Microsoft Ads now offers a full cashback program tied to search to drive more sales and higher return on ad spend (ROAS). The program is based on artificial intelligence (AI), optimization and managed entirely by Microsoft.

John Lee, Microsoft search evangelist, said the coupon space is growing. Based on industry analysis, the market could reach roughly $30 billion by 2033 for coupons. “When I read the slide the first time, I had to go back and read it again,” he said. “It’s mind boggling, given where the space was in 2020.”

Some 45% of consumers are “rebalancing their household budgets” and looking more frequently for sales and coupons, he said, citing numbers from the National Retail Association.

Inflation has prompted the change.

Email marketing had been the way to discover coupons, but online media has enabled advertisers to target and deliver coupons through a variety of ways, from cash-back programs from companies such as Rakuten, Ibotta, and RetailMeNot. And now Microsoft.

Lee said the second-most common way that people gain cashback incentives is through online searches,as people actively seek discounts. One major home and garden retailer that was not named experienced significant lift based on 750,000 impressions from March to May 2022, he added.

Microsoft’s feature only serves a discount for eligible campaigns and users when the AI determines it will “bring incremental value.”

The cost per click (CPC) charge seen by the advertiser on the ads in the eligible traffic will increase to accommodate the cost of optimizing this program and bringing better performance. The increased performance will outweigh the costs of this program.

“If we cannot deliver on performance, our AI optimization will not serve Cash back promotions,” Amanda Warren Santoro, product manager at Microsoft Advertising, wrote in a post.

The feature is limited to advertisers and consumers in the United States. The ads will serve only on PCs, for now, when the consumer searches on Bing using the Edge browser.

Yes, its limited, but Microsoft is looking at ways to expand the feature.

The cashback program an auto-applied extension to shopping ads and test ads. When consumers search on Bing, they will see a percentage off for companies using the advertising options. When arriving on the landing page, the user will see a cashback reward amount. The consumer can claim the cashback following the purchase.  

One a consumer clicks on the ad the person has 24 hours to complete the purchase. Microsoft automatically attributes the purchase to the click and process the cash back. All Cashback offers are managed by Microsoft and users can redeem their rewards through the Microsoft Bing Rebates dashboard.