Tag : analytics

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198: Will Facebook’s Big Algorithm Change Hurt Your Auction Business?

I don’t know if you’ve seen this, too; but a number of my professional peers have expressed worry about the pending major changes in Facebook advertising. I’m not worried, and I’d like to help assuage any fears you might have.

A couple weeks ago, Mark Zuckerberg announced that Facebook will be changing their Newsfeed algorithm to emphasize “meaningful” content from your Facebook friends at the expense of publisher content. Whether or not the inventory of paid advertising will be reduced, what will definitely be on the chopping block is organic business reach—“free advertising” to the people who like your Facebook page.

Unfortunately, many entrepreneurs have grown entitled to free advertising. I’ve seen auctioneers complain that they shouldn’t have to pay to market their services or products on Facebook. Facebook is a business, though. Somebody needs to pay for all those coders and servers.

Zuckerberg’s initiative is just a continuation of a trend. Organic reach has been gradually dropping for years. For most business pages, unpaid reach has dropped below 50%—and in many cases below 25%—of the people who at one point liked those pages. Facebook has been testing zero organic reach in six foreign countries. It’s reasonable to assume that we’re months—not years—from zero or near-zero organic reach here in the States.

This isn’t just a money grab, though. Two other factors are at play here. First, Facebook has just about reached full saturation in the United States; and they’re seeing many users leave the platform. (I have a Chrome extension that shows me when my Facebook friends close their account, and I’ve had several friends shutter their profile just while I’ve been working on this blog post.) The algorithm didn’t serve these deserters content compelling enough for them to stay. That’s one of the reasons Zuckerberg wants to make Facebook content more “valuable.”

Second, the proliferation of fake news has brought public pressure on Facebook to remedy the problem. Whatever the motivations of foreign actors have been in giving Americans fictional, divisive content, they are sustained in part by the ad revenue generated from all that frothing traffic. One way to discourage their malignant content is to make them pay for it to be seen.

Even if zero organic reach becomes reality, there’s no reason to panic. Facebook marketing isn’t going away; they want to keep the lights on as much as we advertisers want access to Facebook’s users and its data on them. It might not even grow much more expensive, if you know how to use the platform.

How good is your content?

Facebook will continue to reward advertisers whose content achieves user interactions. That’s in both your best interest and theirs. The less annoying content there is in the Newsfeed, the more likely people are to stay. The more likely users are to stay and the longer they use the platform, the more advertising slots become available. So, if your content is compelling, the algorithm notices the uptake. If you know how to appeal to buyer needs and motivations, you’ll see less impact than your competition, who’s still pushing digital sale bills and their equivalents.

How is your marketing optimized?

Even organic posts aren’t optimized by Facebook to get people to your website. Neither are boosted or promoted posts. The stated objective of all of those options is to get you more likes, comments, and shares on Facebook; and Facebook’s algorithm serves your posts to people most likely to take those actions. That means people who don’t want to leave Facebook. In contrast, Facebook optimizes sponsored ads to actually leave their platform and go to your website. We don’t make money until people leave Facebook. So, in most cases, a sponsored ad—which isn’t going away—is your best bet, anyway.

Is your organic audience even your best audience?

The most efficient advertising is rarely to people who at one point liked your page. Are those folks your most likely buyers? The assumption by many is yes, but the reality in many situations is no. They may have hit like after seeing an event or asset or announcement that interested them. They may have bought what they wanted and satiated their need for further like-kind assets. They may have liked your page when you had an event in their area but not be interested in events in other geographic markets. They might have been friends of sellers. They might even have been people who clicked the like button on accident. So, why fight for free advertising to the wrong people?

Are you tracking bidder acquisition costs?

Finally, what happens if your Facebook actually does double or even triple in cost? It will still probably be your most or second-most efficient medium for getting bidders to your website. What’s your cost per website visitor from newsprint, signs, or direct mail? Are you even tracking that? How confident are you that your relatively-cheap email list contains the best prospects for what you’re selling? What’s your next best advertising medium when you book an asset outside your wheelhouse or an event outside your normal geographic market? Facebook will continue to be a valuable tool—if not the most valuable—in your toolbox.

