Orbitz Uses Demographic Segmentation to Make More Money per Visit from Apple Users

Segmentation Works – Orbitz Knows Wuzzup!

Demographic Segmentation – Genius

The Wall Street Journal has a great article showing how Orbitz is using demographic segmentation to steer Apple Mac users to high priced hotels.

Orbitz is currently testing a feature that shows higher priced hotels in search results to Apple Mac users more than to PC users. The reason they do this, is that they noticed in their analytics that the average Apple user spends between $20 and $30 more than a PC user for hotels.

Orbtiz is putting into practice powerful segmentation based on data they have mined over time.

There are many ways to segment your site visitors:

Segmentation allows you to try different copy/designs/techniques to different crowds of people that may share similar responses. That’s all Orbitz is doing: measuring, analyzing, segmenting and testing. They just identified an interesting segment, with the assumptions that since the data shows Apple Mac users spends more per night on hotels, they should try showing more pricier options to those people.

That assumption may not be correct. That’s why they’ll have to test it in and see if it works. It may not. Their assumption may be wrong, but that’s why savvy marketers test, test, test.

Interesting tidbits from the WSJ Ortbitz Article

  • Mac computers spend as much as 30% more a night on hotels
  • Mac users are 40% more likely to book a four- or five-star hotel
  • When Mac and PC users book the same hotel, Mac users tend to stay in more expensive rooms
  • Orbitz lost $37 million in 2011
  • Its stock has fallen by more than 74% since its 2007 IPO
  • Orbitz’s chief executive, Barney Harford, has made data mining a priority
  • Orbitz said the effort to incorporate Mac vs. PC distinctions is still in its formative stages
  • The average household income for adult owners of Mac computers is $98,560, compared with $74,452 for a PC owner

This is great to see a large company doing this type of testing. It’s also great that the CEO has made data mining a priority. One concern is that since Orbtiz may be considered more of a “travel search” site, people may get upset at the fact the results are being prioritized to Orbitz’s apparent benefit, and not towards the user’s benefit. We’ll see how this shakes out.

What are your thoughts on this? Cool or creepy?


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