Last week, in a memo to employees, Microsoft President Kevin Johnson outlined plans for Microsoft’s continued push into the online services business:
We have been executing against the core strategy I first presented at our Financial Analyst Meeting in July 2007 to go after the growing opportunity in online services and advertising. Four pillars have formed the basis of our strategy:
1. Consolidate ad platform and win in display
2. Innovate and disrupt in search
3. Deliver end-to-end user experiences across PC, phone, and web
4. Reinvent portal and social media experiences
And indeed, what Microsoft is trying to do is to “disrupt in search”, most clearly evidenced by the announcement of Live Search cashback. Here’s Satya Nadella with a demo, from Advance08:
I had a chance to talk so some of the early partners of the cashback program, and a couple of things became clear. One, although they’re using Google adwords extensively, they’re open to other solutions. Managing keywords for adsense accounts is a difficult, time consuming, and tricky business, and users of keywords spend millions of dollars making sure they’re using the right keywords, that they’re not overspending, and that they’re getting results. And Live Search cashback doesn’t cost them anything to use, at first. They don’t have to make choices between Adsense and cashback, because they only pay for cashback after they make a sale.
So the early partners, at least, were pretty positive. There’s really not much downside to them using it, and if it does drive business there are additional benefits. By connecting cashback to a Windows Live account, all of the attached demographic information is available. This goes along with Microsoft’s new Engagement Mapping initiative, which Brian McAndrews also unveiled at Advance08:
“The ‘last ad clicked’ is an outdated and flawed approach because it essentially ignores all prior interactions the consumer has with a marketer’s message,” said Brian McAndrews, senior vice president of the Advertiser & Publisher Solutions (APS) Division at Microsoft. “Our Engagement Mapping approach conveys how each ad exposure — whether display, rich media or search, seen multiple times on multiple sites and across many channels — influenced an eventual purchase. We believe it represents a quantum leap for advertisers and publishers who are seeking to maximize their online spends.”
So by a combination of Live Search cashback and Engagement Mapping, partners could potentially see not only click-through traffic, but meaningful numbers behind the clicks. All without the hassle of dealing with keyword placement, although none of the partners I talked to saw Live Search cashback as a replacement for Adwords, at least not yet. There are significant benefits to commerce sites as well as consumers if Live Search cashback takes off.
However there’s a piece that seems to be missing from this puzzle: and that’s the actual process of driving new users to Live Search. While a marketing blitz is surely coming, I was surprised to find that there’s no system in place for commerce websites to cross-promote Live Search. Once a user finds Live Search cashback, and starts saving money on purchases, it could become habit forming, all great. But what is in place to drive users to Live Search, and Live Search cashback in the first place? Again, our old friends at South Park come to mind:
Live Search cashback was designed to carry little or no “friction” to commerce sites; that is no hoops to jump through, no extra steps once you get to the site. And all that is great, both for the consumer and for the commerce site. Will it work for Live Search, though? Clearly the onus is on Live Search to drive new traffic not only the search portal and cashback, but to the commerce sites, as well. Certainly any current system isn’t working, as US Search share numbers continue to slide for Live Search, according to ComScore:
Live Search cashback, and Engagement Mapping are definitely potential disruptive influences in the search marketplace, a well defined Step 1. How well they work for commerce sites, for consumers, and for Live Search market share all depends on getting the word out on cashback, and that’s clearly Step 2. Will step 3, Profits, follow?