Paying for your loyalty... in search

So if you haven't seen it, Live.com/cashback released on 05/21/08. It is a rebate-based program that gives customers cash back for using Live Search to originate their product purchases.

The move is getting a lot of play in the "Search World." Some see it as an act of despiration to "buy eyes" to the fledgling Microsoft Live Search. Others see it as a "game changer" along the lines of google checkout and its free shipping during the holiday 07 season. One thing the move HAS done... is opened up a very interesting CPA-Based model for online retailers.

CPC vs. CPA is one of those "open source vs. microsoft" or "chocolate vs. vanilla" arguments that can go on forever and usually give me a headache. Bottom line is this: CPC - measureable to a point for a retailer, probably drives more eyeballs but less quality. CPA - more measurable (you can attribute a sale easier) drives more quality eyballs... but... it typically costs more per "unit."

That being said... there haven't been a lot of compelling "search engine" CPA opportunities until now. The ones that have tried in the past... have met with limited or no success. Most of the time, they were designed to be a product to offer for the retailer or "acquirer" and not to have much benefit to the "owner" of the program. In this case... it is really a strong attempt by Microsoft to grow their name in search. This means... the retailer or acquirer could be in a distinct advantage if they get in while the buzz is hot. It also isn't a bad deal for the consumer either!

Consumers... like this type of loyalty acquistion in the short term. But as I once heard true loyalty cannot be acquired... it is attained. So... the bet here is that the consumer will try the product in the "bought phase" and see how things grow from there.
All in all... interesting plan.
Cheers,
ORG

In the interest of full disclosure, ORG is affliated with Live.com, however is NOT affiliated in any way with this program.