If you were a publisher like Buzz Feed or Fox News, you should be worried by the loss of free distribution. A savvy marketer like you, though, has no reason to lose any sleep over Facebook’s pending changes.

Stock image purchased from iStockPhoto.com

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182: How to Know What Your Auction Advertising Budget Should Be

Click on any of the illustrations below to enlarge them.

If you read business news, you run into the term “big data” on a regular basis. I used to associate it with corporations mining our transactional histories to extract scary quantities of data for creepily-predictive advertising.

After teaching part of the Auction Marketing Management course for a couple years, though, I get inspired to help small businesses use the same processes with the information they already have.

Auction companies, in particular, have some incredible, free knowledge. With a few minutes’ worth of work, that knowledge can become predictive power; and that power can help you convince more and better sellers that you are their best option. It just takes asking a few questions and recording those answers.

How many buyers did you have in your latest auction?

Number of Bidders

Along with that, how many bidders did you have in that auction?

Number of Buyers

Divide the number of bidders by the number of buyers. This will tell you how many bidders you needed to get to each buyer.

Bidders Per Buyer

Divide this number by the number of lots in your auction. This will tell you the average of how many lots per buyer you needed to get everything sold.

Lots Per Buyer

How much did you spend in advertising on this auction?

Advertising Cost

Divide this number by the number of bidders at the auction. This will tell you the average cost per bidder.

Cost Per Bidder

Of course, it’s easy to then compute your average cost per buyer.

Cost Per Bidder

How many unique visitors did this auction’s page on your website generate?

Web Uniques

Divide this number by the number of bidders. This will tell you how many unique visitors to your website it takes to get a bidder.

Uniques Per Bidder

A quick formula will compute how many website visitors it takes to get a buyer, too.

Uniques Per Buyer

If you’re curious, you can divide your advertising expense by the number of unique visitors to see what your cost per website visitor was.

Cost Per Unique

Now, keep track of these fields for every auction this year. (It should take only five or ten minutes per auction to fill in the blanks.) To make it more accurate for predictive value, I would keep separate spreadsheets for each asset category. If you operate in multiple states, you might find value in an extra column for that notation, too.

Maybe at the end of the year, all you’ll have is something to pique your curiosity. There’s a decent chance, though, that you’ll have actionable data from seeing patterns.

Like one of my friends, you might be able to tell the auction manager approximately how many bidders to expect based on your Google Analytics numbers the morning an auction closes. Or you’ll be able to tell that the bidder registrations were an anomaly. If there’s post-auction seller discussions, you can show them their results versus your typical results.

When a potential seller asks why you picked the budget figure you did, you can explain, “For the asset type or the number of lots you have, we’ll need to get roughly [x] number of buyers. To get that many buyers, we’ll need to attract about [x] number of bidders, which cost us on average $[x] each.”

If you don’t think that would be valuable information, skip these questions and recommendations. If you think there’s merit to them, I can send you the formula-driven Excel sheet I used to create the illustration above. Just click here to email me, and I’ll send you a free copy.

Stock photo purchased from iStockPhoto.com

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176: A New Tool to Learn More About Your Offline Bidders

Facebook recently launched a new tool called Offline Events that auctioneers can use to gain insight on their offline bidders.

Business Manager Mini-menuHow it works

When you create an ad on Facebook through Business Manager, you now have the option to tie the ad to a specific offline event (an auction in our case). After the auction, you can upload a list of auction attendees to Facebook’s database; and it will match as many of its users as possible and tell you how many of the attendees saw one of your Facebook ads.

You can categorize the list as Purchase (buyers), Lead (bidders), and Other (attendees). In fact, Facebook requires you to pick one of those fields per list. For most auctioneers, it will be easiest to just upload all registered bidders; but it’s good to know you can get further analytics, if you want them.

