Everyone knows that travel sites carry out price
discrimination based on users' search habits, locations, and booking times.
Pretty soon, they'll be shown prices based on whether they're PC or Mac users. Orbitz confirmed that it's experimenting with such price discrimination by
prioritizing costlier options for people searching on its sites from Apple
computers relative to those on PCs. I would argue that distinguishing users by
their operating systems will be one of the most effective albeit blatant
segmentation strategies for digital marketers. Orbitz's findings reveal that
Mac users are likely spend $20 to $30 more per night for hotel stays, which is
pretty sizable.
As long as it allows users on Apple computers to somehow access the same low prices, optimizing search results based on data mining seems legit (and definitely savvy).
As long as it allows users on Apple computers to somehow access the same low prices, optimizing search results based on data mining seems legit (and definitely savvy).
Orbitz's premise that Mac users are willing to spend more on
travel is consistent with the conventional wisdom spanning from pop culture to the
strategy meetings of marketing executives. Apple consumers certainly have
greater disposable income than average consumers and arguably strive for
trendiness. According to Forrester Research, the average household income for
adult owners of Mac computers is $98,560, compared with $74,452 for a PC owner.
It's not such a stretch to assume that those
in the former group are more likely to opt for staying at four to five star
hotels and flying in Economy Plus.
1 comment:
On Orbitz, Mac Users Steered to Pricier Hotels
Today's Wall Street Journal article outlining how Orbitz cuts its search data to skew higher hotel options toward people searching on a Mac vs. those potential customers searching on a PC perfectly illustrates the dilemna that "big data" and data mining are ushering into our digital experience. Orbiz found that Mac owners spent 30% more on purchases, so any marketer would indeed target this demographic to receive different offers than PC users. However, when the Wall Street Journal story came out, consumers were outraged and Orbitz has since had to retract and try to correct its mistkae with a USA Today article--a much more mainstream, "middle class" paper than the Wall Street Journal--where it claims it is "personalizing" the results for each viewer but that consumers see the same search results. Similarly to what we read in The Search book on how Google has multiple (hidden) criteria to determine its search and browsing activity, Orbitz says that a computer's operating system is only one of several factors considered when serving up search results. Like Google, the top three search results on Orbitz are reserved for high-profile PAID placement--in essence, showing how Orbitz can take a vertical niche and recreate Google's search business to make a profit. Other facts include deals, referring site, return visits, and location. Check it out for yourself and type in a search query on a Mac and PC and let's see how long Orbitz keeps them different...er, personalized.
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