By MICHAEL LIEDTKE
SAN FRANCISCO (AP) — While most forms of advertising are getting better at targeting likely customers, coupons rarely hit the mark. To wit: U.S. consumers redeemed less than 1 percent of the estimated 285 billion coupons issued last year for groceries and various packaged goods.
But a small Silicon Valley company is striving to improve coupons’ aim with a new online distribution network based on a contextual concept that helped turn Google Inc. into the Internet’s most popular – and profitable – advertising vehicle.
After several weeks of tests, Mountain View-based Coupons Inc. plans to unveil its “Brandcaster” system Monday.
Finding online coupons now typically requires consumers to make a special trip to Coupons Inc.’s site, coupons.com, or similar destinations like smartsouce.com, ppgazette.com and coolsavings.com.
If Brandcaster works, Web surfers should start seeing more offers to print out coupons for products that have a contextual connection to a topic that piqued a reader’s interest in the first place. For instance, someone looking at a Web page about healthy food might be offered a coupon for organic milk.
It’s the same idea behind the text-based ad links that Google displays alongside search results and other information at hundreds of thousands of Web sites.
Coupons Inc. even recruited one of Google’s advertising masterminds to become an adviser for the Brandcaster system.
Gokul Rajaram, who left Google late last year, said he wanted to help out because he views Brandcaster as a logical extension of Google’s “AdSense” – a system he helped launch in 2003 to distribute relevant advertising links to other Web sites.
Since then, AdSense has attracted more than $15 billion in advertising revenue.
Coupons are “one of the big bastions” of advertising that still hasn’t made a significant move to the Internet, Rajaram said. “I think this is can drive large amounts (of coupons) online.”
If Rajaram’s right, Brandcaster could drain even more revenue away from the beleaguered newspaper industry, which has been cutting staff and other expenses to cope with advertising’s accelerating shift to the Internet.
Advertisers paid newspapers to distribute nearly 90 percent of the coupons issued last year for packaged goods, according to NCH Marketing Services, which helps retailers turn in redeemed coupons to manufacturers.
Just 0.4 percent of the packaged goods coupons were printed out on the Internet last year, NCH estimated.
Steven Boal, who started Brandcaster a decade ago, doesn’t have any delusions about approaching Google’s ad volume.
But he believes Brandcaster will play a pivotal role in achieving his goal of generating $400 million to $500 million in annual revenue, paving the way for a possible initial public offering of stock. He declined to reveal privately held Coupon Inc.’s annual revenue.
To start, Brandcaster will distribute coupons from about 200 brands to about 3,000 Web sites. The advertisers sending their coupons through Brandcaster include General Mills Inc., Kimberly-Clark Corp., Kraft Foods Inc. and Clorox Co. Within a year, Boal hopes to have 35,000 Web sites showing coupons through Brandcaster.
Like Google’s advertising system, Coupons will share revenue with the Web sites participating in Brandcaster. Advertisers will only have to pay when a consumer prints out a coupon…
June 2, 2008
NEWS: Ad network strives to make coupons more meaningful
May 21, 2008
NEWS: Microsoft looks to buy way into search (With CPA Model)
- SEM appeals primarily to millions of smaller advertisers.
- Search is broader than a handful of promotional products.
- The Yahoo acquisition/deal builds critical mass.
Microsoft looks to buy way into search (again)
REDMOND, Wash.–Microsoft is looking to buy its way into search, and I’m not talking about Yahoo.
The software maker plans on Wednesday to launch a cash back program to those who buy things after using its search.
Microsoft has details of the program up on its Web site, including a list of frequently asked questions.
“We want to earn your loyalty and reward it with cashback savings for your everyday online shopping,” Microsoft said. “We are ‘The Search That Pays You Back!’ “
As previously reported, Microsoft is due to show off its latest enhancements to its search product at the Advance 08 advertising conference here. Microsoft Chairman Bill Gates is set to offer the main address of the event on Wednesday. I hear the company has more than just the cash back effort up its sleeves.
In any case, it’s not the first time Microsoft has tried to use financial incentives to boost its search share. It has run a number of programs including its Live Search Club that offer rewards for those that use its search.
The Live Search Club effort briefly boosted Microsoft’s search market share last year, but the gains have proved short lived. Microsoft has been losing ground since then and has returned to a single digit share of the market.
The news was reported earlier Tuesday by Search Engine Watch and the Seattle Post-Intelligencer.
According to the reports, Live Search Cash Back, is based on Microsoft’s acquisition last year of Jellyfish, which has been piloting such a program, the reports said. Jellyfish said on its Web siteTuesday night that it was “currently offline to perform necessary service upgrades and enhancements.”
Meanwhile, there’s still no word on Microsoft’s other, more expensive effort to buy search market share.
Microsoft To Offer Cash Back To Search Engine Users In Effort To Fight Google
Microsoft will announce a new search advertising model tomorrow at the Advance08 Conference in Bellevue, Washington – some parts of the site are already live on Microsoft now (see screen shots below). The core of the new service will be a new set of 18 new vertical search offerings that will give users cash back on any purchases made from advertisers.
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A number of high profile ecommerce sites are participating in the early stages of the program, which is being dubbed “Live Search Cashback” and is based at least partially on technology developed from Jellyfish, a company Microsoft acquired in 2007. A message on the Jellyfish site says the site is down “currently offline to perform necessary service upgrades and enhancements.”
The goal, of course, is to lure high value searches away from Google. Only a small percentage of total searches are highly valuable, usually because advertisers are right on the cusp of selling something to the searcher (searches for books, for example, or mortgages).
Microsoft’s hope is to lure advertisers with a promise to pay only if a purchase is made, unlike Google’s pay-per-click model that carries more risk because a searcher may not complete a transaction. And by offering a percentage of the fee collected from advertisers, Microsoft hopes to convince searchers to take the last mile to a transaction through the Live.com search engine, generating more advertising revenue for Microsoft and simultaneously hurting arch-rival Google.
The new product will be announced tomorrow morning by Kevin Johnson, the President of Microsoft’s Platforms & Services Division. We will be live blogging the event.
Farecast, a company they acquired last month, will likely power travel, one of the 18 verticals.
The Yahoo Angle
This fits with Microsoft’s recent re-engagement with Yahoo and a new proposal to take over Yahoo’s search business. Microsoft will look to make a big splash with advertisers right away. By removing risk (moving from CPC to CPA) they will get part of the way there. But Microsoft also needs to offer advertisers enough inventory to make it worth their while – Yahoo search traffic does that.
But even without Yahoo, Microsoft may find a warm reception from advertisers, who currently see a virtual monopoly by Google in the search advertising space. It’s in their best interest to have as many strong players vying for their business as possible, so any competition to Google may be worth their time.
Look for more details tomorrow morning.
Microsoft’s “Cash Back” Google Search Killer: Great Idea, Won’t Work
More specifically the program, known as “Live Search cashback” (which is actually already live) will pay consumers who find and buy a product via Live Search a certain percentage of the purchase price back. Microsoft has already signed up partners including Barnes & Noble, Sears, Home Depot, J&R Electronics and Office Depot among others. This new approach stems from Microsoft’s acquisition of comparative shopping engine Jellyfish last year.
Microsoft Live Search: If at first you don’t succeed, pay your users
To some, this may read like an article from the parody site The Onion — but it’s not. Microsoft is preparing to unveil a new initiative for its Live Search product on Wednesday, one that will pay users to use the site, according to The Seattle Post Intelligencer.Microsoft Unwraps Search Engine Reward Program
Microsoft to Launch Cashback Service
