Airbnb yanks ads, apologizes for "poor judgment"

The line between clever and stupid in corporate advertising can be hard to discern. More clear, in the viral, virulent age of social media, is the cost of crossing it.

That's one lesson to be drawn from Airbnb abruptly withdrawing a series of ads in San Francisco following a barrage of online criticism. Rolled out earlier this week, the spots sought to highlight the $12 million in taxes the online apartment-sharing company says it generates for the city in hotel taxes. But in what Airbnb acknowledges was a mistake in tone, the ads also offers advice to different public institutions about how that money might be best spent.

"Dear Public Library System, we hope you use some of the $12 million in hotel taxes to keep the library open later," one bus-kiosk ad read. Said another ad, this one on a billboard: "Dear Board of Education, please use some of the $12 million in hotel taxes to keep art in schools."

Martha Kenney

Reaction online came fast and furious. Martha Kenney, an assistant professor in the women and gender studies department at San Francisco State University, teed off on Airbnb in a Facebook post:

I'm happy to hear that you paid your taxes this year. I did too! Isn't it awesome? However, I've crunched some numbers and I have some bad news for you. Out of your $12 mil of hotel tax, only 1.4% percent goes to the SF Public Libraries. So that's $168,000. Divided by the 868 library staff, we have $193 per person. Assuming each employee works 5 days per week minus holidays, this is $0.78 per employee per day. Since that's significantly under San Francisco minimum wage ($12.25/hr), I doubt that your hotel tax can keep the libraries open more than a minute or two later.However, had you donated that $8 million you spent fighting Proposition F directly to the public libraries you love so much, that could have made a bigger difference. Oh well. Hindsight is 20/20!

People also took Airbnb to task over Twitter, with one person attacking it for spending $8 million to lobby against a legislative proposal in San Francisco that seeks to restrict short-term rentals in private homes.

With the firestorm threatening to spread, Airbnb on Thursday apologized for the ads and said it is withdrawing them.

"The intent was to show the hotel tax contribution from our hosts and guests, which is roughly $1 million per month," said Christopher Nulty, a spokesman for the company, in an email. "It was the wrong tone, and we apologize to anyone who was offended. These ads are being taken down immediately."

Airbnb and other "sharing economy" economies, such as Uber, have drawn fire from critics who accuse the companies of not paying their fair share in taxes. Airbnb says it collects and remits taxes in more than a dozen cities, states and counties around the U.S., as well as in Paris and Amsterdam.

Airbnb's move to pull the plug on its marketing campaign may end the furor over the ads, but it is unlikely to end the controversy over major Internet companies' civic and financial relationship to the communities where they are based and offer service. The wealth of technology firms, along with the soaring cost of living and other signs of rising inequality, has occasionally been a point of friction for local residents in Silicon Valley.

"My intention with my Facebook post wasn't to have the ads taken down, but to draw attention to the problems both with the tone and economic logic of the Airbnb ad about libraries," Kenney said by email. "In other words, it's not the signs themselves, but the ethos that we should be grateful for their tax contributions that is galling."

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    Alain Sherter covers business and economic affairs for