onlinemarketing

MSN Live Search with cashback, goodbye CPCs?

MSN is onto something with their Live Search. If you haven't noticed you can get cash back at numerous merchants across the web by shopping through MSN Live Search. Cash back has been met cooly in the past by consumers contrary to popular belief. Many have tried (Shopping for one) and entire sites are dedicated to the concept (Cashbaq is a good example).

But play this idea through - none of the other cashback sites really have had the traffic volumes of MSN. Some have grown really fast, but don't have the average monthly unique visitors of Live. The major development for ecommerce folks is that Live search is a revenue share opportunity - meaning retailers pay MSN only if MSN drives a sale. This is the good thing the Jellyfish acquisition brought to Microsoft. Right now, MSN is passing back some/all of the revenue share earned directly back to the consumer in the form of cash back. A sort of self funding marketing and traffic building program.

The current implementation begs the question: "What if MSN rolled revenue share out to their entire search program and what would be the impact on Google?" One way to compete is to change the game, specifically, change the pricing game off of CPCs and onto revenue share. Obviously this is a retail-centric model, but imagine if MSN came in under Google on the ad pricing and ROI, which I bet they are for many retailers. Obviously search volume is a major factor, however, if you want take some wind out of Google's sails this would be one way to do it. Google is a one trick revenue pony today. Nothing in their revenue portfolio compares to the revenue earned from their Adwords/AdSense business.

MSN stands to win on two fronts (1) increasing search share like they did in June (2) suck the margin out of the market by pricing on a revenue share. MSN has failed increasing search share alone, so making the entire channel less lucrative is a logical albeit devious strategy. In this specific case attacking sales margin is a viable alternative given how far behind MSN is lagging behind Google.

I for one would love to see the world get off CPCs, go Live Search with cashback!

Google Investors Easily Drive Revenue

While talking shop this week with a fellow online marketing geek, the conversation turned to Google. My friend mentioned he recently purchased some stock in the search giant. Probably a pretty good investment over the long run. Half jokingly my friend said he had to leave our chat to go click on some ads and drive some revenue for his new investment. I am sure his contribution to Google's revenue would be completely insignificant even if he was smart enough to click on the high CPC words like "hardrive recovery" or "mortgage loans".

What struck me askew was the relative ease with which Google investors could drive Google revenue. No, this is not a click fraud diatribe. It is an age old investing philosophy to invest in those companies which you patronize. In the old model an investor would spend money on the company's products. If I owned Pepsi stock I would buy Pepsi products. This model retains its integrity as I only have a finite amount of money with which to spend on Pepsi products.

In the Google world the revenue event has an incredibly low barrier. That event is a click of course. The major difference with the click is that if I am investor in Google (unlike the Pepsi model) I am causing somebody else to pay Google money and theoretically I comparatively have more time to click than dollars to spend on Pepsi products. Sure some online purists would say viewing a page thus incurring an impression is an even easier revenue event. The difference here is that an impression is passive while a click is active. The integrity in the Google world is easily eroded.

The real question here that I am thinking through is: Is there another publicly traded company that has a revenue event that makes it easy (in other words, as easy a clicking") for investors to initiate other parties to pay the "invested in" company money?

One solution is for all Google investors to publicly declare their conflict of interest and any clicks from an investor (or an investor's company) be determined as non-revenue events. Even if the revenue from investors (whether the clicks are intentional or not) amount to nothing, it is still important to be above board on matters that rely on transparency like investing. Google might be all about "Do no evil", however I am not naive enough to believe the same mantra holds true for Wall Street.

Going Stag

Funny to see this post from Robert Murray, President of iProspect. Robert asserts dating is the perfect metaphor for choosing a SEM vendor. The irony is in a recent RFP process we handled at Downtown Ecommerce Partners for a Client, iProspect was invited to go dating and opted out. Hard to get married if never given the chance. In today's environment I would think SEM firms would want as many dates as possible as switching costs can get high.

What strikes me even more askew is Did-Its corporate policy of not participating in RFPs at all.

The recent influx of money into Search and online advertising really fogs people's memory from the times 24 months ago when new business was coveted. The pendulum will swing back the other way one of these days, it always does.