Microsoft Cashback: How it can be a winner

Microsoft announced a new feature of search earlier this year called Cashback. The promise of Cashback is that if you use Microsoft's web search properties, you may be eligible to receive money back from your purchases. The concept is not new for Discover card users, but it is new for most search engine users.

Over the course of the past six months since the announcement, the feature has been panned by most industry pundits and the overall market share of Microsoft has not increased. 

The question: Is Microsoft Cashback a failure? Is the feature not important?

I recently needed to help my in-laws buy a laptop computer. I went to Dell.com. I went to HP.com. I went to BestBuy.com. At each of these stores, I configured computers and compared prices. BestBuy was my preference because I wanted my inlaws to be able to pickup the computer later that day (instead of shipping in 5-7 days). After cross-tabbing each of the stores and configurations, it was clear I could get a cheaper laptop buying direct from the manufacturer (not entireley true actually - I could have gotten a cheaper laptop at BestBuy but it would have been a brand name I did not know. Yes, Brands and its integrity / credibility are still critical even in a web 2.0 world.). At the last monent, my wife reminded me of Cashback.

First challenge: I did not know where to find 'cashback'. My wife suggested just searching on MSN for 'laptops' and looking for the integrated link in the sponsored search (huh?) (disclosure: my wife works for Microsoft). I ended up trying that and also going to Live.com which has a link in the top right corner of the page in what appears to be 7 or 8pt font (way too small, but I found it).

Ok, so here is the bottom line: Cashback has been totally miscast in the marketplace. It is the best comparison shopping search engine on the market for the simple fact that it allows you to compare prices and you get money back. The problem is that Microsoft cast this as a 'general search' featuure when they could have probably gained dominent market share (and more importantly, credibility) if they had cast this brand as a 'comparison shopping search engine'.

Why? Competing in the comparison shopping search engine space would enable them to compete against market-leading competitors like shopping.com (ebay) and pricegrabber.com (experian). More importantly, they would not be competing against Google for market leadership. Google owns Froogle but it is hardly a core part of their business and is not the market leader. By competing against other players, Microsoft could have (and can still) carve out a very specific win in a lucrative search market - ecommerce. With a win under their belt, they would have a boost in morale and a boost in market credibility.

40% of all search queries are commerce-oriented in nature. The marketplace for search advertising is $15B. Assuming that 65% of that revenue is derived from the ecommerce queries, the total opportunity is ~$10B. If 40% of queries equals $10B in opportunity, for every 1 pt in ecommerce search query share they gain, they gain $250M in annual revenue. More importantly, general search share is less important because every one 1 pt of ecommerce search share is equal in revenue to every 3pts in general search share. Essentially - general search needs to work 3x as hard as ecommerce search to earn the same amount.

Google is known as the search engine for everything, but I think if a survey of consumers was done to compare their satisfaction with using Google.com to drive their shopping experience, the satisfaction would be much lower than for people who use comparison shopping engines. 

There still is time to get the word out. Here is how I would market cashback to the consumer if I had the keys:

• Brand cashback.com heavily during this Q4 holiday season and every other shopping season - - valentines, mother's day, father's day, graduation, etc.
  
• Promote the features of comparison shopping, lowest prices, and of course, cash back
  
• Integrate with MSN and Live search to increase traffic, but focus promotion this as a comparison shopping experience and focus on the Cashback.com domain (which is a lot easier to remember than cashback.live.com, looking for the 8pt font on live.com or searching on MSN and clicking on the ingrated text link in the sponsored search.)
  
• Advertise upcoming 'deal days' using banners (for live price feeds), newspapers (like traditional retailers) and local spot TV (like traditional retailers)
  

By promoting cashback as a feature of MSN and Live search, Microsoft confuses a traffic source (MSN) with a positioning point. To own the segment and get search share, Microsoft needs to tell the world the story about why comparision shopping search engines is superior to general search for online shopping and why Cashback is the best comparison shopping engine.

Historical Comparison of Experience for Past Presidents and Vice Presidents

OK -- here is the question everyone is asking: Does experience matter?


Thinking about the issue, I decided to look backward and compare the current candidates to all of the previous Presidents and VPs. Using trusty wikipedia, I looked at the experience of every President and VP to serve in the US since its founding.

The Bottom Line: Candidate Palin is tied for being the least experienced candidate of all time and while Barack Obama has below average experience, he has more experience than 10 of our previous Presidents including our current one.

Methodology: This evaluation looks at three key areas of comparable experience where ALL previous executives are likely to have experience: military command, federal and state-wide office as reported in wikipedia. Local office was not included because it is not apples to apples in comparison; for example, is being mayor the equivalent of county commissioner or a local judge? The Local data is incomplete and not comparable and more importantly, there is more than enough structured data - aka comparable experience for military command, federal office and state-wide office - to make a valuable comparison. If you want to play with the data yourself, or even add in the Local experience, here is the raw data to do so.

Here are the key findings for President:

• The average President had 18-years experience in military command or federal/state-wide office. John McCain, with 30-years, has 66% more experience than average and Barack Obama, with 12-years, has 33% less experience than average.
• The President's closest in profile to Barack Obama are Abraham Lincoln and Calvin Coolidge.
• The President's closest in profile to John McCain are James Buchanan and James Polk (this was a relatively subjective comparison because, interestingly, no President ever served more than 12 years in the US Senate).
• There have been eight Presidents with less than 10 years experience including Woodrow Wilson with just four as Governor and Grover Clevland with just two as Governor (before his first term as President).
• Barack Obama has twice as much experience today than George Bush had on day one of his term as President and Joe Biden has twice as much experience as Dick Cheney on day one of his term as VP.

Here are the key findings for Vice President:

• At 17 years, the average Vice President's experience in military command and federal/state-wide office is not too far off the Presidents' (18). Sarah Palin, with 2-years, has 89% less experience than average and Joe Biden, with 36 years, has 112% more experience than average (2x+).
• Interstingly, wikipedia did not have much information about military service for the VPs; I am not sure if this is because there is no military service or that the postings are not complete.
• The VP's closest in profile to Sarah Palin are Spiro Agnew, Chestur Arthur and George Dallas .
• The VP's closest in profile to Joe Biden are William King, Charles Curtis and Alben Barkley.
• There have been 11 VPs with less than 10 years experience and six VPs with more than 30 years experience.
• No VP has served longer in the Senate than Joe Biden.
• 11 VPs have ascended to the VP slot after less than 5-years as Governor.
• Of the VPs that Sarah Palin is 'tied' with 2-years experience, Chester Arthur ascended to the Presidency and Spiro Agnew would have if not for his own issues. So, VP Palin turning into President Palin might not be such a stretch

So what does all this mean? Probably that experience in military command or in federal/state-wide office does in fact matter.