Facebook will not give you the names or further information about the Facebook users it matches. It only aggregates the data for comparison. Also, it will match only as many as it can with the data you collect. The match rate will vary depending on how much contact information you gather.

Why it’s useful

While it might not be able to match every registered bidder whose information you collect, the good news is that it will never over-report. If someone saw advertising in another medium as well as on Facebook, this information can supplement current auction polling with real data. This tool is especially useful for those who don’t have proprietary online bidding platforms for which the Facebook Pixel can do all of this (after initial setup).

While I’ve not yet got to play around with this tool, its potential is exciting—especially for auctioneers who issue post-auction reports to sellers. The more data point you can use to validate your marketing strategy, the better.

Offline Events Overview

Who it benefits most

This will especially benefit those who sell the same asset categories over and over again and/or those who sell multiple asset categories but in the same geographic area all the time. It will be easier to find trends in this data, if you have bigger bidder pools (typically personal property and commercial equipment) or many auctions per year.

If you’d like to experiment with this tool, you can get a free, quick tutorial here.

Stock image purchased from iStockPhoto.com

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144: Relearning How to Fish for Auction Buyers (and Sellers)

H-E-B is the largest privately-held grocery chain in the United States. Last year, Forbes ranked the company as the fifteenth largest privately held company of any kind in America. If you talk to someone who has emigrated from Texas, H-E-B is one of the things they miss most about the Lone Star State.

I spent some time with a former vice president of the company, while he was working as a consultant where I live. On a weekend road trip with him, he told me about his unique and impressive career path and what he learned from his time at the company. (He has since moved onto Fortune 500 consulting, media ownership, and other successful entrepreneurial ventures.)

One of the things he attributes to H-E-B’s growth and success was how it decided what to put on the shelves and where. Apparently, the grocery industry used to include a lot of supplier lobbying. Food companies would wine, dine, and all but bribe grocery chains to put their items on the shelves, especially on end caps and other prominent positions. Early into the barcode era, H-E-B started tracking what customers actually purchased. They learned what varieties and brands sold more than others, what size packaging outperformed other configurations, and what price points created the most transactions.

Then, they adjusted their store layouts and product lineups accordingly.

Store and chain managers may not have enjoyed the same gifts and junkets, but they soon benefitted from higher sales volumes. Joe said a little store named Walmart adhered early to the same track-and-adjust strategy. It seems to have worked out well for them, too.

I would imagine that sales analytics are standard practice now for major retailers—and far more comprehensive than what H-E-B and Walmart first used. They got to those trends early, if not first; and it has led to market share domination.

The auction industry is at a similar place as the grocery industry was in the 1980’s. Most auction companies keep marketing the way they have for decades, just with more media expenditures. As a graphic designer, I like it, because it means more work for me. As a consultant, it scares me, because there’s only so much I can help a company without analytical data.

Relatively few auction companies are leveraging the tools available for actionable data. Not even the free tools, let alone the $10-per-year ones. I know this because I ask. As the industry evolves and transitions online, we have the potential for even more data points that will offer even better strategic intelligence.

Like a 1980’s food supplier, I currently benefit in the short term from my clients’ ignorance. It frees me from adapting, from changing my skill sets and value propositions. If I want to sell more volume with more longevity, though, I’ll need to adapt to my clients’ customer’s patterns.

Here’s the rub: I can’t get that knowledge for them, and I can’t get it without them. That’s why I’m educating myself with instructional videos, online seminars, and offline courses like the Auction Marketing Management curriculum. I’m hoping that soon I’ll be able to teach my clients how to fish, even if that might mean fewer fish heading my way.

In the current marketplace, there’s no excuse for relying on instinct. Our marketing mix should include more experimentation but less guesswork. Our customers on the aggregate are telling us how and where and when to advertise and conduct transactions. The buying public is always right, whether we like it or not; and they’re generating the data to prove it.

American statistician and author, W. Edward Demings, said it best: “In God we trust. All others must bring data.”

