Microsoft to Introduce a Cash Back / CPA Alternative to Pay Per Click
Michael Arrington over at one of my daily read’s TechCrunch announced about an hour ago that Microsoft is set to step-up big in its quest to unseat Google AdWords as THE go to performanced-based paid search platform.
According to Arrington’s insider information Microsoft is going to introduce a service that will give users cash back on any purchases made from advertisers.
Unlike the typical cost-per-click (CPC) model pioneered by GoTo.com and later revised and blackboxed by Google, which requires advertisers to bore the risk of return-on-investment, Microsoft’s supposed “CPA” model will be based on pay for performance. Similarly, unlike the typical CPC model that does nothing to incentivize users, Microsoft’s “cash-back” approach just may be an answer to take away some of Google’s market share.
I dare say it but it sounds like Micrsoft may be planting the seeds for the launch of a next major affiliate marketing network.
However, it’s my hope that instead of launching their own network they work with key strategic affiliate network partners like Pepperjam Network and others to help deliver “advertiser” inventory to users.
BTW - JellyFish.com launched right around the same time as Shogging.com (a Pepperjam property). JellyFish (was? the site is down for repairs) is a shopping comparison cash back Web site that partners with major affiliate networks like CJ, Linkshare, and Pepperjam Network - they offer users cash back to shop through the site. It is likely that they were acquired by Microsoft for this exact initiative, which to me is a potentially brilliant way to do something different than the 11,000 pound elephant….if you can’t beat them with technology, develop a new innovative model and incentivize users to use your service.
We all know Microsoft (and Yahoo, once they are acquired by MSFT in a few days) has the reach to compete with Google. The real question is does this new model have what it takes to eventually win at least a fraction of Google’s loyal user base.
My thought is that this may (if done correctly) be the straw that breaks the camel’s back.
affiliate marketing google Jellyfish microsoft pepperjam Pepperjam Network TechCrunch Uncategorizedaffiliate marketing google Jellyfish microsoft pepperjam Pepperjam Network TechCrunch Uncategorized
May 21st, 2008 at 4:10 am
Google already has CPA and many more advertisers than MS + Yahoo on adwords. Not to forget they have checkout too. google could simply innovate something similar using already available platforms like checkout+adwords+google products and attract much more traffic and revenues than MSN possibly can with cashback.
May 22nd, 2008 at 2:05 pm
Pranav,
Thanks for your comments.
I don’t disagree with you.
However, I think the key here (if Microsoft does it correctly) is that Microsoft will integrate cashback into search.
That’s a key distinction verus just having a cashback property.
With Google’s CPA offering through AdSense the only party incentivized is the advertiser, not the user. The user doesn’t receive any benefit. Also, Google’s program runs through AdSense (akak, the content network) and not through search.
If Microsoft wants to hit this concept out of the park they should integrate the concept into Microsoft LIVE search, which will incentivize advrtisers (through a CPA alternative to CPC) and users (cashback).
While Google clearly has the scale advantage here, I think Microsoft’s concept is very, very powerful.
Your thoughts?
Kris
May 23rd, 2008 at 6:53 pm
Kris,
Great thoughts, however I believe Pranav might be on to something. Imagine if Google actually ran their offers through search or content network and offered a discount for using Google Checkout … they have the advertisers, the users (searchers) and Google Checkout can be the incentive to stay on the Google Band Wagon!
Darin
P.S. Like any idea, implementation is the key and you are correct Kris, if done correctly it could be the straw that broke the camel’s back!
May 26th, 2008 at 6:26 pm
Darin,
Thanks for your comments.
Yeah - I mean Google has incredible scale. However, they aren’t about to change what works where Microsoft has no choice since they are failing to attract market share from Google.
Honestly, I’m not a huge fan of MSN AdCenter - in fact, I think (as an advertiser) that AdCenter is a huge disappointment. Over hyped and underdelivered.
I bet that if MSFT is able to integrate the cashback concept into search that they do start to reverse Google’s dominance.
Will it happen overnight? no.
Will it even happen? probably no, but at least I’ll go on record as saying that this model, if executed correctly, might be something very powerful.
Kris
June 3rd, 2008 at 3:40 pm
I suspect this move is an act of desperation by Microsoft (see http://www.siliconstrat.com/blog/2008/05/27/microsoft-cashback-search/) The system is fragile and violates the basic set of needs of users looking for products via search. Without adding value for users, Microsoft is missing the core of the market.
It is basically a reverse variation of iWon, and we all know what a winner that wasn’t.