Microsoft Live Search to Launch Microsoft Live Search Cash Back

[Kevin Heisler]

Microsoft Live Search plans to announce a cashback program for consumers who buy products after searching online with Live.

Do you think that will increase Microsoft's share of searches?

[moneyback]

I hope it's a great success. Mind you, if you picture the scene here, I have just spent 8 months making a cashback search engine itself. It was launched today so I beat them too it, but I really thought I was the first!

It will be interesting to see how the model takes off - I believe it offers true value to advertisers - CPA in my book is far better value than anything before, so from a personal point of view I hope it captures the market in a positive way. The power of Microsoft will let me know the viability of it all, but in a nutshell consumers are not stupid anymore. They know people make money off them when buyiong online, so why not share the marketing profits with them?

Mind you, I bet they dont have CPA for advertisers yet and this little guy in his home office has managed that

[AussieWebmaster]

I think Microsoft should start offering an agency commission for agencies managing search.... would make them more attractive and pull some of Google and Yahoo's spend

[B-Double-U]

I am pretty sure this is one reason that I pull advertising.

I remember a post here a while back about mypoints.com
here is an excerpt from their site:

* Earn Points for doing what you already do online; shopping, reading emails, playing games, searching the web, taking surveys, and more!
* The more you do, the more Points you'll earn.

Any incentivized search (in my book) is junk traffic. This is the same reason a doctor can't own a pharmacy, if she did, she would write prescriptions all day long and even write them for the most expensive drug. I feel sorry for anyone in the highly competitive industries like mortgage or where costs are extreme like helicopter ambulances.They are going to catch the most immediate effect of this and take the brunt of it as well.

For the little amount of traffic they do provide, they need to be very careful of how they tread, because people can just as easily drop them and divert that spending elsewhere.

But then again, you don't get a nickname like "Micro$oft" by not pulling these kinds of stunts. I am pretty sure that they think everyone outside their company is incapable of seeing through their sales-driven mentality. I think if they could learn one thing, that it should be "provide a valuable service" and it will grow. What do I know though...I just have opinions...

Here is an excerpt from their launch letter:

Advertiser program: Live Search cashback
The way searchers shop online is about to
change! Our new Live Search cashback
program combines the power of Live Search
with the versatility of a comparison-
shopping engine to bring consumers some of the best deals on the Web. Searchers will be rewarded with a rebate when they purchase products through Live Search cashback. If you are a retailer or online merchant and want to learn more about how to qualify to participate, please visit our Microsoft Advertising website.

I guess their one saving grace is that they attempt to make them purchase and not just search, but with cookie stuffing, it will be havoc in a matter of days as affiliates rewrite the cookies to get credit.

[moneyback]

I disagree.

Marketing is one of the games we play that fully depends on results. By integrating CPA you are only paying on results. The onus then is on the website or business owners to make their business viable.

For example, if I gave you $100 for free, would you give me $50 back if you met me in the street? Of course you would.

Offering pay per sale is a sure fire hit for the savvy website owner to guarantee profit. I could easily (and will be doing) an amazon specific product page so you type in the product you want, see the best price and buy it......just like normal.

Except I will offer 2% cashback on your purchase - so you save 2% on what you buy. A small amount yes, but amazon only offer a small commission rate so this can vary from product to product.

Who wins?

Amazon do as they make the sale, you do as I give you cashback (or a discount if you look at it that way), and I do, as I get commission. You get the same product, same distributer, through the same channels as normal, except you save a bit of money.

As you so rightly point out, the real problem (like sites such as mypoints etc), comes from people offering cashback on free offers etc. These people will signup to get the cashback and then go away never to be seen again.

What these sites do is prey on companies that have an inadequate web team. For example, some gambling sites I can say to you:

"Deposit $50, get $50 bonus and have $100 to play with". Lose this money and I will give you $75 cashback - so you profit anyway.

The marketers of these companies have been so suckered into inflated CPC prices that they inflate their marketing. Often they are run by inexperienced marketers who have no clue as to how things can be manipulated. They are of the thinking that "a paying player will deposit more". Not necessarily the case, although gambling is an exception as many do try to be greedy.

Greed is the major driving force behind these stupid models - if marketing departments actually had a thought or two, they could make the CPA model totally viable.

Certainly much better than PPC.

So what do YOU think?

Finance companies etc should not be mollycoddled.......I look at my mortgage of $4000 a month and realize less than 5% is repayment - the other $3500 is interest. So who is ripping who off?

