​BuddyBid delivers auctions to Facebook, natively

The BuddyBid app allows businesses and individuals to transact where consumers spend their time -- within Facebook.

A meeting of minds between the chief executive of an auction house and a social media marketer is helping realise the dream of social commerce.

Neil Campbell and Ken Brickley are the duo behind the BuddyBid Facebook app that enables auctions to be run natively within the social network.

Auctions run in BuddyBid can be used to set a price for goods and to generate leads. That's because information about under-bidders is available to the seller, who can make contact and make offers to potential customers at scale.

The pair met three and a half years ago, when Campbell was chief executive of Webb's Auctions in New Zealand, and Brickley was running social media campaigns at agencies for the likes of Australasian retailer Harvey Norman.

Neil Campbell and Ken Brickley

In that role, he had been working with Facebook account managers piloting new technologies. He visited Facebook and learned about its new API.

When he met Campbell, he was "buzzing" about the potential. The problem for businesses using Facebook, as they saw it, was that there was little point in winning a whole lot of "likes".

"Everyone was getting good engagement, but likes are kind of fluffy," Campbell said. "Boards are asking 'where is the return?'"

It was, he said, like the early 2000s, when everyone had to have a website but they weren't sure why or what to do with them.

To profit from investment in social media, it had to become transactional. Rather than a "harvesting tool for eyeballs", albeit one with a high bounce rate, Facebook could become a sales channel.

The first prototype of what was to become BuddyBid was developed at Webb's, but when it was sold, Campbell kept ownership of the IP.

Development was along the lean startup model, Brickley said, beginning with a minimum viable product.

And so, in 2012, BuddyBid was founded to ask the question of whether people would buy from within Facebook. Happily, for the co-founders, the answer was "yes".

Part of that mission was to eliminate the awkward "hand-off" between the familiar environment of Facebook and external transactional interfaces that have so far largely been defined by the banking system.

BuddyBid aims to take the product to where the people are without interruption, Campbell said. The result is a low, sometimes single-digit, bounce rate.

With BuddyBid, as soon as you click on the content around an offer, you are in a transaction environment and everyone sees when you've placed a bid, generating social conversation.

Payments are cleared through a bank or through PayPal.

The first BuddyBid sale arrived shortly after the app was released into the market -- a signed baseball sold by a user in Ohio.

BuddyBid sees a lot of hobbyists now using its app, selling all sorts of strange stuff -- from geckos to lyrics written by Lorde to python food in the form of frozen mice -- and generating good prices.

But business was always a key target. BuddyBid offers a white-label version of its app that can be "skinned" by corporate users.

BuddyBid's revenue is a percentage of transactions, which varies from industry to industry, in addition to a monthly fee. A set-up fee for white-label versions also can apply, depending on the level of integration required.

Australian online auction company Grays Ecommerce Group was an early adopter. One of its websites, wine trader Greys Online, is using BuddyBid to broaden its demographic market into Facebook.

Greys was rapidly followed by other corporate users, such as Turners Auctions, media company Fairfax, and charity Ronald McDonald House.

While BuddyBid has the odd month when it is cash flow positive, its founders point to huge growth potential, with analyst firms such as Forrester and Booz valuing the social commerce market at up to $30 billion.

And it isn't limited to Facebook; Pinterest is reportedly working on an API, while LinkedIn is a natural extension for business-to-business transactions, the co-founders said.

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