Crowdsourced ad platform Trada closes new round of funding

Paid search and Facebook ad marketplace Trada has raised an additional $9 million in an inside round of funding from Google Ventures and Foundry Group, the company announced today. Trada serves small- to mid-sized advertisers by crowdsourcing targeting and creative options from its community of optimizers and designers that specialize in campaigns for Facebook, Google, Yahoo and Bing.

The Boulder-based startup began as a marketplace for paid search, but expanded into Facebook advertising in November. Advertisers come to Trada with a budget and campaign goals, which the company will help define based on current pricing estimates, for instance average cost per fan within a particular demographic. Trada’s community of optimizers, as they’re called, develop copy and make targeting recommendations. A group of designers produces image variations. The client can have final approval on all creative and targeting.

Rather than taking a percent of an advertiser’s budget or charging a monthly fee, Trada and its ad specialists are compensated on a performance basis. For example, an advertiser’s goal is to gain Facebook Likes and it is willing to pay $2 for each new Like an optimizer brings to the page. If an optimizer finds an ad target and creative permutation that results in Likes for $1.50, the optimizer keeps the difference. Of that $0.50 margin, 10 percent goes to the designer ($0.05) and 25 percent goes to Trada ($0.12).

With this model, Trada and its specialists have incentive to bring down costs, but they benefit more when there is greater disparity between a client’s target CPA and the price optimizers get. Some advertisers might be concerned Trada’s goals don’t necessarily align with their own. However, if advertisers have previous experience with search or Facebook ads, and they know what CPA delivers a return on investment, then Trada can be a good solution. The client does not need to pay for designers or stock photography, nor do they have to write dozens of variations of copy and manage complex campaigns.

On the Facebook ad side, Trada works with clients who are spending a minimum $25,000 per month. It will typically run thousands of ad combinations over the course of the month. So far, the company has seen half of its clients running lead-generation campaigns driving to a site off of Facebook. The other half has been interested in campaigns to increase Likes on their page. Trada says it is capable of managing Facebook’s relatively new Sponsored Story campaigns, as well.

With its latest round of funding, Trada is looking to hire more designers and extend the marketplace approach that has been successful for the company on Facebook to other types of graphic-based advertising, beginning with search retargeting. The company expects to be profitable by the end of the year.