Tag : satiated-buyer

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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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The Most Important Mailing List (That Auctioneers Aren’t Using)

For years I’ve preached that the most important mailing list for an auction company to use is their list of past bidders. But I’ve been wrong—at least partially.

The line of thinking was that the most qualified prospects are those that are familiar with the auction process and have shown past interest in a specific asset category. Also, with Facebook’s Lookalike Audience tool, you could leverage the email address column of this in-house list to find tens of thousands of similar people just like your bidders (in any geographic region). For one of my clients, that Lookalike Audience technique has led to a noticeable increase in his average quantity of registered bidders.

Here’s the problem, though: if you do enough auctions, that list is going to become unwieldy—too large to efficiently send direct mail in the entirety. I’ve worked for a handful of auction companies who regularly mail 6,000 to 10,000 pieces to in-house lists; and I’ve consulted auction companies that mail tens of thousands of pieces per auction. I’ve regularly been asked how to sort a proprietary list down to the best candidates.

You can sort that by recent participation or number of auctions to which they’ve registered. If you specialize in personal property, you could also sort by expenditure levels. The problem is that there’s no way to tell—outside of maybe the art/collectibles or charity/benefit markets—if someone who bought something in the past wants to buy more of the same.

We can’t know who the satiated buyers are on our lists. If a past bidder was searching for a specific asset at a specific time, there’s a good chance they found what they wanted at the auction and/or somewhere else between then and now. This is especially true of lists I’ve seen auctioneers curate for a decade or more—something they not only often do but also advertise as a selling point. Because of this high probability of satiated buyers, our in-house lists have only a slight advantage, if any, over a purchased mailing list or Facebook’s Lookalike Audience tool.

There’s one direct mail list I would trust more than both a purchased list and a generic “past bidders” list. Other than time, it should cost nothing to capture. It’s a list of possibly the most motivated and qualified candidates for your next auction of a similar asset.

Your recent runner-up bidders.

I don’t think I’ve ever talked to an auction company that recorded that segment of their buyers. Online bidding platforms keep this information. These bidders shouldn’t be too hard to discover at on-site auctions, either—especially real estate ones. These folks are already in your clerking software. All it’d take to pull this data is an extra column in your database to indicate that they came in second.

This list will be relatively small in comparison to your whole list.

Maybe these prospects get a bigger postcard or brochure, while everyone else gets a cheaper teaser piece. Or maybe they’re the majority or entirety of your direct mail recipients, while everyone else gets emails and Lookalike Audience ads on Facebook (and now Instagram).

Facebook just announced last week that it’ll now be better able to match our mailing lists, as it opened up its tool to search by names and addresses—not just email addresses and cell numbers. Theoretically, that means we will be able to build Lookalike Audiences from smaller lists than those it currently needs. So, small lists of backup bidders might now be large enough to have their own Lookalike Audiences.

It’s a lot harder to unsubscribe from direct mail than email. So, even a list of people who’ve signed up for your mailing list could no longer be as full of interested parties as you think. If those prospects aren’t turning into bidders anyway, how much is that one-time indication of interest really worth?

Past bidders are a better guess than the general public, but those that left with money and without an asset are even better.

At the very least, it’s worth A/B testing your mailing lists to see which ones generate the most bidders and buyers. Best case scenario: this slice of your in-house database could free up a lot of marketing budget.

Stock image purchased from iStockPhoto.com

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