 Image from this source.

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136: 5 Things Missing From Most Auction Proposals

I hate taking auctioneer’s misdirected money. I typically don’t up-sell. In fact, my clients will tell you that I often advise against extraneous media. That said, I regularly accept paychecks to build ineffective proposals. It’s true. Sure, they will represent aesthetic upgrades from their old materials; but the final product doesn’t always have my confidence that it will help them secure new sales.

I say that, because many of the proposals I’ve seen in the auction industry wouldn’t work on me, if I were the seller. They are missing a lot of (proprietary) content that I as a vendor cannot include, let alone illustrate. It’s sad, too, because my future income is dependent on those pitches—since that signed auction would mean a campaign full of media for me to design.

So, here’s the content that I rarely see in auction proposals that would give me more hope that we could book the proposed auctions.

Market Analysis

What are the forces in the asset and geographic markets that will affect demand for what is being sold? My REALTOR® could show me how many like-kind properties were in the market at the moment and how many sold from that segment last year. Why can’t auctioneers? Sellers of all types of assets want an idea of how current market conditions will affect estimated sale price.

Comparable Sales

Again, I don’t understand why this is so easy for REALTORS® to demonstrate but so difficult for auctioneers. It’s not just real estate, either. From what I understand from talking to appraisers, some decent homework should be able to provide recent sale prices for similar personal property items—not all the time and for all the items but most of the time for the headline items being sold. If there isn’t a comparable sale, an explanation of why that is the case would be helpful information for the seller.

Property Analysis

What are the strengths and weaknesses of the asset or group of assets? What repair or upgrade work would add more value than its cost? What specific marketing choices & efforts will be made because of the asset’s attributes?

Advertising Analytics

If the reasons for your marketing suggestions are based on anecdotal information, you could be losing the deal to a competitor that tracks their advertising. They know what works best and most efficiently. They know how to market on the lowest possible budget. They can also prove the necessity of larger budgets—because they have data on bidder acquisition costs. They might even have that broken down by asset type and geography. If you have this data, use it. Show it; don’t tell it. If you don’t have this information, start collecting it.

Recommendations from Similar Clients

Auctioneers do like to grab stuffy recommendation letters from some huge name, but I’m still waiting to see testimonials from like-kind-asset sellers. If it were my proposal, I’d have recommendations that pertained to different aspects of the proposal sprinkled into their respective pages as big, magazine-style pull quotes. Or, if possible, I’d have that recommending quote under a picture of the sellers and a “SOLD!” sign. People want to hear from other people who’ve been in their situation.

It’s funny to me how many proposals I’ve read promise something along the lines of “We’ll do our best to sell your asset for the highest sale price,” when the auction company hasn’t done its best to sell their solutions.

Most auction proposals include a lot of content about the auction method—instead of data that proves its superiority. They promise fair market value but don’t illustrate proof of it. I can often find sections on company history, staff biographies, auctioneer designations, and even unsupported claims at market share. Those are for LinkedIn profiles, not seller presentations.

Just like marriage proposals, the most effective auction proposals have a higher percentage of content about the recipient’s attributes than the kneeler’s resumé. The less time we spend talking about us, the better. Our sellers need to know we’re the best option for their situation—not necessarily because of what we’ve accomplished in the past but because of how well our recent experience enables us to map the next few steps into the future. Sellers are looking for confidence that we can do that—trust built from the five things missing in most auction proposals.

Stock image purchased from iStockPhoto.com

116: Where Are Our Marketing Jet Packs?

Photo purchased form iStockPhoto.comOn March 6 at 8:36pm, one of my auctioneer friends posted on Facebook, “Anyone got anything new to share? Any new marketing ideas this week? Any good success to share? What’s working, what’s not?”

Two of his words grabbed my attention: “this week.”

In the age of Moore’s law, there’s this belief by marketers that eventually we’ll find some advertising silver bullet, that some new media will make all others obsolete. In a competitive marketplace, the hungry and aggressive are hoping to find it first—to dominate it after early adoption.

