$46.8B Record U.S. agency revenue in 2015
When online real estate marketplace Auction.com announced a $50 million dollar funding round from Google Capital last week, the company made another announcement that flew under the radar: the naming of David Thompson as chief marketing officer. Mr. Thompson is replacing Megan Hanley, who left the company over a year ago.
The cash should give Mr. Thompson, a veteran of WebEx and co-founder of early marketing automation platform Leadrocket, an opportunity to get creative. And he'll need it: Mr. Thompson is tasked with marketing to the company's b-to-b clients -- 80 to 90% of the business, he said -- and its b-to-c customer base, which Auction.com is determined to grow.
Overall, more than 35,000 sales occurred on Auction.com in 2013, totaling over $7 billion in gross sales. The company does not disclose its total take on a sale, but it charges buyers a 5% transaction fee on average, according to Mr. Thompson.
In an interview with Ad Age, Mr. Thompson said the funding from Google Capital will go towards upgrading the company's product and data center infrastructure, shipping "a bunch of new mobile products" and investing heavily in sales and marketing. Auction.com previously raised over $91 million in 2008.
He pointed to another benefit of the investment: access to over 30 senior Google employees who serve as Google Capital advisors. Among those he now has access to are Google's VP display advertising Neal Mohan, VP global marketing Lorraine Twohill, VP engineering for Google Analytics Paul Muret and its VP and CIO Ben Fried.
He said he plans to rely on their expertise to help optimize Auction.com's search-engine marketing, display advertising and CRM integrations. "We obviously don't have as deep pockets as Google does, and as deep experience and expertise, so we're certainly delighted to plug into that."
Marketing To Multiple Segments
Auction.com caters to consumers and businesses of all sizes -- from large-scale institutional investors to "truck-and-ladder-fixer-upper guys." The company segments its customer base even further, approaching new buyers and seasoned Auction.com users differently.
"It's probably one of the more complex funnel models that I've seen," he added. "You have both new buyers coming in almost exclusively on the digital side and then you have a high degree of loyalty marketing and b-to-b marketing through more traditional mechanisms like Marketo and email marketing and integrating that with Salesforce.com."
Of the buyers on Auction.com each month, 30% are new to the platform, so there's a lot of education needed to get them familiar with the process of buying online and with bidding in an auction. An entirely different approach is needed for repeat buyers and sellers. "We do a lot of loyalty marketing, a lot of email marketing and a lot of hand-holding of what we call our VIP, recurring buyers -- people who bought five or more properties on the platform," said Mr. Thompson.
For Mr. Thompson, learning how to manage Auction.com's high touch and no touch marketing operation will be key: "Optimizing both of those funnels and finding the synergies between them is the main focus of what I'm doing."