Bada-Bing… Microsoft to Pay for Searching and Shopping
A report on the Seeking Alpha website said Microsoft plans to pay
consumers cash to use its Bing search engine to make purchases online
rather than Google, Yahoo or others.
Microsoft intends to refund a portion of consumer purchases, up to 50 percent,
for purchases made on e-commerce sites direct from Bing searches. While initially
it may sound as if Microsoft is just throwing money around, in reality it is
essentially relinquishing the fee it would be paid as an affiliate of these
e-tail sites. Instead of pocketing the money for leading a consumer to a site,
it is allowing its fee to go to offset the shopper’s purchase.
While it has not achieved Google-like stature at this point, Bing is off
to a decent start with 25 percent of adults in the U.S. aware of the name.
Microsoft has been somewhat successful in grabbing some share from Yahoo but
not Google. According to comScore, Google has nearly two-thirds of the search
market followed by Yahoo with just under 20 percent and Microsoft at 8.4 percent.
Discussion Questions: Will
paying consumers who buy online from Bing searches result in greater share
of the search market for Microsoft? How much of an affect will Microsoft’s
payment plan have on affiliated e-commerce sites?
Interesting idea, sort of like a credit card rebate or airline loyalty program. It doesn’t necessarily speak well for how Bing is doing, considering that the early numbers have looked promising and especially with the new Yahoo alliance. But Microsoft does have to use those cash reserves for something: Why not an aggressive grab for market share?
Sounds a little desperate to me. Google is so well entrenched, I think it will take more than a few dollars to shift searching and buying behaviors.
It’s very noble and smart of Microsoft to find a workable strategy (cash to consumers) that allows it to play catch up in the search sector. I appreciate the thought that cash that could go to them could actually come to me.
I wonder, though, if consumer search habits are really very entrenched already. I have tried to use Bing as often as I can, but really, the results are just not as easy to navigate, so I default to behavior and a process that I’m familiar with. So I’d have to do an awful lot of shopping online to get the kind of cash it might take for me to overhaul my search behaviors with Google.
Bing has made strides in awareness. But changing usage and repetitive behavior is a whole different game.
Sometimes it takes innovative thinking to build a brand and create consumer usage. That’s what Microsoft is trying to accomplish. By paying consumers only when they make a purchase after reaching a site through Bing, Microsoft is appealing to a near-universal desire among consumers to save money. If consumers like their experience with Bing, they will come back. This is a bold move by Microsoft. I look forward to learning the results.
Paying customers to use your service seems to be a desperate move from a company that seems to always be 5 – 7 years behind the curve when it comes to new innovative ideas in technology and search. Think about it. Since they developed DOS, what new innovation have they brought to the marketplace?
Microsoft is big, they have huge market share, they have tens of thousands of employees, and they have 100% brand recognition. So did Sears at one time. As did Kmart at one time.
Bing will be a good search engine, but it will not dominate unless it truly starts to innovate and incorporates semantic computing. But by that time, we have to assume that Google will already be there.
I like Bing. As far as paying or rebating customers for purchasing? Great idea and it’s not depleting their substantial coffers. Google has a strangle hold on the search engine business and it will take someone with deep pockets to budge them. Microsoft is that someone.
I like it, but I could see shoppers being turned off if the experience is too complicated or there are too many conditions. Microsoft backed stores aren’t known for their ease of use or customer experience. Their target is a younger (less cashed) audience.
Back in the day, I was on a team that developed one of Microsoft’s first in-store fixture and display programs. Their promotional strategy was mimicking that of consumables–sponsoring, couponing, etc. We thought they were nuts. We didn’t think this was the right way to engage consumers and build relationships over time.
My opinion hasn’t changed much over the years, but God love ’em they keep plugging away.
This pay-for-using Bing might be a good way to trial the service. I would say that it’s just like the old “foot-in-the-door” strategy. I can get you in, but you better have something compelling once you’re there.
