Auction #fail
As all keen Ebay-ers know the last thing you want to do when selling an item is stifle interest. It is a fine line between setting your reserve price too low and risk being caught short and setting it too high and driving away interest. But this appears to be exactly what Evening Standard have done in their most recent e-auction of their Olympic inventory.
The Evening Standard this week is running an e-auction for advertising slots including cover wraps and other types of advertising opportunities over the course of the Olympic Games, in the hope of increasing commercial revenues over that time. Although the auction is not yet over as we write this the auction hasn’t attracted a single bid (according to Media Week).
The reserve price (which was also the minimum bid), on much of the inventory offered by the Evening Standard, was within the range usually paid by media buyers. So it seems to us that the media buyers would have little interest to get involved in the auction if they think they would be able to obtain it at that price in a usual transaction.
Think about it, if you buy a pound of strawberries every week for £5 would you enter an auction for a pound of strawberries that starts at £4.90… Probably not.
By ‘Anchoring’ their inventory against a price media buyers normally pay, the Evening Standard appears to have shot themselves in the foot as they have failed to drum up any interest. I have a sneaking suspicion that a financial controller at the Evening Standard would’ve wanted some sort of guarantee of income, although I think they could’ve come up with a smarter way of doing it like having no minimum bid but with a reserve price tucked away in the small print somewhere.
The Evening Standard will probably get higher than usual rates for their Olympic inventory, as media buyers realise this is premium inventory. This is because the population of London is predicted to double during the Olympics and their circulation will most likely shoot up along with interest in the stories it generates.
However, we feel they have badly misjudged the way in which auctions and bidders think and behave.