Who Benefited from Microsoft's Bing Cashback?

Consumers looking for a great deal got the bargain of the summer thanks to Microsoft’s Bing Cashback program. The Bing Cashback program enables users to save money when shopping online by offering cash back on purchases made at participating retailer sites. For two and a half weeks in August, Bing Cashback featured a back-to-school campaign in which merchants offered up to double their typical rebates on select purchases. Several retailers even touted a whopping 50% cash back on purchases. Compared to the month prior, traffic to the Bing Cashback/Shopping portal during those 2+ weeks increased more than 30% as consumers flocked to the site searching for great deals. Participating retailers also saw surges in Bing driven traffic as millions of consumers clicked through to the participating merchants to shop.

• Not surprisingly, mass merchant and electronic retailers dominated both these lists. Students (and parents) in need of computers, dorm supplies, backpacks, books, and new clothes visited these retailers en masse.
• Even with some merchants offering 50% cashback, Overstock (OSTK), Sears (SHLD) and Buy.com could not be knocked from their top positions on the most visited list.
• Walmart (WMT) fell short of the growth experienced by Overstock and Sears and actually declined in the Top Visited rankings.
• Eastbay benefited heavily from its 50% cashback offer; traffic sky rocked over 600% and the merchant edged its way into the Top 10 list.

And did the increased cash back actually lift sales? Definitely!

• For most of these retailers, conversion rate among Cashback users was more than double the rate of other shoppers.
• Eastbay, again, stands out with a staggering 22% purchase rate; apparently Cashback users can’t pass up half priced sneakers.
• Cashback users snatched up discount electronics. The purchase rate for Cashback visits at HP (HPQ) was 10X higher than the general purchase rate. Equally as impressive, 1 out of 5 times a Cashback user visited Newegg they purchased an item.
• Tigerdirect.com is the only retailer whose Cashback purchase rate is less than the general purchase rate. I guess when you are buying big ticket electronics, a few more percentage-points cash back in your pocket is worth shopping around for.

Bing’s back to school promotion effectively drove more sales at retailer sites. In fact, the promotion was such a hit that Microsoft ended the event several days earlier than originally announced. The success of this campaign indicates that back to school shoppers this year were prepared to shop, but were very price sensitive. Given shoppers’ tighter budgets, the extra savings probably prompted sales of items consumers were delaying purchasing or willing to forgo all together. Looking ahead to holiday shopping, it is promising that an extra sale is all consumers need to open their wallets a little bit wider.

Comments

[WD216:]

Do you know that Microsoft screwed the smaller businesses on the cash back program since they could not be a part of it? Since small business is what creates the jobs how does this cash back only with large corporations help unemployment drop and the economy recover?

I am against any policy that discriminates, obviously you aren't.

Sep 14 01:36 PM

[Josh B Thom...:]

previous commentor is against discounts? That certainly is little guy, consumer friendly.

Sep 14 01:41 PM

[WD216:]

Josh you obviously missed the point. Sad.

Sep 14 03:29 PM

[jack dee:]

you have missed the point , cashback is about consumers getting a price break.

It is NOT about big biz or small biz, that is your agenda, and trying to tie it to BING is just FUD


On Sep 14 03:29 PM WD216 wrote:

> Josh you obviously missed the point. Sad.

Sep 14 05:08 PM

[dingojoe:]

For retailers it was about sales and promoting their brand, partly on Microsoft's dime. Clearly, if small retailer's were excluded, they have a right to be cranky.

Sep 15 01:29 AM

[WD216:]

Jack, yes the cash back was good for consumers and the big corporations, but how about the small businesses? Microsoft refused to let them in on the cashback deal so these small businesses could also offer savings to their customers.

I know the government has bailed out big corporations and at the same time raised taxes on smaller businesses and also let them go bankrupt without blinking an eye, but have the American people also turned their back on small business?

Sep 15 09:05 AM

[dingojoe:]

What taxes have been raised on small businesses?

Sep 15 11:20 AM

[WD216:]

DingoJoe, as per Obama's campaign promise most successful small businesses make an income over $250,000 per year and are "S" corps, so they pay taxes like it's personal income. Higher taxes on the so called rich results in small businesses paying the higher taxes. When small business have to pay higher taxes, they hire less, invest less and the ripple effect is high unemployment and a sluggish economy. Note what occurred in the decade of the 70's.

New York State added insult to injury as they added an additional payroll tax on businesses. Just what small business needed. Way to go liberals!!!!

People are going to wonder why the economy continues to stagnate. Answer is small business (which are 95% or businesses) is being taxed to death. Thank you to Obama and his "change".

Sep 15 11:44 AM

[jack dee:]

It is clear WD216 just has an axe to grind, and is willing to make up any silly thing to push his view.

MSFT IBM MCD are FOR PROFIT companies, and nothing else.

Sep 15 04:09 PM

[WD216:]

Jack, no axe to grind, just stating a fact that Microsoft screwed the small businesses. Sorry the truth hurts. I never made any comments about profits they are or are not entitled to. If it doesn't bother you that Microsoft is screwing small businesses for profit then they are the company for you.

Sep 16 08:49 AM

[Boaz Berkowitz:]

I covered the cashback program in depth in some of my recent articles:

seekingalpha.com/artic...

seekingalpha.com/artic...

But one question remains is will there be a lasting impact? I for one did make use of this promotion, but my loyalty has not increased at all. I simply go to which ever cashback promotion offers the highest payout (usually bing since they use their cashback program as a loss leader but not always - sometimes the competition has a better promotion or features a store that Bing is not partnered with). I suspect most other users are the same - this kind of promotion specifically appeals to price sensitive customers. In other words, they'll go where ever they can get the best deal. So using the current strategy, Microsoft may only build market share by literally paying users to search with Bing. As strategies go, that isn't sustainable for the long term.

Plus I've been dismally unimpressed with Bing's support. My wife had a problem where all of her cashback was inexplicably canceled. She's been waiting for the problem to be resolved for over a month to know available. We never had that sort of trouble with other cashback sites like Fatwallet, Ebates, Mrrebates, etc.

As an advertising tactic though, it was brilliant. A few months ago, no one heard of Bing. Within its first few weeks, already 1 in 4 US adults recognized the name somewhat. That is quite an impressive feat. I don't know how much money Microsoft blew on this promotion, but it could easily have been less than a mass advertising campaign would have cost them. And was likely more effective too.

Sep 24 06:24 AM