Some more recent reverse auction stories that popped into my Google Reader:
Bid4Spots allows the media buyers (that’s us) to set a maximum bid and allow stations to bid ever-lower media prices. After all, the stations are selling next week’s leftover airtime.
The real power of Bid4Spots is the steadily lessening of price rather than the gradual increase. In a Bear economy, when most businesses are cutting their media spend, there exists a real opportunity for small and medium-sized businesses to get a lot of airtime for their money.
City of Waco uses a reverse auction to buy electricity. There seems to be a lot of interest in running reverse auctions for electricity these days. A quote:
“We’ve been wanting to try a reverse auction for some time, as we believed the process could significantly benefit the City and, ultimately, our taxpayers,” said Danny Jackson, Administrative Engineer, City of Waco. “I can’t say enough about how great World Energy’s people were throughout the process. The market directors were extremely knowledgeable about the industry and helped us make key decisions regarding structuring the auctions to ensure we had significant supplier participation. We were particularly pleased that World Energy was able to drum up supplier interest for the auction, even though we used our own paper for awarding the contract.”
2 points on this:
- The Bid4Spots story is spot on in linking an upswing in reverse auction interest to the current downwards trajectory in the economy. This is what happened last time round in 2002.
- The Waco story is spot on in highlighting the importance of market making support in running a successful auction. It’s no good these days for software companies to sell only software and/or software integration/implementation services. These days successful technology delivery revolves around what What Max Bleyleben (Disclosure: he works for Kennet, an investor in TradingPartners) calls software/services/content convergence.