DROPIT Turns The Auction Concept On Its Head

https://www.pymnts.com/wp-content/uploads/2017/10/TopicTBD_BrendanHowell_10.20.mp3
Auctions often have the defect of being more fun in theory than they are in practice. Everyone likes the idea of bargaining and bidding their way to a great deal on an interesting antique or rare collectible, but most of the time, the actual experience can be less exciting than rewarding.

“Most auctions are boring,” Brendan Howell, COO at DROPIT, told Karen Webster in this week’s Topic TBD, citing four big reasons.

Every time a buyer bids, the price goes up, Howell noted — and it can be hard to tell if one is bidding against a real person or the auto-bidding bot of someone who’s on a golf course at that moment. Those dreams of excellent deals, he added, are often smashed by minimum prices that keep a high floor in place. When all is said and done, most of the action actually happens in the last three to five minutes.

And so, when founding DROPIT, Howell noted, the impetus was pretty clear: “Take all the boring bits away from the auction experience, and turn the auction concept on its head.”

For Howell and DROPIT, that meant lowering the price of an item for the length of the auction, until someone with the DROPIT app “swipes up” and wins the item at that price point.

He said that engagement “is off the charts” — and the more auctions they run, the more they observe that this is a style of commerce people really love.

Especially, he noted, when you give consumers the right context in which to participate.

One example of such context is a sporting venue, where Howell says that DROPIT auctions have found their major use case. Jumbotrons enhance the thrill and excitement of watching how low a price can go over the 60 seconds of each auction, driving even more people to want to get in on the action.

But Why Sporting Events?

That was Webster’s first question: In the quest to reinvent digital auctions, she wondered how they managed to connect their re-imagined auctions concept to sporting events.

“Interestingly,” Howell noted, “sports chose us.”

After developing and testing DROPIT as a tool for brand engagement in New Zealand, the founding team found themselves working with an accelerator in the U.S., where a fortuitous series of connections found the DROPIT concept introduced to the San Francisco 49ers. The football team was specifically interested in adapting it to live sporting events. DROPIT was happy to oblige, only to discover that “it works really, really well.”

“These auctions really do look pretty spectacular on the big boards. It really gets people’s hearts racing,” Howell said.

That level of engagement at a sporting event for something outside of the game itself — particularly advertising — has been something of a difficult puzzle for stadiums to solve, Howell told Webster. When there is a lull in the game, instead of watching an ad, people typically have their noses in their smartphones, or use the time to grab a hot dog and a beer.

“Once the commercials are on, the fans get up to get a hot dog, or to check Facebook, or really do anything but look at that board,” he said.

It’s become very easy for fans to indulge in such distractions, particularly as sporting venues have invested extensively in building an infrastructure of connectivity, Howell noted. This has introduced a double-edged sword, ensuring fan satisfaction while also providing a means of disengaging and connecting to things outside of the venue.

“DROPIT reconnects the fan with the video board by creating something immersive: a way to get people to engage with the brands auctioning their items,” Howell said, adding that it makes people feel like they want to engage with the messages, instead of feeling like they have to.

Plus, Howell told Webster, the opportunity to connect with fans in this way also provides the opportunity to learn more about them, and thus how to foster future connections.

What’s In It For The Brands?

In a word: knowledge.

Sporting events, he noted, are unique in that many of the attendees are one-offs, often seeing only a single game per season. Even season ticket holders only attend some fraction of the games. DROPIT is a way for the venue operators and the teams themselves to know who’s sitting in the seats. Sponsors then have access to data on who is engaging, how much, how fast — and what kinds of offers are connecting with the fans in that venue for that event.

Moreover, Howell pointed out, although every auction can only have one “winner,” all the consumers who “lost” don’t really lose at all.

During baseball spring training, DROPIT hosted one auction of a Mitsubishi Outlander, in which one lucky winner received one for about half the list price. But every other attendee who played along and didn’t win, got a push notification that offered them a $50 gift certificate for test-driving the Outlander at their local dealer. Howell said that dealers saw an uptick in test drives, and from there an uptick in sales.

“We tell sponsors to expect to make zero dollars on whatever it is they put up in the auction, because this is about promotion and engagement,” Howell said. It’s also about monetizing an item that they’d probably end up giving away in another situation as a promotion to build brand awareness. With DROPIT in a closed environment, such as a sports stadium, taking a 50 percent cut on an Outlander is about capturing 50 percent of an item they’d probably have otherwise given away, while keeping 31,000 seated fans totally focused on the vehicle for the duration of the 60-second auction.

And while Mitsubishi’s and Ducati’s DROPIT auctions tend to get the most attention, he noted, the model has worked for experiences that include packaging backyard BBQs with sports celebrities to raise money for charity.

At the end of the day, Howell said that DROPIT offers sports teams and brands a chance to create a rare form of advertising: “The best reason for [DROPIT] is that it’s legitimately fun.”