Microsoft Ads is now offering Cash back promotions to drive more sales and conversions for online retailers.
How it works. The new feature is a Microsoft-run cash back program for the US on product ads. The goal of the program, Microsoft says “is to drive incremental sales and return on ad spend (ROAS) growth for advertisers and retailers.”
When a user clicks on an ad that features a Cash back promotion, they will have 24 hours after the click to complete the purchase. Microsoft will automatically attribute the purchase to the click and process the cash back.
All Cash backs are managed by Microsoft and users can redeem their rewards through the Microsoft Cash backs dashboard.
The Cash back promotions are served for eligible campaigns if and when the AI determines that it will bring in value. They do not give any indication of the criteria the AI will use to determine where it will serve the promotion.
What Microsoft says. Microsoft claims that the increased performance will outweigh the cost of the program. If they cannot deliver on performance, the AI will not serve the promotion. However, in the blog post announcement today, Microsoft says the cost per click (CPC) you’re charged will increase nominally to accommodate the cost of optimizing the program.
The goals of Cash back promotions. According to Microsoft, the goals of the new Cash back promotions are:
- Grow sales efficiently by incentivizing users with the right value of savings to drive conversions.
- Optimize savings to users’ needs by showing them deals for products they care about, thereby increasing efficiency.
- No effort is required because Microsoft uses your existing campaign setup. Microsoft also handles all optimizations and post-purchase inquiries.
Setting up Cash back promotions. Microsoft claims that there are no additional set up steps required to serve Cash back promotions. Microsoft handles all optimizations, payouts, and user inquiries. They do, however, require that you have purchase conversions set up, as well as a bid strategy that is “optimized for growing conversions and conversion values.” As if retailers would have less. They also suggest “a budget to have the headroom to accommodate any increase in volume.” Though, they give no further guidelines on what that budget is.
Read more about Cash back promotions. You can read the full post here.
Why we care. Though this is a Microsoft-run program, online retailers are paying for it through increased CPC’s. If the Microsoft AI can differentiate between low and high-value sales, and drive traffic accordingly, seems like a great way to get more clicks and conversions. However, we have yet to see if the increased CPC will make the program worthwhile.