Analysis: How long should I run my auction?
MobilBid Analysis: How Long Should an Auction Run?
With over 1,800 auctions under our belt, Mobilbid has a large amount of data, and a good understanding of how auctions work. One of the most common questions we get from clients planning an auction is “How long should I let it run?” The answer is “it depends”, so here is our review of the subject.
The first issue is the type of auction being run. We characterize them as:
- An in-person event, at a physical venue
- A virtual auction, held only online
- A hybrid auction, opened as a virtual auction leading up to an in-person event
In Person Auctions:
An in-person event usually has a specific start and finish time, so the auction generally will begin and end within that time frame. The length of time is established by the organizer to fit in with other activities, and needs to wind up so guests can pay, pick up their winnings and head home. Under these circumstances auctions tend to be open for 3-4 hours, an ideal length.
Virtual Auctions:
Auctions that are only held virtually see three general patterns:
Predominantly Early Bidding: This is where the auction generates many bids near the start of the auction. The amount raised climbs quickly, reaches a plateau, and has a small final bump as the auction comes to an end. This usually happens when a large known community is informed of the auction and has access to it right from the start. Depending on the quality and number of items, the starting bid values and the known retail value of items, many guests will jump in and bid early. The plateau usually comes about as bidding amounts on individual items approach their retail value. We see this where there are large numbers of small value items, such as gift cards. If the entire community has access early on, and there are no new guests being on-boarded throughout the auction, having a long auction (e.g. longer than 3-4 days) is not an advantage, a shorter auction will keep the audience engaged. This pattern is seen in approximately 25% of auctions.
Predominantly Late Bidding: This is where the auction generates few bids early on, but there is a flurry in the last hours and minutes of the auction. This may happen when there is not a core community of guests to start with, but individuals on-board throughout the auction as promotion and advertising efforts take effect. Having items that have no clear retail value, but are desirable as an experience, or special meaning, tend to elicit late bidding. There is an advantage to having a longer auction under these circumstances, but beyond a week we see little additional advantage. This pattern is seen in approximately 15% of auctions.
Typical Bidding: We would characterize 60% of auctions as having an initial surge of bids, followed by a plateau where not much happens, with a final spike near the end of the auction. There is a mix of when the community comes on-board and the types of auction items. Given the plateau in the middle of the auction, most auctions seem to be run for a longer period than necessary, and shortening them would have no impact on funds raised. Our recommendation would be for most auctions to run no more than 4-5 days.
Hybrid Auctions:
A hybrid auction has many of the same characteristics as a virtual auction, but it is very unusual to see predominantly early bidding. It tends to skew towards typical or late bidding. The exception is if the auction is opened to a much wider audience (e.g. 10 times the number expected in-person) than those attending the event. A larger community will generally bring more bids and lift the total funds raised, and one may see increased bidding throughout the time the auction is open for bids.
Summary:
There is no real downside to running an auction for an extended period, but our experience is that there is little upside in most cases. Running a shorter virtual auction will get you the same results, and supply the funds sooner, than running a longer auction. The only exception is when you have no established audience, but have an extensive advertising and marketing campaign over a period of time to grab the attention of a community.
Our rule of thumb is that an auction need not run longer than 4-5 days.