Monday, May 26, 2008

Microsoft's Cashback Program: Marketing Genius or Gimmick?

Last Wednesday, Microsoft unveiled its Live Search Cashback program, it's latest attempt to increase Live Search's market share. Consumers can shop for products using this feature, and then compare prices from all featured retailers. Whatever discounts are offered will go directly from the retailer into a cashback account that the consumer can redeem. Here's another description of the program.
While this is a clever way to increase brand awareness for the search engine, it also may prove to be a more efficient marketing tool for retailers. Rather than paying per click, retailers will only pay per action, when consumers actually buy something. This could be a marketing win-win situation for both Microsoft's search engine and its featured retailers.
But will consumers enjoy this feature, or will it be too complex? The cashback can't be redeemed until 60 days after the purchase, and it depends on the retailers offering their best price. For example, I found my Canon SD750 digital camera for $199, or $189 after cashback from Circuit City using the Live Search program. But I could have gotten it for $179 direct from Circuit City's website. How does this make my shopping experience easier?