ComparisonEngines

Bing Cashback is being retired at the end of July. This is the latest in a long string of confusing moves by Microsoft in the ecommerce arena. Why did Microsoft decide to cut off Bing Cashback? According to the blog post:

…But after a couple of years of trying, we did not see the broad adoption that we had hoped for.

And by broad adoption, I think that the author of the post, Yusuf Mehdi, Senior Vice President, Online Audience Business Group, is talking about broad consumer adoption, although the same could be said of merchant adoption.

According to comScore, Bing Cashback is basically flat since it came out with a bang at arpx 9.7m users in June 2009. Yes, it grew to 14m users in December 2009 (peak holiday shopping season), but dropped back to 9.9m users in April 2010. With all the money spent advertising Bing in general, heavy promotion on Bing.com (shopping was featured and cashback offers displayed in adCenter ads), and lots of great deals, yes, I would have expected more consumer adoption, but besides Google Product Search, most of the major shopping engines have experienced declines in users in April 2010 compared to June 2009 (again, according to comScore numbers) when Bing Cashback was first tracked.

Here are the comScore numbers for the top shopping engines for June 2009 to April 2010)
-Google up 70%,
-Yahoo! Shopping down 19%
-Shopzilla down 14%
-Pronto up 20%
-Valueclick sites up 12%
-Shopping.com down 34%
-Bing Shopping up 2%

Obviously 2% growth is not going to cut it. I have a feeling Microsoft expected a lot more out of Bing Cashback. Bing was basically paying people to buy products, through the regular cashback offer and through double cashback offers, for which Bing Cashback would foot the bill. Considering the horrible state of the economy, I’m pretty sure Microsoft was looking for amazing viral growth for their great deals, which would lead to greater general adoption.

But at the end of the day, the economics probably just didn’t work for Bing Cashback. To drive traffic, they have to promote the hell out of Bing and then to keep ‘em coming back, they have to pay extra for every sale. That’s probably not sustainable.

And there weren’t just difficulties on the consumer adoption front. Merchant adoption was pathetic. This is due to difficulties integrating Jellyfish, scaling the technology, and an excruciating merchant setup process (20+ page setup doc), assuming the merchant was approved at all.

There was always some good buzz surrounding new merchant cashback deals, so Bing was doing something right. But it obviously wasn’t enough to get consumers to change their buying habits.

Who wins with this change?
Google. Google is no longer pressured to provide a CPA offering for merchant, although they are already testing it out through Google Product Listing Ads.

Who loses with this change?
eBay. eBay has some special deal with Bing Shopping, where Bing is paying for at least some of eBay’s offers. At least that’s what I’ve always heard rumors of. With the end of Bing Cashback, eBay has to go back to Google and buy more and more traffic from them. As Ina Steiner pointed out on AuctionBytes
: “Sandeep Aggarwal, an analyst now with Caris and Company, said the retirement of Bing Cashback will increase the search cost for eBay in new customer acquisition, and estimated eBay’s GMV from Bing Cashback as no more than 1.5% to 2% of total GMV.”

Who breaks even?
Merchants. Yes, Bing Cashback had almost 10m users and performed well for merchants, but Bing Shopping will still drive traffic and revenue. It’s just that the traffic will come in a different form.

Which leads to the important question: So what’s next for Bing Shopping?
There are rumors that Bing will try a free offering, similar to Google Shopping. I would assume that Shopzilla, Shopping.com, PriceGrabber, and NexTag are all talking with Bing about powering their listings going forward. These shopping engines can help Bing Shopping monetize really quickly and easily. Bing Shopping could do exactly what others have done and play the shopping engines off of each other to get the best deals and then display whatever shopping engine listing monetizes the best.

And don’t forget that Microsoft’s ecommerce efforts have always had sprinkles of smartness – brilliance would be going too far. The old MSN Shopping was great because it had really solid editorial content backed by lots of offers. Live Product Search had pretty incredible review information, although that data can now be drawn from the likes of PowerReviews and BazaarVoice. And Bing Shopping had a nice integration with Facebook, which is more than most shopping engines have done in the social space. I hope some of these ideas will be on the whiteboard as Bing Shopping reinvents itself. But more on desired features in another post.

There’s a lot of heart in Microsoft’s ecommerce group, but that’s not enough. At the end of the day, I have a feeling that it wasn’t exactly ‘adoption’ that killed Bing Cashback, but rather poor ROI. Microsoft has to show a fast growing, scalable, high margin ecommerce business. Bing Cashback wasn’t it.

This entry was posted on Monday, June 7th, 2010 at 10:53 am and is filed under Bing Cashback. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.