WeWork plans to ramp up marketing spend as it goes public
Consumers can expect to see a lot more WeWork ads in the future. The 9-year-old real estate brand, which rents out co-working spaces, filed paperwork Wednesday for its initial public offering. In the filing, filled out by parent company the We Company, WeWork wrote that it expects to lay into more “traditional” marketing as it strives to move beyond the word-of-mouth referrals that have built up its reputation in recent years. In the past, such referrals from existing members have kept marketing costs low, the New York-based brand disclosed.
“To the extent that we are unable to maintain a positive brand reputation organically, we may need to rely more heavily on traditional marketing efforts to attract new members, which would increase our sales and marketing expenses in both absolute terms and as a percentage of our revenue,” reads the 130-page filing, which references marketing 113 times.
For the six months that ended June 30, WeWork’s $320 million investment in sales and marketing represented 21 percent of the brand’s revenue, up from 18 percent in the year-earlier period when the company spent just $139.9 million on such expenses. For the first six months of this year, WeWork generated $1.5 billion in revenue, more than double that of the same period in 2018.
Despite the huge uptick in revenue, the company also disclosed a hefty loss of $1.9 billion last year—a similar experience had by other high-profile tech brands that have recently gone public despite a lack of profitability.
A WeWork spokeswoman declined to comment on the brand’s work with outside agencies or if the company’s growing in-house studio will continue to handle new marketing moving forward. Earlier this year, WeWork debuted a campaign called the Global Impact Report, which showcased the brand’s impact on communities around the globe. The work was created by its internal creative team, Creative Studio.
In 2018, WeWork acquired Conductor, a 13-year-old marketing software company, for $113.6 million in order to strengthen its internal marketing prowess for its members.
The company has also been ramping up its Creator Awards program--a Shark Tank-like pitch contest for startups in collaboration with Ashton Kutcher.