Someone’s got to tell all of the companies sending me email that social media replaced it in 2008. I guess it’s good that email hasn’t been replaced because, twenty years into it, we’re all still waiting for it to make direct mail obsolete. Eighty years into TV, commercial radio is still selling hours of advertising a day—despite it’s other heralded replacements (satellite radio, streaming services, and MP3’s) offering commercial-free music. Sure, we have fewer newspapers; but we actually have more specialty magazines.

Jetson Food MachineWe don’t have the Jetsons’ food machine yet, and we definitely don’t have our own jet packs. What we do have is an evolving media landscape that keeps adding more ways to do the same thing. Whether you’re using Google AdWords or outdoor signage, the marketing strategy is the same:

  1. Determine the people who might want what you’re selling.
  2. Go to where they are—their preferred media and/or geographic locations.
  3. Show them what they want to see—first and only (not what you want to show).
  4. Tell them how to get what they want.
  5. Analyze the results and interactions to tweak for next time.

Let me drill down one more layer to the auction community for which I’ve worked the past 14 years. After developing more than 15 hours of seminars, I’m annually asked to write and design new ones on new topics. For the last couple of years, I’ve debated turning that request down; but those seminars are the primary way that I introduce potential clients to my value as a vendor.

Candidly, I don’t think there’s a lot more out there that I’m comfortable teaching. With hundreds of auctioneers ignoring what I’ve taught in the past, I wonder what’s the point of creating more content to be ignored. I’m not talking about artistic, subjective suggestions; I’m talking about hard and fast rules to guide advertising, regardless of industry.

As an industry, we struggle to get the basics right.

To the public, we’re still selling events instead of assets. To sellers, we’re still selling auctions instead of marketing; and we’re talking about our method rather than our asset analysis and customized plan. (I know, because I read the proposals.) We are still crowding advertising with tertiary or redundant information that should wait online. We don’t put information in order of audience needs or wants. Readability looks like an afterthought. We’re still treating social media like broadcast outlets instead of conversation environments. We don’t segment our in-house mailing lists by asset category—let alone spend levels or time since last bid registration. We’re still not recording polling data from every auction to determine which media worked best for us in each asset and geographic market. We still don’t understand that the best branding is more consistent than it is creative—and that our brand is more than our colors or logo.

I say “we,” because I’m preaching to myself, the choir, and whoever’s still in the pews this far into this post.

I don’t know a lot of people—me included—who are ready for the next thing, because we’re not doing the things we should already know. “This week” or any week.
[tip]

As a preacher’s son who attended four church services a week and then a Bible college that required an average of 12 Bible-teaching environments (and four prayer circles) per week, I’ve heard my fair share of Bible verses and applications. I know a lot of Jesus’ instructions, and I still disobey them somewhere between hourly and daily. From what I hear, that’s not exclusive to me.

So, it’s interesting to me that so many of us, me included, “want to hear something fresh from God.” I like what my pastors say about this: “Why would God give us new instructions, when we aren’t saying ‘Yes’ to the ones he already gave us?”

That doesn’t mean that we withdraw ourselves from teaching or that we stop trying to grow in new environments. It just means that we can’t always expect to get our dessert before we finish our vegetables.

[footer]Photo purchased form iStockPhoto.com[/footer]

109: When Is An Audience Too Big?

F150 AdThis coming Sunday, corporations will be spending roughly $4 million for each 30 seconds of advertising they obtain.  Even at these rates, available commercial slots for 2014’s big football game sold out in 2013.  It’s the most watched TV show in North America every year with an expected audience of 108,000,000 consumers.

If you’re doing the math at home, that’s 3.7¢ that advertisers spent per potential viewer.  Most media won’t break it down for you like that—instead going with cost per mil (CPM), which means cost per thousand viewers.  In this case, that’s $37.04.

Whenever I see expensive ads like these, I wonder three things:

(1) How many times someone has to see this ad before they decide to purchase?
(2) How many units does the advertiser need to sell just to break even on this commercial?
(3) How much of that product’s average price go to just this commercial?

