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In the old days (Oh, about five years ago), the popular form of marketing was to place advertisements on search engines, mainly Google. In fact, venture capitalists backed start-ups to help small businesses get their ads off of the big outdated and arcane Yellow Pages and onto Google, Yahoo, and then Bing.
But there's been a change of late as Facebook is quickly becoming the popular marketing platform to attract new customers. With 800 million users, how can it not?
To this end, Trada, a crowdsourcing advertising service for search, has set its eyes on helping its small- to medium-sized customers, such as flower shops or organizations with one-man marketing teams, to advertise on Facebook. The Boulder, Colo.-based Trada, which has $5.75 million in funding from Google Ventures and Foundry Group, announced Wednesday that it's created a marketplace to connect advertisers and Facebook marketing experts.
"The real vision for Trada is we believe crowdsourcing can be applied to any type of performance-based marketing venue," said Niel Robertson, founder and CEO, of Trada, in an interview with me. "We also started to feel that our customers wanted to be on Facebook."
Currently, the new Facebook service for Trada is in its infant stages, with only a handful of clients that tested it out this summer, one or two of which paid about $25,000 for a month-long campaign. There's currently about 100 experts and 100 designers to help get the campaigns onto Facebook. As an example of the way the crowdsourcing platform works, the advertiser will go to Trada and say, "Find me an audience to buy my golf clubs on Facebook on this budget - 20 cents for each like, 50 cents for each click and $10 for each acquisition."
Trada will crowdsource that order to its experts (those who understand how to capture an audience on Facebook - mainly freelancers and consultants) who will then self-organize or compete against one another to come up with optimal campaigns and copy for different demographics. The experts then will work with designers, who come up with the various images needed for campaigns. The experts compete against one another for that job and only get paid if their campaigns deliver results: a click, a like, or an actual sale.
It's unclear how much the advertiser will pay the expert (but currently experts receive about 12% of the budget on search), but the funds the expert does receive will be split the designer and Trada. Since Trada is just launching on Facebook, there's few metrics to share, but most likely the click-through-rates on Facebook are probably around half-a-percent, or similar to display ads, said Niel. Additionally, "likes" are typically cheaper than "clicks."
But "likes" are pretty valuable, Niel explained. "Likes are the email or the direct marketing of the future," he said. "Everything direct marketing was supposed to be is now capable with likes." Indeed, today if a flower shop ownerd wants to reach out to all mothers over 40, they can create campaigns against all those who've "liked" their business and who fit that demographic.
At the moment, Trada expects medium-sized businesses to embrace the platform, and not so much the smaller ones. "This is more of a reflection of who's marketing on Facebook," he explained.
He also expects his stable of experts will grow significantly from 100, with a simple ad on Craigslist seeking marketing experts on Facebook.
The question is: Can these experts make a decent living? After all, on search, one advertsing customer pays about $600 to $6000 a month for their ads, which then is split among all the experts and designers, as well as Trada. This figure comes from the fact that the median spend on search for Trada's service is between $5000 to $50,000, said Niel. There are customers paying half-a-million, however.
It'll be interesting to see how Trada, which competes with other similar services like Marin Software, Clickable and Yield Software (recently bought by Autonomy) fares on Facebook. Small businesses are notorious for not wanting to spend a lot of marketing bucks. And, they're also known for not wanting to do much more than write a check.
Since launching its service 18 months ago, Trada has attracted 500 customers to service on search. The marketplace has also attracted 2000 experts. Niel expects the market he's targeting - small- to -medium-sized businesses that would use performance-based marketing services to be roughly two to three million (or about 10% of all small businesses in the country.
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