The Trada Model: Crowd-sourcing paid search?

So many potential advertisers, but how to get them on board? We in the industry have recognized for years that there are far more potential advertisers -- thinking local businesses, here -- who could spend a little money on paid search than there are national advertisers who can (and do) spend a ton. The challenge is how do you get them on board? Self-management is problematic. Google's self-management tools are pretty good and improving, but it's still a lot for a local business owner to absorb, and that's a tough pill to swallow when that owner is also responsible for running every other aspect of a business. Particularly if the upside is small, it's hard for them to justify the time it takes to learn the system. Agency management isn't an option. Paid search agencies haven't figured out a way to serve this market profitably. Setting up a good program takes time, and if the advertiser can't smartly spend but a couple hundred bucks a month on media in a geo-targeted program they can't afford to pay an agency to do the work for them. Between the labor to build and maintain the program, and the marketing cost associated with attracting, signing, invoicing these clients, it isn't worth it for an agency if they have to charge what the advertiser can afford. Is Crowd-sourcing the answer? Enter Trada. This March 2010 start-up, funded in part by Google Ventures, provides a mechanism for paid search marketers to do free-lance work for local businesses. The freelancers essentially compete with each other to buy advertising for the local business most cost-effectively. The advertiser just gives Trada an efficiency goal -- I'm willing to pay $8 for a lead, or whatever -- and the marketers compete to figure out who can generate money on the difference between what they pay for media and what the advertiser is willing to pay for the leads. Sound familiar? It sounds a lot like the affiliate marketing world, and I wonder if it's actually going to work as intended. It seems to me that the fundamental problem remains the same: it takes real work to make paid search work for the advertiser, and if the program is tiny there isn't enough money to pay the workers. I'm willing to wager that it will quickly boil down to which marketer can launch keywords around the advertiser's brand name the fastest and then they move on to the next advertiser. Why incur the risk and work associated with building out a real competitive search program and paying for the media and the cost of experimentation? The fact that it may provide little real marketing value to the advertisers may not mean that it doesn't work for Trada, for Google, and for the marketing professional who learn the game quickly. Mom and Pop may be willing to pay $200/month to Google for "advertising" and may not ever find out that the only business 'generated' by Trada was already "walking through their front door" proverbially speaking. Am I missing something?
Join the Discussion