GD Auctions API Bot Behaviour

[Brandworthy]

Some information about one particular GD Auctions API Bot and how their automated bidding works. I try not to watch live auctions. Too easy to get caught up in the ebb and flow (and end up overbidding). But I sat and bid some auctions to better understand the programmed behaviour of the bot. All the bidding activity is designed to minimise the cost and maximise the probability of winning. Here are some of the traits it displayed:

1. Initial bid is a backorder. Contrary to what some may think after Godaddy raised backorder pricing some time back, Backorders are marginally cheaper than $5 closeouts when buyers purchase in bulk. The cheapest closeout is $13.47, but when you buy backorders by the hundreds Godaddy will offer you a price around $0.20 cheaper than this. Possibly cheaper if you buy thousands of backorders (which I suspect teh ownerof this bot likely does).

2. Right after the backorder is created a second bid is placed at the next bid amount (i.e. $5 higher). This behaviour is replicated once the bot becomes the high bidder also (see later). I suspect this second bid is to retain the high bidder position if a second bidder comes in with a new non-proxy minimum bid. So Bidder 1 (the bot) places backorder at $10. Immediately after Bidder 1 also places a bid at $15. If a new Bidder 2 places the minimum bid at $15, Bidder 1 is still the high bidder at $15.

3. Approximately 20 seconds before the auction is set to end the bot checks the current bid. Becasue GD's web interface only shows hours and minutes it's not possible to see if this timing is set or varies. If the bot is still the high bidder I suspect they do not check again (very difficult to check via web). If they are NOT the highest bidder they will place a single bid $5 higher than the current high bid. The API response will tell them if their recent bid is the high bid or not. If not, they will immediately place a new bid $5 higher, and continue doing so until they are the high bidder (or their bid budget is reached, more on this later). In the web interface you can clearly see this behaviour when there are a very high number of bids made in less than a minute, which would be impossible to achieve manually.

4. If the bot's bid becomes the high bidder a secondary bid $5 USD higher is immediately added, similar to (2) above, subject to the bots bid budget. This is done to minimise the price at which bot finally becomes the winning bidder (no need to bid $5 more if a single higher bid is made).

5. At no time will the bot make a proxy bid. This suggests that the bot has been programmed to take as much time as possible. This strategy may be designed to wear out human bidders, and in fairness, a part of me admires the tactics used here. But as a human bidder, I imagine most people will despise this behaviour.

6. The bot does have a bid budget, but I don't have enough data to posit how this might be set. Right now I suspect it might be set at 8-12% of an appraised value.

Based on what I've seen this bot is optimised in multiple ways to acquire domains for the lowest possible price. From using backorders to setting secondary bids at minimum next bid level, and not placing proxy-bids to adding new challenging bids at the latest possible point in time, the bot is designed to minimise costs, maximise duration, and win as many auctions within budget as possible. Placing a secondary bid $5 above the bots current winning bid is very clever IMO, as this negates at least some cases where you would have to bid an additional $5 to finally win the auction.

Hope the above might be useful to some GD auctions users who come up against this opponent!

 

[wwwweb]

If you understand how HTTP works, and especially so for web pages, you'll know that it's almost impossible to POST a request, receive a response, and parse the output 10 times sequentially in a single second. Doesn't matter if you're a BH or WH.

You have to wonder about domain-related companies who choose to hide their identity behind WHOIS privacy...

It’s not Mark monitor, he is trying to imply that.

There are plenty of people calling them out for front running domain auctions on namepros, and on recent blog comments.

 

[golan]

If you understand how HTTP works, and especially so for web pages, you'll know that it's almost impossible to POST a request, receive a response, and parse the output 10 times sequentially in a single second. Doesn't matter if you're a BH or WH.

I don't need to know how the car engine works, i can just get to a car and drive. (Of course it's better to know it anyway, but many people have no idea and just use a car like a tool.) I don't need to know how HTTP works, i just use multiple tools like this daily. (No, i don't use bidding bots.)

You don't need to do that sequentially. Key word: multithread. That's how all those tools work.

And yes, it does matter if you're a BH or WH. If you are WH, you may look at this kind of stuff amazingly, and keep repeating "but this can't work, if you understand how HTTP works, bla bla". But if you are BH, you just use the tools like this daily, and if you need go and order a bot for your needs from a coder.

I then contact through whois and make an offer direct reminding the lister that there are no fees when dealing direct. I landed two this week after reminding the owner of the domains there was a 20% fee. We were only about 10% apart in our negotiations when I reminded him that at auction he has to pay 20% so if he takes my deal he is 10% ahead. That goes with any private auction, you can right away offer 20% less to make up for the auction fees. Why give that away when it can be retained by the buyer/seller. In the last two weeks I have retained $3,600 that would ordinarily have gone to the auction house.

But couldn't an auction site ban the seller if he just pulls the domain off during the auction? If he already received some bids, they are legally binding.

 

[MapleDots]

But couldn't an auction site ban the seller if he just pulls the domain off during the auction? If he already received some bids, they are legally binding.

Yes, you have to make sure there are no active bids. Most of the ones I do that for will have no bids anyways because they are priced too high. Right away you can negotiate by 20% because of the auction fee. So if the guy wants 5k you remind him he only gets 4k and we can do the deal at that if we go private.

 

[Brandworthy]

You don't need to do that sequentially. Key word: multithread. That's how all those tools work.

