Web Auction a Success for Texas Rivals

By: Charles Geraci Two rival Texas newspapers enjoyed great success in an 11-day online auction, which involved more than 500 companies listing over 1,500 unique products. The auction began on April 13 and ran through April 23. The Fort Worth Star-Telegram and The Dallas Morning News were apparently the first papers owned by different parent companies to team up in such a venture.

"Our net profit from this auction pleasantly exceeded our expectations," said Brad Hagstrom, retail advertising director for the Star-Telegram (Click for QuikCap), a Knight Ridder property. "Each paper benefited significantly by tapping into the other's readership base."

Both papers had around $3.5 million in retail value up for auction and sold $2.2 million. Of 3,502 items available for purchase, more than 2,100 were sold.

"We too are very pleased with the results of the auction," said Steve Weaver, senior vice president for advertising for Belo's Morning News (Click for QuikCap). "We could have done a little better job of selling it, but we got out of the blocks a little slow."

The auction was organized to minimize the risk that an item would sell for less than its retail value. To prevent this, the papers guaranteed merchants that if an item sold, it would receive advertising space of equal value to the item's retail price. While the Star-Telegram focused a lot on new advertisers, the Morning News mainly appealed to current ones.

"The feedback we've received from advertisers has been overwhelmingly positive," Hagstrom said. "In fact, many wanted to add auction items while the auction was in progress."

Both papers expressed satisfaction with their partnership and plan to do so again next year, with a lot more merchandise up for sale.

"We are very much into partnering with the Morning News," Hagstrom said. "They can benefit from our readership every bit as much as we can from theirs. Not only do we want to have a healthy competition with each other, but we would like to challenge each other to make this the biggest and best in the country."

Among the items up for auction: cars, travel packages, a heart scan, a "quit smoking" hypnosis package, and a $500 gift certificate for rodent control.

CityXpress of Vancouver, British Columbia, supplied the technology for the auction.

"One of the main reasons for our success is we followed the proven model outlined by CityXpress," Hagstrom noted. "Sometimes our industry tends to think we can do things better. But this is a case where we took their instructions to heart."

Both papers are currently collecting and processing payments. After CityXpress sends a final report, executives of both newspapers will meet to discuss the results and suggest ways to improve.

The papers indicated the auction was a lot of fun. "The staff was more engaged on this project than anything we've done in the last couple years," Hagstrom said. "They understood it, could explain it, and their enthusiasm transferred to the customer."

To any papers considering an auction of their own, Hagstrom gives this advice: "If you don't do it, someone else will. It is a very hot marketplace, and we have seen firsthand that online auctions are in demand."