Everyone has an opinion of the recent TRAFFIC auction. This post has nothing to do with the TRAFFIC Conference, as I was not there but from the posts I read from Elliot, MHB and Ron Jackson it sounds like it was an absolutely worthwhile event.
I was a registered phone bidder and took part in some of the auction lots. That being said, I feel the argument I keep hearing that the absence of online bidding really hurt the auction is invalid. I can understand and appreciate what organizers are doing to make the TRAFFIC auction more transparent. The phone bidding system WORKS. Minutes before every auction lot I was interested in I received a phone call from the auction floor and was notified which name was coming up and asked if I had a top bid in mind. The phone bidding system was great, no online streaming problems or confusion and most importantly no unknown bidders. To register for phone bidding you had to be accessible by phone, have a name and email.
Who is to blame for the ‘unfavorable’ auction results?
Here’s my thought on that question. The blame falls on the SELLERS who paid to have their name in the auction. Rick wrote many times, as early as February this year about the new format and that the SELLERS are mainly responsible in getting end users to the auction or registered for phone bidding. You can read his posts where he tells sellers this here, here and here! A couple quotes from these posts:
“It takes time to really market a domain. Each seller has a duty to HELP market their domain. Howard and I will do what we can. The auction houses will each be doing what they can. We will all be rowing in the same direction for the first time and you will see RESULTS when that happens.”
“If you want to sell your domain at the highest price you need to promote and create desire among interested parties. 3 weeks does not cut it. NOW is the time to think about courting buyers and have them vie for your prize this October. It takes months to create an effective “Buzz”.”
I don’t think many of the sellers were paying attention, or didn’t care when they submitted their names. Maybe they didn’t actually know of this strategy or read those posts. How hard is it to get an end user registered for phone bidding? Probably pretty hard, but if you played the game the way it was supposed to be played, sellers had SIX MONTHS to work this out. I also feel an end user would be more comfortable registering to bid on the phone while watching the live stream as opposed to registering to a website to bid. The phone system just feels more legitimate, you feel like you are in the room – because YOU ARE in the room with a live person representing your bids.
I was a little discouraged when in the weeks leading up to TRAFFIC 2011 as I saw more and more posts from RicksBlog.com announcing high value names added to the auction. Those are the type of names that if marketed for six months may have had a chance to make the auction spectacular. I’m talking about Power.com, Cheese.com, Dubai.com, Optical.com among others.. I can understand why show organizers did this, it does make for more of a buzz leading up to the auction, brings more of an audience. Of course in a room full of domainers and mainly domain investors watching/bidding on the phone these type of names didn’t get high bids close to the seven figure reserves. Domainers look for deals, Dubai.com for four million isn’t a deal for a domainer but to a Sheikh from Dubai it may be a good deal.
For the next TRAFFIC auction, I actually hope the format stays the same, but I think the organizers need to drive home the point even harder to the sellers – market your names! TRAFFIC is the premier domain industry conference, a great place for end users to get acquainted with the domain industry. I do like that no reserve names were a part of the auction but I think it would probably be better to have all of the no reserve auctions held prior to the other names instead of mixing them in.
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Thank you. This was an excellent analysis and spot on. Thank you also for participating as a phone bidder.
Thanks for the comment Howard and congrats on the successful show.
Interesting post.
It did raise a couple of questions in my mind:
1. Traffic’s stats from before show some impressive domain sales.Did sellers on previous auctions market their names and did a better job at this?
2. Why would the owner of Dubai.com for example list his name at Traffic if he would know a Sheik from Dubai and could sell this name to him directly?
Just my thoughts. Not trying to be a critic or anything.
Mike,
Although I don’t agree with you completely I can understand how phone bidding would feel a little more professional then online bidding. With that said, when you are trading a virtual asset such as a domain name you should also have a virtual platform available to bid on this asset. I have a hunch that next year an online auction platform will be available as well as phone bidding. The more options the better.
@Roma
i am from dubai … and i am telling you no one would pay that amount for Dubai.com. NOT even half the price.
the economy is bad. some domineers can’t understand this point and they still live in the bubble dreams
@Roma – I was using Dubai.com and a Sheikh in Dubai merely as an example to make a point. I don’t know if that price tag is or is not a deal to Royalty in Dubai. To answer your question, the reason is simple, there could more more than one party interested in Dubai.com right? That’s the whole point of an auction, to drive more than one interested party to it so that a higher price is reached than would be possible through one on one negotiation.
@Jason – You make a good point, however, from watching past live auctions with online bidding I haven’t seen one that went off without a hitch. This may seem ridiculous, but I just don’t think the technology is available yet to the domain community that will allow a seamless and smooth online, phone and live auction.
@Majed – I totally agree with you on the economy issue. Although it’s a good time to buy something right now people just don’t seem to have a desire to do it.
