We all know the sound: “Can I get a bid? Can I get a bid?” spoken at a rapid-fire pace. Auctions are a popular and longstanding method for buying and selling a wide range of items, from rare antiques to modern technology. In today’s digital age, the auction world has expanded online, introducing new formats and making bidding accessible to people around the globe.
Two of the most prominent types of online auctions are live auctions and timed auctions. While both intend to create a competitive environment that drives sales or fundraising, they differ significantly in their experience and how they operate.
A live auction, when online, replicates the excitement of a traditional auction house, conducted in real-time with an auctioneer directing the bidding. A timed auction, on the other hand, takes place over a specific period, accepting bids until a predetermined deadline and without an auctioneer overseeing the process. Understanding the benefits and challenges of both is essential for anyone hoping to sell or buy through an auction format because the online auction market is forecasted to grow at a CAGR of 12.36% from 2023 to 2028 — worth $3.076 million.
In a live auction, a “multiple lot” refers to a group of items that are auctioned together as a single unit. Instead of bidding on individual items, bidders place bids on the entire group or collection. This approach can be beneficial for both sellers and buyers, as it allows sellers to move several items at once and buyers to potentially acquire a set of related items at a competitive price. Multiple lots are often used when items are similar or complement each other, such as a set of dining chairs or a collection of artwork.
Let’s go over live auctions vs. timed auctions in detail:
What is a live auction?
As stated above, a live auction is a real-time event where an auctioneer oversees the bidding process. Usually a professional, this individual’s job is to generate energy in a crowd and motivate them to place higher and higher bids (not an easy task when online). Participants can join either in person or via an online platform where they can watch the proceedings and place bets in real-time.
Live auctions are famously dynamic and fast-paced, creating an atmosphere of urgency and excitement. The auctioneer plays a crucial role in managing the event’s overall flow and encouraging a sense of competition.
How live online auctions work
Functionality and technology
Live auctions rely heavily on technology to create a seamless and engaging experience for all participants, whether they are physically present or online. The core components of a live auction include:
An auctioneer: An auctioneer moderates the event, bidding, and determining winners. This person also sets the pace for live auction timing and encourages less engaged attendees to participate.
A bidding platform: Online platforms provide a virtual environment where remote bidders can participate. These platforms, like Dolby.io, typically feature live auction streaming software, audio feeds, and other functionality that enables interaction.
Real-time streaming: High-quality live streaming technology is imperative in live auctions to ensure that remote participants experience the event the same way in-person attendees do. Even if the event is entirely online, the slightest lag can throw off bidding or undermine a bet’s legitimacy. Tools like Dolby.io provide robust audio and video APIs that ensure ultra-low latency streaming so no bid is ever in doubt.
Bid tracking software: Because live auctions are fast-paced, it can be difficult for laborers to monitor everything that happens, so a system that tracks bids in real-time and updates the current highest bids is always beneficial. Such systems can also notify participants of new bids and must be highly responsive to prevent delays or errors.
Live auction use cases
Live auctions are particularly effective in scenarios where organizers need to invoke a sense of urgency and competition. Some common live auction use cases include:
Luxury goods and art: High-value items such as fine art, antiques, and jewelry are often sold through live auctions to maximize buyer competition and drive up the final sale price. These items are especially fit for auctions because it’s difficult to assign individual items a retail price; their value is subjective, so their final cost is how much they are worth to individual bidders.
Charity events: Charities and nonprofits also favor live auctions to fundraise because they create excitement and encourage higher donations. The majority of the items or services sold are donated, so organizations can raise more money when participants bid higher than a particular item is typically valued for.
Real estate: Properties can be auctioned in a live setting to attract serious buyers and quickly close sales.
Collectibles and memorabilia: Rare or unique items, such as sports memorabilia or vintage collectibles, are similar to luxury goods in that their value depends on individual bidders and are thus ideal for live auction settings.
Live auction benefits and challenges
Live auctions are a great way to raise funds and drive sales, but they’re not without their obstacles. Some benefits and challenges include:
Benefits
Sense of urgency: The fast-paced nature of live auctions encourages quick decision-making and active participation. This urgency leverages people’s fear of missing out — they don’t want that last exciting item to go to someone else!
Competitive environment: Real-time bidding can drive up prices, resulting in higher returns for sellers.
Buyer and seller commitment: Live auctions often involve serious buyers who are committed to purchasing, reducing the risk of sales falling through.
Immediate results: Bidders and sellers receive immediate feedback on the auction outcome.
