It’s been a year (and two weeks!) in the making, but here’s my annual review of the big events in the rewards program biz from last year! It was a long and eventful year, and not a terribly good one overall, so strap on your helmet and body armor, and let’s recap 2007!
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January: MyTroops.com went live, rewarding military members with gift cards for the shopping rebates of their friends and family. I interviewed its founder in November, who said the site had been changed a lot over the year in response to member suggestions and he was pretty happy with the site’s progress over the year. Kraft Foods announced it would discontinue Kool-Aid Points, though when I revisited their site today, the discontinue notice is no longer there. The site does say the items are only available while supplies [last]. A reader commented on my main Kool-Aid Points review page in March saying Kraft had emailed him and said, “The Kool-Aid Points program is currently being phased out due to decreased consumers participation. If you see an item you like, we encourage you to redeem your points for it soon to avoid disappointment. Items are only available while supplies last.” Many customers left irate comments since then, so perhaps Kraft reconsidered.
February: QuickRewards.net was announced BeenPaid’s Program of the Year. It remains one of my favorite rewards program, the one I use when I want fast PayPal or Amazon credit as a redemption (got a $35 Amazon GC from them this morning, matter of fact — thanks, Dmitry!). BzzAgent’s new site went live, and members were disappointed, not just at the slim selection of redemptions but at the cryptic new quality scores for members. MyPoints announced a site redesign in the works — it went live in August, with a lighter color scheme and some new member polls to enable better email targeting. Also in February: the QuickRewards blog was launched, Best Buy’s RewardZone offered members pre-sale access to Police concert tickets (they ROCKED in New Orleans, btw.. thanks, RewardZone!), Jellyfish’s Smack Wheel had its first $500 winner, and MyPoints’ owner United Online was Forbes’ Stock of the Week at $13.66 a share (it was $10.69 a share on Friday; more on why later).
March: ClubMom closed its affiliate program; they do pay for signups sent to their sister site, CafeMom (they wouldn’t let me into their aff program, though…grr). The OTXsx survey site shut down their affiliate program, also… and a month later renamed their program to Survey Exchange. QuickRewards launched its redesigned site, and after a few weeks of rough sailing, the kinks were ironed out and the site’s doing better than ever. Jellyfish’s co-founder, called a “serial entrepreneur,” sold his other internet company and I asked if Jellyfish might be next. Sure enough, six months later, Microsoft gobbled up Jellyfish. Also in March: WinAtlanta and SixQuestions shut down without notice, Google got into the CPA business in competition with Jellyfish (maybe fueling Microsoft’s interest in JF), and Borders Rewards was revamped. Also, sometime in March MyPoints devalued their points.
April: SallieMae, owner of Upromise, was sold, as Upromise celebrated its fifth birthday. Jellyfish launched Smack Shopping v2, with member pages, wish lists, and personal chat rooms — the Cave was born! 
At the end of April, the Echopinion word-of-mouth marketing program shut down.
May: MyPoints moved to new office space, Freestyle Rewards shut down, and Jellyfish introduced “Outwit the Smack.” A few days later, Jellyfish’s Smack Shopping went 24/7 rather than just at noon on weekdays and on Wednesday nights. (The Tuesday night show was phased out later in the year.) Greenpoints won a commercial award and expanded in-store grocery rewards to include Harps Foods. Upromise got into hot water in Nevada by spending $6 million more than they were authorized to without legislative approval. Microsoft launched Live Search Club to promote their search engine. I expect them to somehow merge it with Jellyfish before 2008′s through.
June: Ebates celebrated its 8th birthday, GradGold was launched, and Albertsons stores started ditching their rewards card. CVS stores announced Extra Care/Plus, a program they were piloting that would link a member’s Extra Care card with his debit or credit card, so just one card would be required at checkout. PointPool vanished, SearchChips was sold and (temporarily?) shut down, and iBakeSale went live. Jellyfish celebrated its first year of operation with a Smack-a-Thon (which I got to co-host), and Jellyfish made Smack discounts instant, rather than having to wait for cash back to your account.
July: A relatively quiet month, thank goodness! Upromise’s website was redesigned and BountyZoo shut down without notice. Strangely, they redirected site visitors to Jellyfish briefly although there’s no relationship between the two programs. BountyZoo’s owners still run the UK program GreasyPalm.
August: United Online announced it would spin off MyPoints and Classmates into their own IPO (a big mistake — they withdrew the stock offer in December, on the day it was due to go live, due to “market conditions,” at a cost to the company of around $5 million). Jellyfish announced that they’d sell a car on their reverse-auction Smack Shopping. They did, on September 5th. The buyer never took ownership, though (long story, has to do with the way the title was transferred to JF first thus it wasn’t a “new car” for financing and tax purposes). BigDevil was launched.
September: Jellyfish converted Guru points to cash for those active in their Quest referral promotion. Best Buy’s RewardZone began allowing online redemption of rewards certificates. FusionCash changed their terms, giving members 180 days to reach cashout before losing earnings. LuckySearch was launched. CompareRewards got a facelift, as did sister site AdLibCorner. I launched the CompareRewards Insider (which I don’t send out often enough) to keep readers in the loop when they forget to visit the site. And at the end of the month, announced on 10/2, Jellyfish was sold to Microsoft.
October: Upromise opened a member forum, QuickRewards started a coupon blog (which is totally not reaching its potential…yet), and I posted my 2007 shopping rebates comparison chart. I’ve gotten feedback from several rewards programs that they use the chart to get an idea of what other programs offer and to then work with the merchants to offer higher rates to their own members. Rates have gone up at some programs since the chart was released (I detail some of the increases at Jellyfish, for example, here).
November: The holiday shopping season kicked off with promotions from many of the rewards programs. Stock analysts voiced concern about the MyPoints IPO, called Classmates Media (good call, as it was pulled at the last minute). Where does this leave MyPoints? Tune in during 2008! Also in November, I hosted a joint chat with AdLibCorner, which turned out to be a lively and informative exchange between program management and members. Lots of warm and fuzzies all the way around (thanks again to the participants!). And finishing up the month: Milesource announced it was shutting down after 8 years in business. Bummer.
December: Holiday shopping promos continued, though I was disappointed by delivery problems with several merchants. And as mentioned before, the last big story of the year was the last-minute decision to pull the MyPoints IPO.
I hate ending the year’s recap on a sour note, but in 2007 the news was more bad than good. We said good-bye to several rewards programs, and although some new ones were introduced, it takes a while for them to establish themselves and to develop trust with members and credibility with merchant affiliate managers. The established programs that remain are hustling to compete — a good thing for members, and hopefully the programs have enough economies of scale from years in the business to be able to continue to prosper while profit margins are squeezed. And what about the transformation of Jellyfish from David to Goliath? Microsoft can negotiate higher shopping rates because, well, it’s Microsoft… but can it retain the loyalty of the old Jellyfish members? And can the remaining rewards programs compete?
2008 is going to be a rocky year, folks. Hang on to your hats!
