Moats and ditches from brand and generic traffic6 min well spent

One habit I stopped when the Covid pandemic broke out was staying at Airbnbs. One that I started was ordering groceries through Doordash. And yet, both recently went public with major success. Airbnb raised $47 billion in its IPO and is way more sensitive to the pandemic than Doordash, which almost tripled its revenue year-over-year in the first nine months of 2020 (source).

They have many differences between them – not just the impact of Covid – but also many things in common. One sells trust, the other convenience. Both rely on SEO (and mention it several times throughout their S-1 prospectus). One is highly differentiated; the other competes in a winner-takes-it-all market. Both are consumer marketplaces. And both grow on Google and compete against it at the same time.

Differentiation versus speed

The difference in differentiation shows that while Doordash competes in a tight race with Grubhub and UberEats (which recently bought Postmates for $2.65b), Airbnb doesn’t face the same type of competition.

This becomes painfully obvious when we compare brand with non-brand traffic. According to SEMrush, only 15% of Doordash’s ~39M monthly visitors come through branded keywords. For Airbnb, it’s almost the exact opposite: 17.3% of traffic is non-branded (2.4 out of 13.8M monthly visitors).

Filtering both domain’s keywords for top 10 positions and excluding brand keywords, Doordash shows much stronger growth while Airbnb has been flat since January 2018.

Doordash's organic traffic for top10 keywords (brand filtered out)
Doordash’s organic traffic for top10 keywords (brand filtered out)
Airbnb's organic traffic for top10 keywords (brand filtered out)
Airbnb’s organic traffic for top10 keywords (brand filtered out)

In fact, even Airbnb’s strongest alternative, VRBO, has much more non-brand organic traffic. However, even VRBO’s non-brand traffic is dwarfed by Airbnb’s direct traffic.

VRBO vs Airbnb traffic channels
VRBO vs Airbnb traffic channels

Airbnb’s brand is so strong that it could even allow itself to turn down $800m in Google Ads spend in March (source) and still perform well.

Doordash, on the other hand, faces strong competition in SEO. Postmates, UberEats, and especially Grubhub are very visible on search engines for non-brand keywords (see below).

Ubereats organic traffic
Ubereats’ organic traffic
Postmates organic traffic
Postmates’ organic traffic
Grubhub's organic traffic
Grubhub’s organic traffic

That creates a much more competitive market with little room to stand out. Doordash came out on top by focusing on suburbs over cities and with loads of cash (source) and achieved a ~50% market share in November 2020 (source). But SEO certainly played a big part in this growth story.

The best testament to the difference is that Doordash ranks for “{food} near me” while Airbnb ranks for “airbnb near me” queries.

I want to raise two interesting questions at this point. First, Doordash will be able to build strong enough moats not to be too dependent on SEO? Second, is Airbnb’s brand an advantage in its competition with Google?

With and against Google

Both players state the importance of organic traffic explicitly in their investment prospectus – and both also cite competition from Google.

Doordash’s S-1 citing the important of SEO traffic
Airbnb's S-1 citing competition from Google
Airbnb’s S-1 citing competition from Google

Doordash competes with Google’s local knowledge panels that allow users to order right in the search results. As if top ads wouldn’t be enough for the search results page, Google also allows food delivery service to bid in the local knowledge panel. This isn’t a threat to Doordash as long as it bids more than Grubhub. That same ad appears on Google Maps as well.

Google's local knowledge panel with food ordering feature
Google’s local knowledge panel with food ordering feature

Airbnb faces a similar challenge, just with Google Hotel, a panel that appears in front of local hotel or rental searches and attracts massive attention. Once again, brands can “bail themselves out” by bidding on ads on top of the panel, but it’s a problem for organic search.

Google Hotels for "big bear cabins"
Google Hotels for “big bear cabins”

The difference I see between Doordash and Airbnb is that Airbnb has the brand and differentiation not to be as impacted by Google Hotel because it gets a lot of direct traffic. It’s less vulnerable to competition from Google. Doordash, on the other hand, has a strong dependency and needs to build that muscle. That doesn’t mean that Airbnb can rest on its brand. It’s attackable in SEO.

The conclusion is, then, that both brands need to get what the other has. Airbnb should build a moat with a higher investment in SEO, Doordash with a higher direct traffic investment.

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