pursue a different digital marketing strategy? And does it pay off?
During the holidays, many of us think about travel. Which brings us to one of the originals in the sharing realm — another local company made good, Airbnb.
Let’s compare Airbnb to a more traditional online travel agency (OTA). We’ll look at Priceline, founded in 1998 — exactly 10 years before Airbnb. We’ll start with a simple Site Comparison.
One thing stands out about Airbnb: its users are far more engaged.
Airbnb’s average “Time on Site” is more than double that of Priceline. What’s making Airbnb’s users stick around so long?
Priceline is very transactional, and transactional e-commerce sites tend to focus on reducing friction – getting the customer through the conversion funnel as quickly as possible before they get distracted by a competitor or develop second thoughts.
Airbnb makes a point of using big, beautiful pictures and evocative descriptions. It wants you to slow down and stay awhile. It’s also invested heavily in custom local content, serving as a travel guide to its top destinations.
An even more striking difference is seen in a comparison of traffic sources, which highlights further the importance of social:
Priceline gets 0.76% of its traffic from social, which is in range of other traditional OTAs like Expedia and Travelocity. But Airbnb’s social traffic is closing in on a whopping 4%.
Looking directly at the companies’ Facebook pages tells a similar story, where Airbnb boasts 1,195,374 likes and Priceline trails with 652,793.
Is an investment in compelling, custom content actually driving more traffic to Airbnb’s website? Let’s go back to that Site Comparison and look at our favorite KPI, the Alexa Rank, over the past two years:
Airbnb’s popularity has accelerated over the past year, with no signs of stopping. At this rate, Airbnb will overtake Priceline in the next few months.
And right now, its reach is almost at parity. Its reach actually surpassed Priceline’s in both July and August of this year – the crucial summer travel season.
When you think about it, the concept of a sharing economy is not unlike social sharing. In social sharing, you share because content interests you, because you want to be an expert, or because you have something others might also value. This purpose overlaps the sharing economy, where it’s about access, not ownership. Here, you also share what others may find valuable.
Knowing that 71% of consumers are more likely to make a purchase based on social referrals, the strategy of companies in the sharing economy actually makes good business sense. The platforms of sharing companies are being built for a generation that is already heavily invested socially. And their interfaces are meant to mirror those that people interact with daily.
According to Pew Research, 89% of adults ages 18-29 use social networking sites, followed by 82% of adults ages 30-49. When we compare demographics for both sites on Alexa, we see that both of these highly engaged user groups are over-represented at Airbnb.
Per Joe Kraus, general partner at Google Ventures, people find value in sharing economies for economic, environmental and lifestyle reasons. Now, they have convenient access to what they need, with convenient access to a (social) community of people who value the same things they do. It’s a win-win, and as a result, companies are making major changes in the way they market.
Would Priceline do as well to invest in social and content? A strong social orientation is a particularly great fit for a peer-to-peer platform like Airbnb. But unlike Airbnb, Priceline is not doing much to get its users to share. And whether or not sharing is the future of travel, as evidenced by the traffic metrics for these two companies, it’s likely the future of digital marketing.
How social is your brand? Are you delivering differentiating value on platforms that are socially accessible for your audiences?