Here they are mimicking tried and true consumer promo tactics. Makes sense for an introduction, but will it change behavior over time? I’ll be watching.
Being in the loyalty/CRM/engagement marketing space, I think this idea actually has a ton of potential. They have a very unique opportunity to create a captive program with a variety of online and offline partners/merchants/portals. They could offer special bonus soft and hard benefits for their “coalition” style program if designed. Loyalty Marketing is the key to moving market share. Very interesting approach.
Interesting way to steal market share in the beginning. The question is whether people will continue to use it after the rebates or cash or whatever are discontinued. You still need a site that works, is easy to navigate and gets consumers where they want to go with a minimum of clicks.
Sure, paying people to use your service can get more people to use your service, but it matters a lot *who* those people are. Are you getting people who mind every penny and will jump to the next search portal when you stop offering the cash back, or are you getting people who will continue to use the service even after the rebates are gone? The very fact that the people are enticed to switch by the payments implies that they will be likely to switch again.
That said, there can be some lasting value here. First, if this is simply being used as a way to get people to try Bing, and if some of those people truly perceive Bing as being better than Google, then Microsoft can buy itself some long-term users. Second, if Microsoft’s rebate/revenue sharing approach is really their long-term strategy, then they stand a better chance of keeping the users who are enticed to switch in the first place. And in that case, the power of a major search player who’s willing to share their affiliate fees and ad dollars with their user base could be disruptive to Google’s dominance.
And finally, by closing the loop all the way to the purchases that their users make, Microsoft has the ability to build a massive, cross-channel, cross-retailer profile of individual behavior that includes web surfing, search, and purchase patterns. Properly leveraged, that database could be the most valuable part of Bing.
I will act as a focus group of one. After looking at the other articles and learning that by understanding the system I could for example get 20% off of everything I wanted to buy at Overstock.com for example, I would use the Bing search engine. In fact, if I was looking to buy something on the web, I would make sure I went to Bing to see if I could get a cash-back deal. From the numbers I have seen on some of the web info sites, you are looking at anywhere from 20-50%.
As I side note, this is not money that Microsoft was getting anyway because I was using Google before as the search engine to take me where I wanted to go and they were pocketing the money.
I love it.
Isn’t the web an amazing thing?
I agree with Joel, above. Passing along the usage fee to customers is a good short-term gimmick as the name grows, but I just don’t see MSFT carrying this long into the future. They should be concentrating their efforts towards making the site easier to navigate and more customer-friendly. In the long term, customers reward a pleasing shopping experience more than anything else.
Yahoo! was well entrenched before Google came along. And, Webcrawler was well entrenched before Yahoo!. Google is just the latest flavor among those who are followers. If Microsoft continues to do things that make it stand out and bring about new and appealing tech within Bing, it will replace Google as it replaced Yahoo! as it replaced Webcrawler and so on and so on.
I’m a techie so I don’t do the popular thing and I’ve never liked Google. So tired of hearing those trying to sound cool and in the know say, ‘I’ll google it.” So lame!
This doesn’t sound like a loyalty program. It sounds like an introductory promotion which will attract the cherry-pickers. Many consumers may try the product to get the great prices but they will not stay unless the service and experience is better than whatever they have been using.
I will never fault a company for trying something different in an effort to build recognition. However, I’m inclined to agree with Ryan Mathews on this. In fact, it sounds a little like the cash-back plans Detroit resorted to in trying to swing people off Japanese cars. Such efforts typically drive incremental gains at best.
This sounds like a great idea! I think it will take some time though to iron out the model. I always questioned the Google model, where companies must pay per click, regardless of whether it converted into a sale or not? While its great for Google, not sure how great it is for the retailer. It would be much more beneficial to the company if they only had to pay a fee when it results in a sale. So offering discounts that are absorbed by the retailer is a WIN/WIN.
Not sure I understand how this pricing model will work for other searches on more informational or services-oriented type stuff.