I really don’t think that organizers did something wrong in terms of putting the whole event together – they have a huge background and know what they’re doing. And I don’t think that the results of the auction depend only on the fact that there was no online bidding. I’m sure that if someone wanted any name really bad they would find an opportunity to bid.
@Mike – thanks for the response. The point of my question is that people who paid to list their names thought that they did enough:in their mind the fact that their names have been listed meant that they will sell. Apparently they were wrong.I just wonder if seller on the previous auctions did something to move their names except for listing them for sale. Sorry if I didn’t put it right the first time. I know what the auctions are for 🙂
So I’m clear hear Mike, you think when one ‘pays’ to have their name in an auction (‘if’ it’s accepted!), should be solely responsible to market their names, and thus it is ‘their’ fault for not doing so and their name not selling?? Then what should the auction house that is getting that ‘paid’ money, along with their % of the commission, be expected to do? Blame ‘them’ for being lazy and not doing enough self marketing??? On that angle, maybe since people ‘paid’ to attend a conference, they should be expected to bring their own food! Or it’s their own fault for starving!
I agree one should market their names, but it shouldn’t ‘be’ their responsibility to market an ‘auction event’.
@Kevin – Did I say ‘solely responsible’? No. What I said was that it was supposed to be the sellers job to bring end users to the auction. Did you expect Rick, Howard and the TRAFFIC team to hit the phones and emails and try to get end users to the auction?? Sellers paid to have their name in the auction at the domain industry’s premier conference. That alone gives the name(s) huge exposure. If the end user wasn’t there, the result was that the name sold for (or got a high bid) at what a room full of domainers and domain industry professionals value the name(s) at. Which in most cases is nowhere near the value an end user may put on the same names. That’s why I think it’s so wacky for people to say that the auction proved how the domain industry is weakening… get real.
* Also, I never said sellers should market the ‘auction event’. I think you need to re-read the article.
@Roma – I think my response to Kevin kind of answers your question too. Just because sellers paid to have their name in the auction doesn’t mean that the name will sell for whatever reserve they set.
Thansks for this post Mike.
There are some things that I didn’t like:
1. Reserves: I think if the reserves were known, it would be much better. There would be more bids.
2. Very high reserves for top .com’s (not in a current economics and not for domainers)
3. Not to much participants in the live auction
4. And of course you need to shoot the guy (guys) who placed the Video Cam in the place it was during the Live Translation 🙂
Generally I liked the auction. Wasn’t on conference, watched it online. I think the results were not bad.
Just curious, how many domains were “pushed” to auction using the “pay for listing” scheme.
Nick
Hi Mike,
Thanks for the feedback. Your comments have more weight than all the opinions added together. Why? Because you actually used our system and found it worthwhile. You are our target. You were able to give reasons why it worked better.
Sorry folks, there will be no online bidding at TRAFFIC auctions. If you don’t have a phone, then I guess either you are in prison or you can’t afford the bill. We are taking the anonymous bidding out of the auction. You can still be anonymous to the audience of bidders, but you can’t be anonymous to US. You still have to pay US. You still have to send contracts to US. So phones work. They make sure you are a REAL person. Nobody in the room knew Mike Law was bidding. Including me. So I don’t understand the argument about being anonymous. Its a paper tiger. It means nothing. Just something for folks to crow about.
The majority of the ones so upset are the ones that would abuse the system to begin with. Bye bye. We are running a CLEAN auction and that supersedes the dollar volume. TRAFFIC is not dependent on the auction. It is just an add on for folks that want to participate or observe. It’s entertaining with loads of action.
We defined a new way to do CLEAN business. We don’t need sales to save face so we don’t have to invent sales. With each auction more folks will have more confidence.
There is an online auction every second of the day. TRAFFIC won’t be one of them. We do it different and in time we will attract the type domains I want at the prices that is either for domainers or end users. Maybe in the future we may require domains with end user prices to guarantee at least 2 bidders or their domain will not be in the auction.
Everyone can run their own auction the way they see fit. The TRAFFIC auction will be different and that is the way we see fit.
So thanks for the phone bidding info and your experience. That was the way we intended it to work and it sounds like you took advantage of it. Like you said, you felt like you were in the room.
All of the names in the auction should only be the best names, there are millions from which to choose. All of them should have low reserves in order to pique interest. They should be chosen long in advance and marketed heavily by seo, ppc, pr/m. The names and price reserves can be voted by professionals via crowdsourcing and only the top 10% selected for the actual heavily publicized (outside the industry) auction. Otherwise its always lame insider activity with bad names on average, only a small pct. selling, and bad reserve pricing, like every other auction.