Challenges
Scalability: Managing a large number of participants and ensuring a smooth experience can be difficult. Solutions like Dolby.io’s live auction software provide scalability and reliability with high-quality audio and real-time video streaming, so you can host auctions with a high number of attendees without worrying about your system overloading.
Manual bidding: Unlike timed auctions, live auctions typically require active, real-time participation, which can be demanding for both buyers and sellers.
Higher production costs: Live auction events can be more expensive than their timed auction counterparts because they require professional auctioneers, faster streaming technology, and bid-tracking systems.
What is a timed auction?
A timed auction is an auction format where items are available for bidding over a set period, such as several days or weeks. There is no live auctioneer and participants can place bids at any time before the auction closes. The highest bid at the end of the designated period wins the item.
Timed online auctions are more flexible than live auctions, allowing participants to bid at their convenience. This format is commonly used on digital platforms where organizers list large numbers of items simultaneously. Silent auctions are a form of timed auction, which are also common at charity events and sometimes accompany a live version.
How timed online auctions work
Functionality and technology
Organizers rely on technology to handle bids and automate timed auctions, including notifying participants and determining winners. The core components of a timed auction include:
Auction platform: An online platform that hosts the auction, displays items, and manages bidding. These platforms are also often present at in-person timed auctions to streamline the process; participants can access them on their mobile devices or nearby screens.
Automated bidding system: A system that automatically accepts bids and updates participants on the current highest bid, allowing attendees to focus on other tasks while continuing to place bets in the background.
Notification system: Alerts bidders when they are outbid or when the auction is nearing its end, encouraging further bidding.
Timed auction use cases
Timed auctions are ideal in scenarios where flexibility and scalability are more important than real-time engagement. Common use cases include:
eCommerce platforms: Websites like eBay regularly use timed auctions to sell a wide range of products, allowing sellers to reach a global and more distributed audience.
Surplus and liquidation sales: Companies looking to quickly sell excess inventory or liquidate assets often use timed online auctions to sell as many items as possible.
Government and corporate sales: Government bodies and companies also leverage timed auctions to sell surplus government property, vehicles, and more.
Charity events: Nonprofits can use timed auctions as well as live auctions. Though the former lacks the spirit of competition that drives up bids, auctioning smaller-scale donated items is a convenient way to fundraise.
Timed auction benefits and challenges
When considering between live auctions versus timed auctions, the latter has benefits and challenges to be aware of as well:
Benefits
Global scalability: Timed auctions can attract participants from all over the world, increasing the pool of potential buyers.
Self-paced bidding: Participants can bid at their convenience without the pressure of real-time competition and browse an auction’s catalog for longer.
Automated systems: Timed auctions reduce the need for manual oversight, making them easier to manage and less costly to run.
Challenges
Lack of commitment: Unlike live auctions, buyers and sellers may back out of a sale since there is no real-time engagement or urgency.
Lack of urgency: The format’s extended duration may reduce the sense of immediacy, potentially lowering final bid amounts.
Market saturation: Individual items may receive less attention when numerous items are listed simultaneously.
Comparing timed auctions vs. live auctions
While both live and timed auctions serve the purpose of selling items through a competitive bidding process, they differ in several key ways:
Engagement: Live auctions offer real-time engagement and excitement, while timed auctions provide flexibility and convenience.
Technology requirements: Live auctions require robust streaming and real-time bid-tracking technologies, whereas timed auctions rely more on automation and notification systems. That said, timed auctions still benefit from high-resolution streaming to show off items (from different angles when those items are physical or marketing-oriented when they’re certificates for experiences like travel) to encourage bidding.
Scalability: Timed auctions are more scalable due to their automated nature while live auctions require more resources to handle large participant numbers.
So, what’s the right auction format for you? That depends on your specific needs and goals. Live auctions are ideal if you’re trying to sell more items or raise more money in a shorter timeframe or sell high-value goods. Timed auctions are suitable for selling large volumes of items, reaching a broader audience, or allowing bidders to participate at their convenience.
Host live and timed auctions with Dolby.io
Whether you opt for a live or timed auction, Dolby.io provides the tools you need to deliver a high-quality, reliable experience. With Dolby.io’s live auction software, you can take advantage of features like low-latency streaming, robust audio and video quality, and scalable infrastructure to host engaging and successful auctions. You can even overlay auction details over the video feed so all attendees can keep up with what’s happening.
Get in touch with us to learn more about how our auction APIs can make your events seamless.
