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How Airbnb Measures Listing Lifetime Value
- Airbnb calculates listing lifetime value to understand valuable accommodation listings for guests and help hosts increase listing value.
- Their framework estimates baseline LTV, incremental LTV, and marketing-induced incremental LTV, segmented to inform supply expansion strategy.
- Challenges in lifetime value estimation arise in multi-sided platforms like Airbnb, where transactions of one listing can impact another.
- Incremental LTV is estimated by subtracting cannibalized value from baseline LTV, addressing the challenge of accurately measuring value added by each listing.
- Marketing-induced incremental LTV measures the additional value created by internal initiatives like marketing campaigns for listing improvement tips.
- The estimation framework focuses on accurate baseline LTV, leveraging machine learning and listing features to predict future bookings.
- During the pandemic, Airbnb faced challenges due to changes in travel dynamics, with strategies implemented to improve model accuracy.
- To handle uncertainty, daily adjustments are made to expected values based on accrued values and updated listing features.
- Estimating lifetime value helps Airbnb provide a better user experience and informs decision-making for listings and marketing campaigns.
- This measurement framework may also extend to other applications, such as Airbnb Experiences listings, to determine the value of experiences based on travel trends.
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