“If you don’t stand for something you will fall for anything.” – Malcolm X
Every day, digital buyers participate in millions and millions of online auctions. Sometimes they do it manually, but oftentimes technology is an enabling part of the process that allows the willing allocation of marketing spend into the ecosystem. While auction types and the specifics of what are actually bought vary dramatically, there is a finite outcome to every single auction. There is a winner and there are losers. Sometimes it’s difficult to determine which is which. Sometimes winners overpay for the right to be present at that moment of consumer opportunity, while losers win by being spared the cost associated with that opportunity that may have never held the real value originally perceived.
In studying a wide array of auctions, what also becomes apparent is that there is a glut of would-be buyers who are simply not operating with a sound business strategy. Whether because of business size and lack of data, or emotional influence that dictates a buying strategy that supersedes sound business investment, there are too many companies guessing what the real worth of the auction should be. In each of these cases, what you ultimately find are buyers setting bids with uncertainty and, even worse, inconsistency.
In no place is this better represented than in social where even the most savvy brands are largely still trying to figure out what a fan, “like,” or retweet (to name a few) is worth. When you struggle to value the worth of something, you cannot help but struggle to determine what the precise bid should be when you enter an auction.
Take this hypothetical example that happens every single day, time and time again. Company A wants to be found online. They go to Google or Facebook (you pick the destination). They are uncertain of the worth of the activity, but a click would be great because they want sales and, in their mind, those come with higher position. Or (lucky for them) the site has projection models built in to tell them what they need to spend to achieve the kind of site position they think will deliver their desired return. So, they set a price and little happens. They don’t win a single auction. They win, however, but winning actually means a lower position and, therefore, they don’t get any clicks.
Then the real problems kick in. They start to alter their buying, moving up and down without rhyme or reason to test. They are “on tilt.” Brands are making investment bets without a plan created with rigor and, instead, are chasing a fleeting and changing notion of what might work. The problem with this for that company is they are subjecting themselves to an uncertainty that will only prove costly. They have now changed the dynamic for everyone else in the market. These dynamic changes can lead to increased costs for other companies, making the problem incrementally worse.
If you are a brand entering or establishing presence in a newer auction marketplace, it’s essential that you stand for something. Even if that something proves, with more data, to be wrong, it’s mandatory that you take a stand and stick with it as your buying progresses. Evolution is a must, but when thinking about your investment make sure you allow for the right time and volume to test your position. Take steps, not leaps, to alter your approach and, most of all, collect data at every turn. They say there is no substitute for experience. Data represents a financially earned experience that brands must value accordingly.