Take, for instance, the Ford F150.  Ford sold 763,402 F150’s in 2013—the most of any vehicle sold in the US by far. If Ford Motor Company purchased only one 30-second Super Bowl spot and if this were the only ad that they ran all year, every truck’s price would include $5.24 for just this ad.  Based on the number of TV and magazine ads for the F series that I see in my limited broadcast media interaction every year, I wouldn’t be surprised if owners of new F150’s are paying for more than $1,000 in advertising.

Whatever the number is, Ford & Chevy, Verizon & AT&T, and Budweiser & Coors have found it reasonable, if not necessary, to spend so much on mass marketing.  For my clientele, too, a CPM of $37.04 would seem a good deal for their small business marketing, especially their event marketing.

That $37.04 can be deceiving, if not expensive, though.

Half a decade ago, one of my former clients—no longer in business—asked me to advertise a New Jersey construction equipment auction in the Philadelphia Enquirer and the New York Times.  I asked him, “How many people looking for an excavator look in the Sunday classifieds of a metro paper?”  If every one of the combined 2,342,631 subscribers of those papers on Sunday happened to turn to that ad’s page and also perused until they found that tiny ad—still probably only a fraction of 1% of the audience would care about its content.  And that’s the best-case scenario.

For the same amount of advertising spend, he could’ve bought sizable ads in construction equipment publications and on related websites—where the percentage of audience being qualified prospects would be exponentially higher.  Or he could’ve spent less overall for more conservative advertisements across all of the targeted media.  Sure, the CPM would’ve been significantly higher; but the value would be exponentially higher.

Be careful when an ad agency tries to sell you national ads for a campaign that only needs local/regional media or regional/national asset media.  Most ad agencies in the States make a commission—usually around 15%—back from the media for the advertising you buy.  Commissioned sales reps from both agencies and media alike will sell you on audience size (sometimes called “total reach”); but look, instead, at percentage of likely buyers from that audience.

Instead of CPM, I recommend evaluating media use based on cost per qualified prospect (CPQP).  It’s better to pay a lot to reach people who are likely to pay you a lot.

One of my auctioneer friend’s campaign came at a cost of roughly $65 CPQP, but he only mailed to between 75 and 80 people.  From that very small audience, though, he made over $100,000 in one year. That’s an average of almost $1,300 in revenue per prospect.  Not per sale.  Per prospect.  That’s a number that no Super Bowl advertiser can match and that no ad agency can promise.  While this might be on the high end of expectations, the principle it illustrates holds true.

On a related note, I recommend polling your bidders per media outlay to determine what your cost per bidder is from each. Tim Narhi Auctioneer & Associates do a great job of this and can show a seller what they spent per bidder per media for several years’ worth of auction advertising—including almost any one specific auction.  Those numbers trump any statistic an agency or media rep will tout.

The feather-in-your cap ads like those in the Broncos/Seahawks game might appeal to your ego, but targeted marketing will make that net proceeds check appeal to your wallet.
[tip]

We live in a big world, and the religious affiliation of that population is quite diverse—so much so that I don’t know that any one faith system (or lack thereof) includes a majority of the global population.  For those of us who think the eternal stakes of believing an errant way are high, the temptation is to evangelize to the largest audiences possible.

God uses crusades and impersonal pamphlets.  I’ve met people whose life trajectory has changed from them.  He might even use television and radio programs, in spite of the characters that populate most of them.

From my own experience, though, I’ve seen the most efficient sharing to come on an interpersonal level.  Conversations in a coffee shop, book clubs in a cafe, table talk at a church environment.  Life change happens deepest when lives are rubbing against changed lives—when someone can say what the Apostle Paul did, “Follow me, as I follow Christ.”

[footer]Stock photo purchased from iStockPhoto.com.
F150 image screen captured from online commercial.
Volkswagen ad frame downloaded from Google Images.[/footer]

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