Microsoft rolled out their Cash Back program this week and the media is all abuzz about it. You can read plenty of detail and opinions about it here, here, and here (as well as any number of business publications).
It’s a two sided move by Microsoft. For the buyer, Microsoft is offering cash rebates on purchases made through the Live Search Cashback engine. The buyer chooses products from a large group of sellers, buys something and then receives a rebate is his/her account. Accounts can be setup direct deposit, PayPal or the buyer can have a check mailed. For the seller, Microsoft has shifted the paid advertising model around to a “Pay Per Action” instead of “Pay Per Click”. The sellers who serve up ads in the Live Search Cashback system only pay when someone buys something! Oh yeah.
Ah, but before you get too excited about that last part, not just any seller can join that program. You have to be a Best Buy, Barnes & Noble, OfficeMax and the like. It’s not for the small micro-niche seller that a home-based business might be. In fact there was no mention of the program in my AdCenter account and when I asked about it, I was told it was for a ‘limited group of high volume sellers’. Oh well.
The big picture here is that Microsoft is trying to get back into the search market and trying to increase their dismal market share in that market. That dismal market share (just barely 9% according to ComScore) is main the reason why I stopped using my AdCenter account. It just wasn’t worth the effort to manage the ad campaigns for the trickle of traffic they brought it.
That market share problem may change soon if this strategy is successful. A lot of people are writing this off as a desperate move on Microsoft’s part and I would agree in part. But I think it’s also a potentially winning move. Any time you throw cash rewards at buyers and create buzz like Microsoft is doing, you’re bound to be successful. How successful remains the question. Will it bring enough people over to Live Search to make a difference in the long run? Will enough people leave Google to put a dent in Google’s dominance?
That remains to be seen, but in the meantime, I’ve got some shopping to do!