“Not Sold!” GoDaddy Signature Auctions Final Day Fizzles
Friday, November 9th, 2007
GoDaddy can learn from mistakes in its first Signature Auction.
When GoDaddy sent out a press release announcing the auction lineup for its first Signature Auctions, the headline boldly stated:
‘Sold!’ Go Daddy Offers Live Auction for Premium Domain Names
Perhaps it should have headlined “Not Sold!”. By my count, only 2 domains sold during the auction. This is despite GoDaddy changing the rules after the first day. It lowered the reserves on some domains. It also lowered starting bids but enacted hidden reserves. (During the first day, all domains opened at their reserves).
The third day saw few bids despite opening prices as little as 1/10th of the original prices.
Why such poor results? Here’s my take:
-First and foremost, the reserve prices on the domains were often times 2x-3x what the domains could be expected to sell for.
-The auction process wasn’t clear until about a week before the auction.
-You had to apply to bid in the auction. I understand doing this to keep the integrity of bidders, but many people weren’t approved to participate until a day or two before the auction (despite ‘applying’ about a week before). A number of people applied, but didn’t join in the fun when they saw the high reserve prices. Heck, I wrote about how GoDaddy had a good lineup of domains. But I wouldn’t have been so enthusiastic had I known the reserve prices.
-The auction was done through a “live” interface. If you wanted to bid, you had to wait through all of the auctions you didn’t want to bid on. Compare this to Sedo ’s Great Domains auctions, which run in parallel.
GoDaddy just hired DNForum’s Adam Dicker to run the TDNAM auction service. If Dicker ties this into DNForum, GoDaddy will see greater success in upcoming auctions.
[...] Godaddy is asking its customers to provide feedback on how the company can improve its Signature Auctions, after the first round saw pretty poor results. This request is one of the smartest moves I’ve seen from one of the big domain companies. Most companies would probably have tried to put a positive spin on the results, which may have made them look foolish. Because of their humble appeal, I will offer my advice to improve their next Signature Auction. 1.) Better Names at Reasonable ReservesGodaddy should do what it takes to ensure there are good quality domain names on auction with low/reasonable reserve prices. They should seek out domain owners and cut deals with them to guarantee certain prices will be achieved (lower commissions, sales price guarantees, bid on behalf of Godaddy’s internal portfolio…etc). The better the quality names at reasonable reserves, the more likely it is for buyers to show up and bid. Conversely, the more wealthy buyers that are present, the more likely it is for domain sellers to list their names at reasonable reserve prices.Sellers are reluctant to put their names on auction at a lower reserve because if there aren’t enough buyers, they’ve created an artificial price ceiling for their domain names. Hypothetically, a $500,000 name with a reserve price of just $100,000 might not sell if an interested buyer doesn’t show up. If that’s the case, the domain owner has created a price ceiling that isn’t realistic because it probably would have sold for $500,000 in a different venue.2.) More Publicity In the days leading up to the auction, there didn’t seem to be any publicity for the auction. It was almost like Godaddy wanted to have a soft opening, but when they chose that route, bidders didn’t show up (or if they did, they didn’t bid). Godaddy needs to publicize their next auction as much as possible. I suggest the following: - Purchase impressions in all the domain forums and domain blogs - Buy related Adwords - Email entire database of current customers - Ask Bob to blog about the auction to generate buzz - Issue press releases touting the high profile domain names - Give coupon credits to VIP customers3.) VIP InvitationsThere are quite a few people who are known for bidding aggressively at other live domain auctions. Senior Godaddy executives should go through their rolodexes and do what they need to make sure these bidders show up. Godaddy might even want to ask them what types of names they are looking to purchase, and they should make sure at least some of these types of names are on auction.— The better the auction results are, the more likely it will be that people will want their names listed in future auctions. The better the names in auction, the more likely it will be that buyers show up and bid. The second round will be much more successful than the inaugural attempt because Godaddy was smart enough to ask for advice from the domain community. [...]
I think there is no point having a reserve. Reserves are for indivdual sellers on ebay.
if its really worth something, bids will automatically reach that.
Vas - in a perfect world, yet. In fact, if I was guaranteed an auction crowd of all the big buyers and limited competition with other names, I’d eliminate reserves altogether.
But here’s the catch
-Many auctions, including GoDaddy’s have no guarantee of attracting these bidders
-Even if the bidders are there, a couple things happen. First, they get fatigue. Second, they usually had a soft budget for the auction. If they’ve bought $1M worth of domains before mine comes up, I’m not going to get top dollar.