Whats the impact to Affiliates - Microsoft to Introduce CashBack for Clicks ?
Submitted by joshinfo on Wed, 05/21/2008 - 16:14.
Just read this - Microsoft is going to introduce cash back for clicking through and buying from merchants.
How will this impact affiliate marketing ?
--edited link so it didn't stretch the page out ;)
Depending on how far MS takes it, this could be HUGE!
The writers of the article missed the target completely, IMHO. They see MS rebating *only* part of the click cost -- but MS could be rebating not only on that but *also* on their affiliate commission, so their analogy of a 50 cent rebate on a $25 transaction quickly disappears (if this is the case).
If MS gets $1 for the click and just a 10% commission on a $25 sale, they now have $3.50 they could potentially rebate on a $25 sale. This would mean only a "break even" on the front-end -- their back-end is HUGE -- they stole an eyeball from Google, LOL!
If the commission was 25%, look at how big the potential rebate could be.
I know this: when buying *anything* online, I will at least check with MS Live Search to see how big the rebate is (or if there is one) before making a purchase and, if most people follow suit, MS will have almost leveled the market share of eyeballs with Google...and I think that's their goal :)
Google's response will be interesting.
Last but not least, when the "big boys" fight, the little guys like us can make big, BIG gains very, VERY quickly, so I see this as nothing except a positive!
Google and MS will get most of the revenue that now goes to affiliates. Both of them are essentially going to eat into the Affiliate marketing share pretty rapidly and we will see diminishing returns very very soon.
Sorry if I sound pessimistic, but where is the glimmer of hope in this -and where do you see the big gains ?
Where do I see possible gains? For one, this might well hinder Google's relentless escalation of click prices -- their "we're #1 and we don't have to explain ourselves to you" mindset might also be in for a slight adjustment.
Of course, either of those will depend on MS being able to make a winner out of this (something that's certainly not guaranteed). But I hope they do it...man do I hope that MS can make this a winner and bring some SERIOUS competition to Google!
In short, there's nothing that the marketplace (or marketers) can do when one company has a stranglehold on that market -- except "play by their rules". But when there's competition, the marketplace itself gets to write the rules to a much larger extent (and good marketers are a much sought-after part of any competitive marketplace).
I just hope that MS is able to compete well because competition is good for everybody (well...except the former monopoly holder I guess, LOL!).
As for me and my PPC efforts, if I can't switch a possible buyer from buying based on price alone (this appears to be MS main tactic) to buying my product because it has better benefits for them, then I'm not a marketer -- a "PPC marketer", "Affiliate Marketer" or any other kind of "marketer" -- I'm just an "order taker" hoping a buyer happens along.
Yeah. I just got a call from a tech friend about this. Article here: http://tinyurl.com/52u2ju
Here are my thoughts:
1. This is not sustainable for the merchants. They are effectively firing their affiliates who advertise on MSN. They'll lose the loyalty and creative marketing of army's of predictably paid sales staff. (affiliates)
2. This is not sustainable for search engines. If this service takes off for Microsoft (meaning they grab a chunk of market share from bribing searchers) then the other engines may be forced to offer a similar model. All this does is then force merchants to lower their costs effectively without the benefit of the paid affiliates promoting, reviewing, and referring their products and brands. It would be, potentially, a large equalization process.
3. This is really a crappy thing for MS search to do to a large contingent of their most active advertisers. They're basically kicking their affiliate advertisers in the balls. Doesn't really feel good.
I was just looking at the service and see that NewEgg.com is using it. How do the thousands or NewEgg affiliates feel about that?
There's a lot to say about this. I'm looking forward to other's thoughts. Perhaps it's not a big deal or maybe it is.
I haven't had time to let this digest yet (and have limited knowledge of their plan), but here are my initial thoughts...
-It's a desperation move by Microsoft
-Microsoft still doesn't get search - it's about results, and their's aren't as relevant as Google's
-It's too limited to be effective
-It's impact on affiliates will be minimal (low marketshare + handful of merchants)
-If the affiliate cookie is present the affiliate should still receive credit - no?
With that said, I'll be watching this very carefully to see how it plays out.