By now, Airbnb is a household name, and together with Uber, it is usually presented as the pinnacle of what a managed marketplace could become. Their immense growth shows just how much global impact a well-managed marketplace can have.
Multiple factors contributed to their worldwide success, but in this piece, we will be looking at how the visual side of the business helped the company expand.
And just in case you’re not convinced that managed marketplaces are the future, the global sharing market alone is estimated to generate $335 billion by 2025 (PwC report 2015). Just one out of the dozens of Airbnb copycats, a company called Xiaozhu, claims to have around 10 million online users!
*Authors note: All of the data & statistics used in this article were taken from a 2017 scientific study titled “How Much Is an Image Worth? Airbnb Property Demand Estimation Leveraging Large Scale Image Analytics”. My piece merely serves as a condensed summary & analysis of the work and the full document can be found here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2976021.
As I mentioned in my previous article, improving image quality in your marketplace has a positive effect on your customer experience as well as vendor satisfaction. There is a great deal of science behind this claim, and the authors of the paper highlighted 3 key components that differentiate amateurly-done listing pictures from professional, conversion-optimised visuals.Here’s what they are:
Composition is the arrangement of visual elements in the photograph that would lead the eyes of viewers to the centre of focus in a photograph (Freeman 2007).
In Layman’s terms, it’s making a picture aesthetically pleasing to a viewer. While not an advanced photography technique, this is still something that casual photographers often fail to achieve. In Airbnb’s case, this meant that specific guidelines had to be imposed for their property images.
Before these guidelines, hosts would provide their own listing pictures. Some were decent. Others were downright terrible.
To introduce consistency, Airbnb used professional photographers to shoot the properties of the hosts according to 3 principles of photography:
- Diagonal Dominance
- The Rule of Thirds
- Visual Balance
Did it work? Well, after analysing over 13,000 listings and over 380,000 pictures of Airbnb properties, the authors of the paper found that after introducing professional pictures, the frequency of booking went up by 7%. And while that may not sound like a considerable number, it applies to every optimised property listing. With over 5 million available listings, it was a massive deal to a quickly-growing company like Airbnb.
Colour is widely believed to affect the level of emotional arousal in viewers (Gorn et al 1997,2004)
It’s no surprise that customers prefer vivid & colourful property pictures over dull, unexciting ones. Through research, the authors of the paper found that certain methods of optimising picture colour had 2 distinctive effects:
- Highlighting warmer tones elicits more excitement and generates interest.
- Emphasising cool colours increases the level of relaxation for the viewer.
So whether you’re photographing a quaint, cosy apartment in a quiet part of town or a bright, expressive place in the heart of the city — professional colour optimisation results in a more emotional response from the customer. And an emotionally-connected customer is more likely to make a purchase.
The paper goes into great detail about the technical specifications of colour improvement such as hue, saturation, and brightness, but the main takeaway remains the same - images with optimised colours convert better.
To put it in monetary terms, the study authors found that improving colour attributes by one standard deviation can bring in an additional $6,790 yearly revenue per listing. In short - optimising picture colours is by far the most profitable improvement in terms of visual content.
*For comparison, improving the figure-ground relationship increases revenue by $3,453, while enhancing composition attributes only adds $2,510 of yearly revenue.
The figure-ground principles follow the gestalt theory, which states that things that share visual characteristics such as size, colour, and texture are seen as belonging together by viewers (Arnheim 1974).
The 3rd point, highlighted by the paper’s authors, is by far the most difficult to easily explain in writing but is very important for picture consistency. Photographers take figure-ground relationship into consideration when planning the composition of their photos. It is a way of distinguishing the specific details inside the image in contrast to its surroundings.
Based on the scientific research inside, the paper suggests that images with clear figure-ground separation would result in higher demand for the properties. In order to make the explanation clearer, here are the exact examples used in the work:
The 3 images in figure 9a show good examples of figure-ground relationship. In each image, the bed is the key focal point, but it is nicely highlighted by the contrasting surroundings. This gives the potential customer an easy overview of the room by highlighting the key object in it.
Comparing the images in 9b, you can see a lack of figure-ground relationship. It’s quite difficult to determine a single object that stands out from the background. While you could say that the bed in the middle image is the defining object, the lack of contrast from the surroundings makes it harder to distinguish. Compare it to the rightmost image in figure 9a, and the difference becomes a lot more pronounced.
How does this translate into a monetary gain? Well, the researchers looked at a generic Airbnb listing, priced at $174/day, and found that optimising images according to these quality specifications results in approximately $4,141 additional revenue for the host!
Together with the 7% increase in booking frequency, this brought more business to the property hosts as well as more customer bookings via the Airbnb marketplace. And all it took was an analytical approach to the science of conversion-boosting photography.
The immense success of Airbnb and their virtual market’s business model is a combination of multiple correct business practices. Emphasizing the importance of professional property pictures allowed them to increase their conversion and sales numbers, hastening their international scaling.
The main areas of photography that Airbnb focused on improving were picture composition, colour, and figure-ground relationship. On average, this optimisation increased booking frequency by 7% and resulted in over $4,000 of additional revenue for hosts. After analysing over 13,00 listings, the researchers confirmed the direct effect that image optimisation had on Airbnb’s business growth. An impact that helped propel Airbnb to the giant it is today, valued at $31billion.
In order to keep my article at least somewhat concise and easy-to-read, I had to exclude many of the statistics & examples that the authors used in their work. I also did not touch on the actual methodology used to generate their findings.
Therefore, I urge you to take the time to read the full thing. It’s definitely worth your time.