I haven’t said anything about the state of the domain market, or the results of the auction, and I don’t need to re-read the post Mike. I’m just perplexed why you and others feel a ‘pay-to-list seller’, should also be blamed/derided for not bringing potential buyers/endusers to a ‘private’ auction (you had to pay to be there to bid), or getting them to sit by the phone at a specific time. This was not an every day/month Sedo/Afternic/Great Domains type of auction. This was being put on by specifically by a group/entity as an ‘event auction’ at a, as you note – a ‘premiere conference’. (hence my reference to such). So I don’t understand why those that ‘paid’ to have their names to be in this auction, should be considered at fault for not ‘promoting’ their names to end users etc. and their subsequent not selling results. If one puts their house for sale at a Sothbey’s home auction, are you also suggesting that it would be ‘their responsibility’ to bring potential bidders to that ‘premiere’ auction??
So as to your query – “Did you expect Rick, Howard and the TRAFFIC team to hit the phones and emails and try to get end users to the auction??” -Yes. ( No matter ‘who’ ran the auction.) And to do more-so than the domain listers/owners, as they are profiting from the results of such overall, conference and auction.
Perhaps, though, most of us are missing something here, and you can point out other auctions that have this same expectation.
@Rick – Thanks for the comment and I am glad to report the success I had with the phone bidding system.
@Mike – I agree with your ideas, would love to see you help organize an auction in the near future.
@Kevin – My comment: “That’s why I think it’s so wacky for people to say that the auction proved how the domain industry is weakening… get real.” was not directed at you. That kind of sentiment was shared by some (incl Owen Frager) and that is who I am disagreeing with. As far as your opinion (which I respect) it looks like we just have different ideas and expectations of the new TRAFFIC auction platform.
“So as to your query – “Did you expect Rick, Howard and the TRAFFIC team to hit the phones and emails and try to get end users to the auction??” -Yes. ( No matter ‘who’ ran the auction.) And to do more-so than the domain listers/owners, as they are profiting from the results of such overall, conference and auction.”
@Kevin….First off I just want to say that Howard’s comments came off as “Blame” but it was not meant that way. We all agree that the auctions of late just are not working and I articulated a huge list of those reasons. It is a joint effort. But when it comes down to domains that are not priced for OUR audience. which is a WHOLESALE audience as opposed to a RETAIL audience, then I have no problem putting it in the auction with the provision that those folks bring end users. I stated so in advance. On multiple occasions and have done so every opportunity I get.
We are not brokers. We are in the auction business for 2 or 3 hours. Our job is to advertise the auction and bring in qualified bidders to bid on attractive domain names at domainer prices.
Hope that helps to clarify. No blame, just requirements for a success and articulating OUR limitations.
Reserve prices on some of the domains were unrealistic, which clearly negatively effected the overall results. Let’s not forget that the economy is so bad, domain investors are getting picky on what names to buy. Online VS Offline Auction: TRAFFIC organizers are free to run it the way they like, it is their show and their decision to have it their way. I don’t think online fraudulent bids would have been an issue. Marketplace leader Sedo has been successful verifying “online” bidders and so has Flippa.
@ALL – Rick’s last comment made me think about how I used the words “BLAME” in my original post:
“Who is to blame for the ‘unfavorable’ auction results?
Here’s my thought on that question. The blame falls on the SELLERS…”
Instead of pointing fingers of blame I think it’s safe to come to the conclusion that auction organizers expected sellers to take responsibility of bringing end users to the auction while they provided the domainer audience (which was essentially built in via the conference). Did the sellers expect the auction organizers to market the auction inventory to end users (retail audience)? I don’t know, I don’t think we’ve heard from any of the sellers here.
So, I stick by my opinion that sellers should have done a little more homework, read and taken the ricksblog.com posts I pointed out more seriously. Marketed their names to end users. I think Rick too is shouldering some of the responsibility by acknowledging that there could have been more checks in place before allowing big names in the auction at end user pricing. I like the idea he mentioned above that perhaps in the next auction big names with end user pricing may require a minimum number of bidders before being accepted. And so it evolves, this is definitely a learning experience for all. I am sure the next TRAFFIC auction will very interesting!
Hi. We had six names in the T.R.A.F.F.I.C. Auction this year and were thrilled for the opportunity. We sold three out of six names submitted, granted they were all on the lower end of our scale. This I think can be chalked up to the well noted economy.
We did market our names in a variety of ways to who we hoped would be end users that would participate. I have to say that this was not an easy task. I don’t think that many companies are hip to digital marketing strategies as of yet. Of course, maybe some of the names that we chose for the auction weren’t appropriate for end users in the auction platform. Who knows.
What I do know is that there is no need for pointing fingers. The auction was exciting, fairly lucrative and definitely generated a buzz in the industry. My partner and I are pleased with the auction and our profit/expense ratio.