HSMAI Marketing Review August 2009 - 21

with high discretionary incomes. There are three constituencies in the charity auction ecosystem; 1. The charity 2. The consumer 3. The item donors, of whom 80 percent are commercial entities. Unfortunately, in the manner in which the current ecosystem functions—silent and live auctions—it is the item donors who get the raw end of the bargain. The charities raise money for worthy causes (good). Consumers get to bid on great items to support their favorite causes, often getting a bit of a bargain in the process (good). However, it is the item donors that get virtually no measureable benefit (bad), and as a result, their participation in what is ironically a marketing rich environment is sub-optimized to the detriment of all. In today’s economy, marketing-rich environments are scarce and this is a missed opportunity. write up a brief description of the item with little focus on providing the donor organization optimized brand treatment. Worse, many charities will set an artificially low opening bid which is not in the best interest of the brand. Many auction committees will bundle the item with another item and often give the other item top billing. Brand treatment will likely be limited to a short single sentence (sometimes inaccurate) with no image or brand logo on a clipboard. Given the attractiveness of the demographic, optimized brand treatment is unfortunately a missed opportunity. PROBLEM # 3 MEASURING AND DELIVERING MARKETING VALUE The single biggest challenge facing item donors is that the marketer gets no marketing value for giving up an item, and as outlined above, the auction can actually be damaging to the brand’s image. Item donors donate into a virtual black hole of information. They receive no data or marketing intelligence. For the exhausted auction underlying marketing potential there is little marketing value in this transaction for the item donor. The Opportunity The irony here is that there is enormous underlying marketing potential— charity auctions uniquely reach a highly desirable demographic with strong spending power. Charity auction participants are typically Baby Boomers with an average household income of over $100,000, many over $200,000. In essence, there is a lot of discretionary spending power— exactly the type of consumers marketers are dying to reach. Moreover, these charities have highly trusted brands, and in today’s environment trust is scarce and at a premium. These auctions reach consumers though their trusted causes generating good will and loyalty. And lastly, they connect with them when their wallets are wide open. Reaching this attractive demographic through a charity–based venue while they are spending completes a marketing trifecta. The issue is that the auction committee is focused on raising money—not on extracting and delivering the underlying marketing value back to item donors. Nor should they—their mission is to raise money for the charity. Moreover, many of these individuals are volunteers who have little, if any, formal training in marketing. They just don’t think this way. And when the event is over these folks are exhausted and anxious to hand off the baton. The last thing they are thinking about is reporting back marketing results. Live Auctions PROBLEM #1 FIELDING REQUESTS Participating marketers such as hotels, restaurants, spas, entertainment venues, sports teams, etc. get bombarded with requests to donate a free item (or two) to a given school or charity auction. Letters, calls, and faxes come streaming in requesting an item donation, often with insufficient information. These incomplete requests that lack key information can interrupt valuable staff time processing the requests. Moreover, few organizations have the means or bandwidth to track and manage all item donation requests over time to identify patterns and opportunities in which to streamline this process. Lastly, the organization grants a certain number of item requests and has to individually mail out the item to each organization. PROBLEM #2 BRAND PRESENTATION When an item donation is received, it is usually a volunteer committee that will AUGUST 2009 • HSMAI MARKETING REVIEW Performance-based Marketing The catch-phrase this year is performance based marketing. Performance based marketing programs deliver a meaningful and tangible marketing ROI complete with customers, revenue, and measureable brand marketing benefits while increasing staff productivity—all at virtually zero downside risk. committee (likely to have quickly handed off the baton to the following year’s volunteers) the last thing on their minds is giving a special offer to losing bidders or reporting back marketing results to the item donor, assuming they had even tracked results. The marketer will in all likelihood not hear back from the school/charity for ten months….when they will be back for another item. In essence, despite the significant The Solution ONLINE CHARITY AUCTIONS When charity auctions go online lots of good things start to happen for marketers starting with measurability. The Internet makes marketing measureable. It is easy to determine how many consumers clicked on an item page and how long they stayed; how many bidders there were in the auction; who the losing bidders were; where they are from geographically; as well as losing bidder email 21

HSMAI Marketing Review August 2009

Table of Contents for the Digital Edition of HSMAI Marketing Review August 2009