It's a game. Marketing is a game. We all like to make money but for viable companies who are savvy, CPA and cashback is certainly a way to go.

[B-Double-U]

I think maybe I wasn't as clear as I meant to be.

I don't think that it *isn't* a viable option, just that it will quickly cease to be a sustainable and effective advertising platform for our industry. I have already used this type of incentivized program in other areas and it quickly gets over run.

Look at it this way.
you have 3 people,

Person "A" (stay at home mom who wants to get $5 back on a baby bottle)

Person "B" (seedy, yet savvy, affiliate partner)

Person "C" (the business selling the product)

Person "B" designs his website baby-coupons-for-baby-bottles-4-U.net, and on this site, he has an activeX control the rewrites your cookie or offers a downloadable *coupon toolbar* "A proprietary technology that is built directly into the users browser" <- one of my more favorite phrases

Person "B" has already joined my affiliate program, so he is getting a kickback by sending traffic to me, using his code.

Person "B" receives promotional offers from me to incentivize his traffic and gain conversions.

Person "B" also joins MSN as an affiliate to redistribute their CPA offers and provide traffic.

On Person "B"'s website, he offers you a coupon for $5 off your purchase, then states that you can combine it with this cash back offer. He resets your cookie, his cookie and drives person "A" to the site with stars in their eyes of getting the baby bottle for free.

Person "C" can't really build something that stops them from doing this, so he gets hit and loses money on the sales.

The affiliate looks like a winner, because their numbers are up. Mom is happy because she just received a $10 bottle, got free shipping, $5 off and is getting a $5 kickback from this program.
The advertising program gets hit with a month end marketing report that looks good on the surface, but it takes another month to really figure out what is happening. Next quarter they drop the program.

So, like I said, viable, but typically not sustainable. btw, the above scenario is one of 20 different models currently out there... so OPS, please feel free to pull this if you think I am giving people ideas, as I really hate the fact that things like this flourish.

Also, does anyone know that if they run both a CPA campaign and a PPC campaign, will the advertiser be charged for both? I will get more info, but my bet is currently, they could set the cookie to not expire, giving them a long window of opportunity to collect.

I'm such an optimist aren't I

[KSew]

B-Double-U, I don’t agree on some points you said.

Business owners are paying on CPA and NOT CPC. If I am an affiliate of a program I can promote the products in three ways:

1. Send traffic directly to the merchant’s website.
2. Make a site, get traffic to the site, review the product and then send the visitors to merchant’s site.
3. Sell your merchants products directly from your site.

Let’s take it case by case.

Case 1: Not Possible. In this program merchants will have to pay cash back to MSN and to affiliates too. So I feel merchants will change their terms to make sure affiliates DO NOT link directly to their website in Cash Back schemes.

Case 2: Not Possible. If you send traffic to some other site it gets extremely difficult for MSN to track the sales. So no cash back for the visitors and thus affiliates won’t promote their site through this program either.

Case 3: Little Possibility But NOT Profitable for the Affiliates. Profitable for the Merchants though. Need less to say – the affiliates will have to pay cash back from their affiliate commission – this will not work on their ROI. Of course those who can may do it if they can part with their commission. And since this is CPA they have nothing to lose.

I think its clear, for affiliates this is a big NO NO. For merchants it’s MOST WELCOME.

Still these are all predictions and only time will say if this works well for MSN.

[Mel66]

Interesting discussion.

I will say that CPA programs can be gamed, as B-Double-U described; and also in less tricky ways: by filling out bogus lead forms (for those paying per lead) and by placing orders that are later canceled (for those paying per sale). It's better than CPC in this incentivized situation, but is still ripe for cheats.

[Discovery]

Mel has it spot on.

CPA will always be gamed.
This model is NOT new, it has been attempted by numerous SE companies since 1999. Each with a different twist I'm sure but still virtually the same.

To me it says hey our algo and search results are so bad that we have to pay you to come and search at Live.com in order to generate traffic to support Adcenter.

Now this is not an entirely bad idea, mind you that MacDonalds sells a terrible burger and at $1 they are actually paying you to eat it. The value menu has been a loss leader for years yet does a great job in bringing in enough traffic to support upselling more profitable "meals".

Perhaps Microsoft can buy a enough friends here to gain the critical mass they need to finally get Adcenter off the ground.

Discovery