Wednesday, July 22, 2009

"Our food is dreadful, so there's never a line!"

I've never seen an restaurant advertising that way and don't expect to. BidRodeo is now running Google ad saying that they're less popular than their competitors.

It isn't completely absurd. In any auction, the fewer the bidders, the better the deal, and you can't blame BidRodeo for making a virtue of necessity. But consider:
  • First, most people who participate in auctions don't realize that they're better off with fewer competitors. Seriously. They seem to think that the presence of a lot of other bidders just means the auction must be a really good idea. The technical term used by behavioral researcher for the victims of this crippling cognitive deficit is "stupid". Lot of people are stupid. (The foregoing does not apply, of course, to readers of this blog, who are not only clever and perceptive, but also very good-looking and charming.)
  • People who are sharp enough to understand that less competition leads to lower auction prices are probably also sharp enough to understand it doesn't matter how busy the site is, just how popular the specific auction is. They also understand that if BidRodeo isn't popular, there might be a very good reason, and they'll go to a popular site that also has lots of auctions, some of which are likely to therefore be sparsely attended.
  • And what is BidRodeo's long term plan here? Their "visit BidRodeo because no one else is" strategy will either fail, and they'll go out of business, or it will succeed and lots of people will visit BidRodeo and then ... what? They'll change their ads to read "remember how we said you shouldn't go to busy auction sites? Well, forget that, come to our site!" ?
  • Finally, what is BidRodeo telling its investors? That low site traffic was the plan? That it's a key business strategy?

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