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November 15, 2008

Microsoft claims Live Search cashback success

Posted by David Hunter at 12:18 PM ET.

Last week Microsoft issued a press release touting the success of its Live Search cashback incentive shopping program which was announced in May. Besides the 30 percent increase in the number of product offers available plus new big name retailers participating, there was testimony from reference customers like eBay and ShoeMall about how it had improved their ROI in paid search.

The way this works is that the retailers pay Microsoft a commission for Live Search cashback sales and Microsoft in turn gives cash back to the buyer as an incentive. The incentive would be less than the commission at a normal incentive shopping site, but no one knows what Microsoft is paying. The point is that at least the reference retailers are happy with the return on their commission payments. Since this is effectively CPA advertising as opposed to CPC, it’s hard to see why they wouldn’t be unless hooking into the Live Search cashback infrastructure required a bunch of IT rework.

In any case, if Microsoft wants a incentive shopping site, they have certainly got a big one, but the real game always seemed to be to boost the usage of Live Search and there the results are less clear. To that end, Microsoft touted a comScore study that “in the second quarter of 2008, Microsoft Live Search referred almost 12 percent of total U.S. commercial online transactions and about 13 percent of total U.S. online spending among key retail categories” which still raises some questions.

As Danny Sullivan observes, it is hard to tell what this means without knowing what the percentages were before Live Search cashback, but the reported numbers are only slightly higher than the 10% US search share that comScore regularly gives Microsoft. Not to worry – Microsoft tells Sullivan that the “the immediate goal is to build usage and loyalty.” Somehow we knew that, but it isn’t clear that that is the story the numbers tell. Judgment on that will have to be deferred, but I think it is fair to say that Live Search cashback itself is off to a robust start.

Filed under Advertising, General Business, Live Search, Live Search cashback, Marketing, Microsoft, Windows Live

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