Saturday, November 29, 2014

QuiBids Advertorials: Is QuiBids Still Using Them?

When QuiBids started way back in 2009, it was still a niche site in a niche but exploding market of penny auctions. It did remarkably well during a time when much of the competition folded shop (or were outright scams) over the long term, but every business has a way to get its name out there during the initial days. Sometimes, these methods are not the most 'white hat' and the CEO of QuiBids, Matt Beckham is all too familiar with such tactics.

Rise of the QuiBids Advertorials

QuiBids has used the advertorial model very effectively, especially during the initial days. An advertorial is a very frowned-upon tactic where an article appears like a news article, but is just an advertisement really. The advertorial links back to a site's landing page, where it is meant to convert visitors into customers. The advertorial itself is linked from various places online, from buying up Adwords ads to other pay per click advertising. The advertorial gives an air of legitimacy that doesn't actually exist, which is why it is considered quite shady. The advertorial-aggregating website doesn't do any editorial work, obviously, but will instead publish anything and everything that would pay money.

There was quite a controversy several years ago around QuiBids advertorials. QuiBids CEO Matt Beckham had a history in this field, even before he founded QuiBids. And it was controversial. Here's an old QuiBids advertorial:


Current Status

It appears that QuiBids hasn't stopped the practice of advertorials even now. Today, it seems like it's easier than ever to insert these ads, especially in the 'Around the Web' type of articles that you often see at the end of another article that you're reading online.

In this case, I saw a QuiBids advertorial linked to from 24/7 Wall Street, a financial news site. This was the ad unit:

and here's the screenshot for the full page:


The ad read:
"Discount Site" Sells Apple Products For $20-$35

That does sound like a penny auction site. When I visited the site, it was an advertorial for QuiBids, titled: How To Pay Just Pennies For Brand New Products. The site links to a QuiBids landing page for Black Friday.

QuiBids is a big and mature company today, and has distinguished itself very well from most other penny auction sites, even popularizing its category as 'Entertainment Auctions', to distance itself from the 'penny auction' label. However, such advertorials don't always speak too highly of the business and the site. I think it should stop this form of advertising. What are your thoughts?


Thursday, November 13, 2014

QuiBids Expanding Into Women's Fashion?

As penny auctions fall out of favor, more or less, with consumers (yes, the industry is not even close to its peak in 2010-2011 where a new site opened up every day in all kinds of niches, without regard to potential profitability), QuiBids is one of the oldest and most trusted sites still standing and going strong. However, it knows that it isn't going to see an expanding industry anytime soon, so it makes sense that QuiBids is trying to diversify. And it is doing it well.



Recently, QuiBids started featuring more items in women's fashion world. This is significant for a few reasons -

  • Women's fashion items have a very high margin. This means the mark-up for Buy Now is significant. On an average, therefore, it is easier for QuiBids to break even and make a profit off these items. I can guarantee their profit margins on this category are significantly higher than say electronics. 
  • QuiBids seems to be forming strategic partnerships. In fact, I wouldn't be surprised if they are actually getting paid for the publicity or able to get really nice deals on the items themselves. Mind you, these aren't world renowned fashion brands but the ones I'd classify more as "upcoming". The exposure these brands get from tens of thousands of QuiBids shoppers is significant - they don't (yet) have much clout. 
  • For the future, the fashion industry seems like a nice category to expand business in. It attracts a different set of users, who might be obsessed with a deal (if you don't believe me, check out a sample sale event in New York and you'll know what I am talking about!) in the fashion industry. They could then become regulars. 

QuiBids is slowly moving away from the traditional penny auction model and towards more lucrative eCommerce type business. Time will tell how they succeed. 

Sunday, October 12, 2014

Why is QuiBids Showing Competitor Advertisements?

Why is QuiBids advertising competitors? It's a weird business decision really. That too, using the plain old Google Adsense program, so the site has absolutely no control over what advertising is being shown. This means, if someone is searching for penny auctions in their Google history, they might be shown an advertisement of QuiBids itself. Or worse, a competitor.

As a general rule, if you're not an information-only website (e.g. this blog), it's a bad idea to have Google Adsense ads on the website. It's worse if you're in the e-commerce space, since you're most likely to see competitor ads on the site. When I tried it out, for instance, here's an ad that I saw on the QuiBids page:


The site being advertised is BuyDig.com, which is an e-commerce site (not a penny auction). However, Google is well known to track clicks and shows relevant advertising. It wouldn't be hard to imagine that other people might actually be seeing competitor advertising on this space. It's even harder to understand when you consider the fact that this is a prime advertising location, above the fold.

