Case – Trip Advisor
TA(Trip Advisor) is a travel website helping customers to get advice on hotels, restaurants, tourist destinations, etc. During this year, TA has encountered several challenges both in its business expansion and its established domains. TA monetizes its User Generated Content so need to encourage customers to write reviews. Furthermore, TA encounters challenges from competition in restaurant market and its expansion strategy in flight, vacation rental services and international market. Through discussions with data support, we recommend TA to simplify its censor process and optimize its app to beat Yelp; it is very hard for TA to replicate its success in Vacation Rental, flights and China. TA needs to create quality requirements on vacation rental, try to focus on SEM in flight search market, and pull out of Chinese market.
TA is the largest travel site in the world and monetizes UGC (User Generated Content) in different ways from other UGC sites such as Yelp or YouTube.
Yelp gets their revenue mainly from local ads, brand ads and some additional revenue from deals, reservations and bookings 1. YouTube generates their revenue from ads and giving away revenue to uploaders 2. TripAdvisor generates revenue from Click-based advertising (77%), Display advertising (13%), Subscription revenue (10%) 3.
Chart 1- reasons for customers to write reviews 4
Yelp:http://seekingalpha.com/article/1155551-yelp-earnings-will-highlight-revenue-growth-and-expansion-plans YouTube: http://support.google.com/youtube/bin/answer.py?hl=en&answer=2467968 3 TripAdvisor: http://news.investors.com/technology/072412-619352-tripadvisor-second-quarter-sales-missestimates.htm?p=full 4http://community.demandforced3.com/t5/The-Demandforce-Blog/Here-s-Looking-Out-for-You-Kid-The-Unselfish-ReasonsWhy-People/ba-p/3180 2
The reasons for customers to write reviews (see chart 1) can be categorized as Intrinsic Motivation, Herding Behavior and Coherent Arbitrariness. Intrinsic Motivation means doing of an activity for its inherent satisfactions rather than for some separable consequence 5. Herding Behavior reflects the tendency for individuals to mimic the actions of a larger group 6. Coherent Arbitrariness figures out that Absolute valuation can be manipulated, but at least subjects do not change their preferences once established 7. To illustrate this, TripAdvisor’s users want to help other to make a good decision users want to give reviews back or some of them enjoy writing it after they got a good/bad service from each services (Intrinsic Motivation), some users some of them write as others did (Herding Behavior) and after they somehow did write it once they continue write it again (Coherent Arbitrariness). Moreover, some of them might be paid to do so to gain discount or benefits from services such as free one drink or discount price after wrote a review.
The corn business of TA is hotels but not restaurants even though it has over half a million users’ reviews on restaurants. The main reason is its competitor Yelp . Yelp has more than 7.52 million 8 restaurant reviews, which is far more than 2 million 9 reviews on TA in 2013, thus Yelp offers more broader and valuable views. Besides, the number of restaurants in Yelp is also over the one in TA. The reasons are that TA has a trivial censorship on reviews and adding a restaurant, while counterpart of Yelp is much simpler 10. People can add a new restaurant and write a reviews or add photos with little censor process. However, adding a new restaurant on TA is a very tough process—it requires a lot of trivial information about the restaurant and it is common to wait a long time but still get a reject because of “no specific information offered”. Another edge of Yelp over TA is its user-friendly and convenient interface on mobile device and social network. For example, Yelp recommends restaurants based on map so customers can easily find all restaurants around their...
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