You're quite obviously missing the part about needing to parse the result in order to decide what to do next. If you want to just fire over 10 bids that's fine (and dumb), but if you want to send over 10 bids because none of the previous bids made you the highest bidder then you MUST do this sequentially.

And yes, it does matter if you're a BH or WH. If you are WH, you may look at this kind of stuff amazingly, and keep repeating "but this can't work, if you understand how HTTP works, bla bla". But if you are BH, you just use the tools like this daily, and if you need go and order a bot for your needs from a coder.

I posted this hoping it might be useful to others. But if you haven't a clue about how this works or what you're doing it's probably best just to ignore this thread.

 

[tonyk2000]

I am also wondering has the increased bot activity anything to do with increased number of expired domains that received their first bid noticeably before (days before) the end time. Domainers always used to prefer to place bids in last 5 minutes, or, at least, not in days.

So are these bids all enduser bids? Unlikely.

The only explanation I ended up with so far is somewhat "irrational":

If somebody has a list of domains he might want to acquire, and, due to increased bots activitly, will unlikely acquire (not paying normal wholesale prices at least), he probably wants to at least add his 2 cents to decrease the portfolio quality of said bots. The bots will change strategies to something more rational (or shutdown) earlier or later anyway. Even hugedomains now started to drop domains again and is more selective with bidding. Placing first bid early will add more attention, increase sale price to even more irrational levels, and will force bots to pay more. Which fact an early human bidder might consider a positive by itself in a long run.

Any other explanations why would a domainer place an early 1st bid (so routinely)? Why would anybody want to "subscribe" _not_ to win the domain?

 

[golan]

I posted this hoping it might be useful to others. But if you haven't a clue about how this works or what you're doing it's probably best just to ignore this thread.

Right. Sorry, i didn't intend to hijack your thread. I just replied to the technical "impossibility".

 

[wwwweb]

I am also wondering has the increased bot activity anything to do with increased number of expired domains that received their first bid noticeably before (days before) the end time. Domainers always used to prefer to place bids in last 5 minutes, or, at least, not in days.

So are these bids all enduser bids? Unlikely.

The only explanation I ended up with so far is somewhat "irrational":

If somebody has a list of domains he might want to acquire, and, due to increased bots activitly, will unlikely acquire (not paying normal wholesale prices at least), he probably wants to at least add his 2 cents to decrease the portfolio quality of said bots. The bots will change strategies to something more rational (or shutdown) earlier or later anyway. Even hugedomains now started to drop domains again and is more selective with bidding. Placing first bid early will add more attention, increase sale price to even more irrational levels, and will force bots to pay more. Which fact an early human bidder might consider a positive by itself in a long run.

Any other explanations why would a domainer place an early 1st bid (so routinely)? Why would anybody want to "subscribe" _not_ to win the domain?

All good questions, there is a lot of irrational strategies employed in the current aftermarket bidding strategies, which has many scratching their heads. Some people are just willing to make infinite amounts to win an auction, all these automated systems, playing on the frustrations of human elements is a perfect storm, and a great win for Godaddy.

What is the purpose of these people buying these domains, they are not using them, they are buying them to relist them to potential buyers, but if you end up paying to much, and out pricing your buyer what is the point? We all hear what most end users say, I will find a cheaper alternative etc... The logistics of current bidding strategies do not make much sense, These are the names we bought years ago for under $50, most are still sitting in out portfolios. Any downturn in the economy, and things go quiet very quickly, and expensive inventory does not usually give a good rate of return sitting there with an overpriced sticker on it. Anyone who has a decent portfolio, is smart to take money off the table, and let these high biddders sit on them for a few years, and wait for them when they need money. That is why I see guys like D Naidu selling on namejet now.

 

[Josh R]

Yes, you have to make sure there are no active bids. Most of the ones I do that for will have no bids anyways because they are priced too high. Right away you can negotiate by 20% because of the auction fee. So if the guy wants 5k you remind him he only gets 4k and we can do the deal at that if we go private.

@MapleDots - GoDaddy have banned buyers in the past that are clearly doing this or promoting it, so I’d be careful.

Just friendly advice.

 

[MapleDots]

@MapleDots - GoDaddy have banned buyers in the past that are clearly doing this or promoting it, so I’d be careful.

Just friendly advice.

I'm not too worried about that, I make more money using the 20% commission to my advantage than to worry how godaddy feels about it.

If you list at 10k and someone offers you 8 then you get $6,400

I contact you and offer you 8 then you get 8k period.

It's the best tool a domainer has when purchasing a domain. I traditionally only sell via my landers and outbound anyways so I have nothing to lose. I don't think I have ever had any real luck using godaddy to sell, and trying to buy there now is difficult with companies like huge domains eating up all the expiries.

So tell me again why I should worry about godaddy

 

[Josh R]

I'm not too worried about that, I make more money using the 20% commission to my advantage than to worry how godaddy feels about it.

If you list at 10k and someone offers you 8 then you get $6,400

I contact you and offer you 8 then you get 8k period.

It's the best tool a domainer has when purchasing a domain. I traditionally only sell via my landers and outbound anyways so I have nothing to lose. I don't think I have ever had any real luck using godaddy to sell, and trying to buy there now is difficult with companies like huge domains eating up all the expiries.

So tell me again why I should worry about godaddy

I guess you shouldn’t