On May 21, Microsoft announced the launch of Live Search Cashback, which is their attempt to regain a share of the search advertising market from Google. The service offers cash rebates to consumers who search for and purchase products through Live Search. The reviews have been all over the place thus far, so let's hunker down and find out for ourselves what this new program is all about.
At the official launch event, Microsoft Chairman Bill Gates announced the goals of this project as well as some of its key partners. "We believe search can offer much more value to consumers and advertisers than it does today, and we see Live Search cashback as an important opportunity to deliver additional value," he said. As of right now, the program offers over 10 million products from over 700 merchants, including 14 of the top 40 U.S. retailers, such eBay and BarnesandNoble.com. By making commercial search their top priority in their overall search vision, they are capitalizing on the fact that more and more shopping is done online, with 68 percent of all online retail transactions starting at a search engine, according to EMarketer.
This also gives advertisers the opportunity to lean more heavily toward the cost-per-action (CPA) model of search advertising, which requires advertisers to pay only when a customer actually makes a transaction. Cost-per-action offers advertisers a more reliable way to analyze their investment than cost-per-click (CPC), which requires payment whenever a searcher clicks on an ad. So now, whenever a customer buys a product through Live Search, Microsoft takes the revenue collected from the CPA fee and gives it back to the customer. Obviously, Microsoft hopes this will draw even more consumers and, consequently, more advertisers, thus sticking it to Google.
By now, many of you are probably wondering what Microsoft is getting out of this. Well, not much, but we'll get into that more later in the article. Right now, let's get into some of the specifics and actually take the program on a test run. Follow me to the next section.
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