Sign up for our daily recaps of the ever-changing search marketing landscape.
Bing Cashback: Don’t Leave Your Piggybank On The Table
As early as Fall 2008, Microsoft set off on a crusade to openly evangelize what would become “Bing Cashback” with strategic agency partners and retail advertisers alike. The consumer rewards program was built to incent online shoppers with the purpose of influencing search behavior to gain repeat visitors and generate loyalty. Microsoft’s goal would ultimately be to drive increased search revenue and market share.
As an extension to adCenter search and Shopping listings, Bing Cashback held far-reaching promises of increased scale and brand enhancement for advertisers. It provided a unique lever of control for search marketers unlike any other demand generation vehicle, allowing advertisers to be more competitive in the Bing search landscape. And it complimented search well.
Unbeknownst to Bing advertisers, the Cashback program faced challenges at Microsoft. Notably, the Cashback business model was not profitable. According to sources at Microsoft, an advertiser would have had to spend up to four-fold of its pre-Cashback spend for Microsoft to simply retain its search revenue. While there may have been some exceptions during seasonal times, most advertisers fell far from the profitability mark.
Then factor in the huge business development funds pumped into the program in 2009 as well as hundreds of temporary support staff and it quickly becomes apparent just how costly Cashback proved to be. To justify these costs, the increased query share would need to be significant—and it wasn’t.
The program’s adoption also proved to be slow—particularly among larger advertisers—mostly due to its technical complexity. It was easier for smaller advertisers with setting up pixel-based reporting, yet the prospect of potentially limited gain in scale did not readily compel action. Nevertheless, the Cashback Specialist Sales team succeeded in acquiring thousands of advertisers. During this process, they strengthened Microsoft’s relationship with agencies and advertisers as they worked to guide all advertisers through the often arduous on-boarding process. They deserve to be recognized for their efforts.
More importantly, as Microsoft found in its program analysis, Bing Cashback did not play out to its expectations. Bing’s query share may have increased, but could not be directly attributed to Cashback. According to sources at Microsoft, Cashback had been effective at drawing a comparison shopping audience, however, not the loyal general-searcher base that it sought. Furthermore, rejection of the program by Yahoo in the upcoming Microsoft/Yahoo Search Alliance was also a blow. Either way, the program was deemed ineffective.
On June 4th, 2010, all Bing Cashback advertisers and customers were simultaneously informed that the program would be discontinued after July 30th. Unlike usual Microsoft practices, little information was provided. From an advertiser perspective, the announcement came as a shock, particularly for those businesses that invested extensive time and resources into the program. Why would Microsoft pull the plug on this so suddenly? Imagine if your business had just signed up for the program. For agencies, the abandonment strains hard-earned trust and will cast doubt on participating in future Microsoft “beta” programs. From a customer perspective, the initial announcement appeared overly negative and may arguably have kept customers from continuing to use Cashback until its end. Some retailers may have even seen decreased Bing revenue relative to their rebate incentives.
With two weeks remaining until Bing Cashback’s end, actively participating advertisers must know that any unspent funds in their reward pool will stay in Microsoft’s coffers. That doesn’t have to happen. Now is the time to use your reward pool savings to get as much out of the program as possible! By now, most Cashback advertisers should have a good idea of their rates of reward accrual and depletion by testing varying rates of Cashback rebate elasticity.
The key to depleting your piggybank quickly is simple—limit your accrual (the 75% of spend contributed to your reward pool) and maximize your depletion (depending upon rebate rate). Contrary to earlier practice of using Cashback to increase new customer acquisition off generic keyword-targeted campaigns, you will now need to remove your least efficient, highest spending campaigns from Cashback (revert to standard search) to reduce your accrual.
Next, determine an appropriately higher Cashback reward rate and apply this to your most efficient campaigns (i.e. branded). If you are unwilling to remove generic campaigns from Cashback (or looking to deplete your reward pool for Bing Cashback for Shopping), the alternative is to naturally increase your Cashback reward to a rate high enough to ensure account-wide depletion. The net outcome of these actions will allow advertisers to transition into August and leave as much of the reward pool paid out to loyal customers instead of Microsoft.
In retrospect, for the short time that we used Bing Cashback, it was an exciting and worth-while opportunity for early adopting advertisers and agencies alike. Given the arguably fewer innovative advertising products (i.e. Yahoo feed-based Submit programs, including Yahoo Search Submit Pro) at search marketer’s disposal, Microsoft’s abandonment of Cashback’s is certainly a disappointment. Nevertheless, hope remains that new tools and innovative features will emerge, especially as competition mounts between Google and a combined Microsoft and Yahoo search program. We may not have Bing Cashback, but perhaps Microsoft could grace its partners with the opportunity of something better?
Some opinions expressed in this article may be those of a guest author and not necessarily Search Engine Land. Staff authors are listed here.