Orbitz Controversy: Tip Of
Big Data Iceberg
Websites know which PC,
phone, and browser you use. But ad networks and social sites today give
marketers more information about you than ever before to better target
advertising.
By Doug Henschen InformationWeek
June 26, 2012 03:08 PM
When The Wall Street
Journal reported on Tuesday that Orbitz shows Mac users costlier travel options
than those shown to Windows PC users, it caused a stir, spawning hundreds of
follow-on stories, including a video segment on ABC's "Good Morning
America."
Marketers usually claim
that knowledge of the consumer helps them deliver more relevant and timely
offers, but the disturbing factor in this case was that insight into Mac
users--like the fact that their household incomes are $20,000 higher, on
average, than those of Windows users--was used to steer them toward more
expensive travel packages. Some would call that discrimination, but it hardly
scratches the surface of the information that marketers can use to target
advertising.
The basic information that
marketers know about you as a site visitor includes your browser type,
operating system, screen size, and monitor resolution. So they can spot a Mac
user right away, and research shows that iPad and iPhone users are 17% more
likely to purchase than users of other mobile devices.
Marketers also know what
country, region, state, and city you live in, what site referred you, whether
you used a search term, and whether you clicked on a promoted link on a search
engine or another site.
If you've visited a
particular commerce or publisher's site before, chances are you've been
cookied. The cookie, of course, lets marketers know if you're a return visitor,
what you looked at during your last visit, and your level of engagement, as
indicated by the time spent on the site. They also know how long it has been
since your last visit, how frequently you visit, and how deeply and frequently
you've gone into a "conversion" funnel--whether you've actively
shopped, subscribed, or whatever the conversion goal might be.
If you're a registered
user of a site and you've made a purchase, you've likely shared your name and
address. At that point there's a wealth of demographic and lifestyle data
marketers can append from third-party marketing databases. Marketers then
correlate all that with purchase history to establish and batch you into a
finely targeted customer segment.
The basics of segmentation
are recency, frequency, and monetary value of purchases. Frequent buyers who
spend more than average are best customers. Infrequent buyers who are high
spenders get coupons, emails, and other inducements to come back and shop
again. Frequent buyers who spend less than average are sent upsell and
cross-sell offers. Infrequent buyers who spend little get less attention.
You don't have to be a
registered user of a site to encounter creepy experiences. Scores of ad
networks use cookies to track your online behavior across hundreds or even
thousands of sites. Once you exhibit behavior on any one of those
network-member sites--say, shopping for a car, a flight, a new PC, or a
smartphone--marketers can serve up related offers on any other network site.
Yahoo's Interclick unit,
for example, relies on massive parallel processing of millions of clickstreams
each day to spot suitable targets for advertising offers. The more recent and
frequent the behavior and the higher the value of the transaction, the more
likely you are to see a related advertisement. So if you shopped on a car site
yesterday, don't be surprised to see car ads on sports sites, news portals, or
other seemingly unrelated sites today.
Facebook is, of course, at
the center of consumer privacy debate because it can serve up unprecedented
amounts of information, including age, gender, consumer preferences, likes,
friends, and behavioral and psychographic information by way of an API.
Marketers are actively tapping Facebook and other social networks by inviting
you to use social network-enabled mobile applications, encouraging you to log
into their site using your Facebook credentials, or otherwise asking permission
to access your profile.
Groups like the Direct
Marketing Association are quick to point out that marketers use information to
deliver more timely and relevant offers that benefit consumers. Should we be
surprised when information is used to show consumers premium goods or luxury
hotels?
Of course, not everybody
is looking for a bargain. After all, those Mac, iPad, and iPhone buyers could
have purchased "equivalent" products for as little as one-third the
price of their Apple products.
As for Orbitz, you might
not be able to delete cookies from your browser to sidestep being identified as
a Mac user, but you can click the "sort by price" button if you are
price-sensitive.
At the Big Data Analytics
interactive InformationWeek Virtual Event, experts and solution providers will
offer detailed insight into how to put big data to use in ad hoc analyses,
what-if scenario planning, customer sentiment analysis, and the building of
highly accurate data models to drive better predictions about fraud, risk, and
customer behavior. It happens June 28.
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