Here are some competitors using Google Adsense text ads (and possibly the banner ads too):




Normally, if companies want to advertise on their homepage and every other page, they might like to use a non-competing advertiser, instead going through marketplaces like BuySellAds which give more freedom in choosing what advertisement will be shown. Going with Google Adsense is a bit naive, in my opinion, because it opens up the possibility to show ads for direct competition.

It might also mean that QuiBids is not doing as well as we think, and needs the extra revenue, even if it means a direct reduction in its overall sales and customer retention (as some customers would go off to competing websites). Otherwise, it might be that QuiBids gets so much traffic, that it feels like this would add a significant source of revenue for the website.

What are your theories for this behavior? 

Saturday, June 21, 2014

Vidfall Review: A New Penny Auction Like Group Buy Site

This Vidfall review with explore all the features of a new penny auction-like website, which allows you to buy discounted gift cards and other discounted products, but crucially, without paying for bids. It's a new site that I find very promising in this space. More technically, Vidfall is a "Group Buy" website which isn't a traditional penny auction, but the basic idea is similar - you get products at a discount, and the discount is applied through the efforts of the group but there is only one winner. However, Vidfall is far less riskier, since you don't pay for the bids. Let me explain how the process works.

How Vidfall Works

  • The price starts at the market rate, so $10 for a $10 Amazon gift card. 
  • 'Bids' are video ads watched. Each video advertisement that you watch on the website, you get one 'bid' which is then automatically placed on the auction. Each 'bid' reduces the price by $0.01. So after you watch the video ad, the price of the above Amazon gift card would be $9.99. 
  • There could obviously be multiple 'bidders' on the auction. Lets say there are 10 people, all watching ads and reducing the price. This means, on an average, the price of the gift card is dropping by $0.10 each duration of an ad. 
  • Anyone can jump in at any time and just buy the deal. Lets say people collectively watched 100 ads, so the price dropped by 100X$0.01 = $1. This means the $10 Amazon gift card is now selling at $9. Someone thinks this is a good deal and buys it. That person gets the $10 Amazon gift card for $9, and rest of the bidders get nothing (just like in penny auctions). 
  • Each auction, just like in penny auctions, has one winner. However, unlike penny auctions, all the other auction participants only pay with their time rather than money. The losers in the auction don't really lose money at all. 'Bidding', therefore, is completely free. Instead of paying with your money, you pay with your time/attention by watching advertisements. 
If you want a more visual explanation for this, check out the official Vidfall video to learn more. Also, if you want to keep up with the latest news from the site, check out their official blog.



How Vidfall Makes Money

I always like to discuss how the site makes money, because if the business model isn't sustainable, it might very well close down, especially in this space (although in this case, people won't lose money if they shut down, just lost time and lot so frustration).

The way Vidfall makes money is very simple - through selling video ads on its website. Right now, it needs to get at least $0.01/ad from advertisers, which is a little high in my opinion. They'll need to make something a little more sustainable. However, that being said, also remember that gift cards almost always sell at a discount to their market value, so they have some leeway there.

However, I also believe that if Vidfall can gain more customers, it can find other ways to monetize the site for itself. Besides, right now, Vidfall seems to be a funded startup, so they shouldn't be thinking about their bottom lines at such an early stage. The bottom line is, if the model turns out unsustainable and the site closes down, you won't lose any money.

More About the Company Vidfall

Vidfall is very different from many other penny auction sites, in that it is being run more as a tech startup than a get-rich-quick scheme. This means there's a lot more room for organic growth and exploring new business models and ideas.

Vidfall is being funded by Wasabi Ventures, which means they should be able to spend money and expand their business without thinking about profits from day one. The site is started by Joel Robinson, who is one of the 'Entrepreneurs in Residence' at Wasabi Ventures.

Vidfall just completed their alpha testing in May 2014 and the results seemed very promising. They also won $30,000 in a startup competition recently, which should give them money to expand their user base. They were also on the top spot on Reddit's r/startups for March. All this is a very promising start for a young company and hopefully they can keep the momentum going (I've seen too many promising ideas in this space that have now gone into the history books, but I think Vidfall might just pull it off if it can make its long-term business sustainable).

My Experience

I tried Vidfall, and won a $5 Starbucks gift card for $2.54. Not too shabby I would say.


Right now, there seems to be low competition, so it's possible to get some nice deals, especially on gift cards. The site is very new, so don't expect a lot of variety of products, but my guess is, this will change soon in the future. There's no downside to it, really, so you should definitely give Vidfall a try