Halfnimity

October 18, 2010 By 5 Comments

Halfnimity. When you're not entirely sure of the identity.

One of my favorite topics in crowdsourcing is the debate between anonymous and non-anonymous approaches to the crowd. While I think in the end it will take all strokes, I definitely feel that the trend is moving towards non-anonymous. The primary reason is that as crowdsourcing systems become more sophisticated, personal reputation can actually be created. Now it matters more.

Witness the growing number of crowdsourced “Ask a Question” sites and their movement towards more transparency. Basically they realize that a) it matters who answers your questions and b) you are less likely to abuse the system when your real name is on the post.  In the early days we had IRC, chat rooms, etc. that were totally anonymous. Then we evolved to sites like Yahoo Answers and Mahalo. Now we have sites that mix building knowledge with building reputation. Sites like StackOverflow and Quora are great examples of these. In fact, part of what makes Quora interesting and successful (compared to all the answers sites that have come before) is actually knowing who is answering the question. Take for example questions like “What does Dustin Moskowitz actually think about Facebook?” It’s pretty much as good as you’re going to get when Dustin himself answers it (and you know the answer is his). Some other examples you might not have realized are Twitter (more emphasis on real names in the new interface) and the massive exodus from MySpace (anonymous) to Facebook (non-anonymous).

All of this is happening for two reasons: humans stick to the rules better when their real identities are traceable to their actions and reputation is starting to matter. One of the most interesting things I found out about Yahoo Answers was that they allowed Top Contributors to put this “fact” on their real world business cards in the categories they answered questions in. Top Contributor in Carpentry? Great, put that on your carpentry company’s business card.

LinkedIn makes people’s resumes more public and connects all our interactions (Tweets, comments, etc..). We all are building an online reputation whether we like it or not. If you don’t believe me check out Klout, which just now integrated Facebook. Some hotels and casinos are already using Klout scores to decide who gets upgrades. How long will it be before software companies use your StackOverflow score in consideration during the interview process. And at some point, I am sure being one of the best paid search experts in Trada will help someone get a marketing job or freelance PPC job. As I’ve written about previously, Trada doesn’t allow anonymity in the crowd.

So how do we get there from here?

Part of the big issue is that it’s such a jump from anonymity and all its benefits (and abuses) to non-anonymity and all its benefits (and privacy issues). The answer, I realized yesterday is what I call “Halfnimity.” Halfnimity is simply the format “First L.” as in “Niel R.”. I first started seeing this format in the DailyMile. I thought it was interesting partially because you could click on someone’s name and then you’d see their whole name in the title bar of the browser (this may have been a bug or intentional – I could never figure out which). Then I started seeing all of this in Foursquare (e.g. Joe S. wants to be your friend). And a few things struck me.

a)     This is the slippery slope (some may slippery in a good way) to being fully non-anonymous

b)     It’s amazing how quickly you know who a system is talking about by just “First L.” and one other piece of data (like location, or a picture, or a place they might have been to).

c)     I realized that Foursquare, in the long run, needs people to be non anonymous. Their goal is to create reciprocal value between the consumer (voyager) in the real world and the retailer (port in the social storm). That transaction for the most part has to be handled authentically (with real names) so there must be a connection between the real person and their real identity.

d)     This information is as good as anonymous to me for someone I don’t know (who is “Sally K.” in Kansas? Might as well be “KansasGirl45”). This provides a sort of interesting non-linear curve in transparency. If someone does know you, it’s as good as non-anonymous. If they don’t, it’s as good as anonymous.

Any way you take a position, it’s fascinating to me to watch this specific topic in crowdsourcing evolve. I firmly believe that each crowdsourcing platform needs to consider which versions of anonymity makes the most sense to it.  Crowdsourcing businesses now have three models they can employ: anonymity, non-anonymity and halfnimity. When building your own crowdsourcing business, or when contemplating the use of one, consider what’s important to you and what each model brings.

Filed Under: Crowdsourcing Tagged With: , ,

Got Google (Ventures)?

July 21, 2010 By 22 Comments

Today we welcome Google Ventures to the Trada family. Can I just say for one second, “Woot!” For those of you who have not read the news today, we announced that Trada closed a $5.75M Series C round of financing lead by Google Ventures and participated in by our other existing (and awesome) friends at Foundry Group. For many obvious and some not so obvious reasons we are over the moon about this.

The rest of this post provides a lot more color around the deal than one would get from the press release and likely most news coverage of the announcement. Before I wade into that, I would like to take a moment to thank the Trada team.

For almost 2 years now (Sep 15th, 2010 is the official 2nd birthday of Trada), this team has kicked some serious butt. We’ve had a lot of long nights, quick scrambles, healthy debate, failures, recoveries and cupcakes along the way. We’ve probably compressed more “startuping” into 2 years than most startups experience in 4. And throughout this whole time the team has kept it together, stayed positive, always played for the bigger team game, and simply just been about the best damn startup team that anyone could hope for. We’re quickly blowing past the 30’s in terms of number of employees and heading toward 50 soon. I spend a lot of time thinking about how to scale and preserve the amazing cultural dynamic that we’ve built and has emerged at Trada. I have a few ideas but I’d always love to hear yours. That aside, thank you to everyone at Trada for helping get our awesome company to this announcement today; it’s an unbelievable milestone for our business. I’m stating the obvious to say it’s important because it shows that we’ve done enough of the right things to get the attention and support of one of the most influential players in the ecosystem we operate in.

Okay, back to the announcement.

How Did this Happen?

Well it’s funny how things happen in the startup world. About 3 months after we funded Trada, I was in Boston talking to a fraternity brother of mine, Oliver Roup, about some interesting ideas for businesses. I mentioned an idea I had in the affiliate marketing space, which he glommed onto and starting running with. He proceeded to work the idea into something much more robust than the original basic idea I had, decided to call the company VigLink, and went off to raise money. About 4 months later, he closed his first round with First Round Capital and Google Ventures, and thus, VigLink was born. I joined the board as an outside Director and off we went. Getting to know both Josh Kopelman from First Round and Rich Miner from Google Ventures has been a great side effect of working with Oliver on VigLink. About 3 months ago, we decided here at Trada to raise some more money and Seth Levine and I made a short list of who would be the ultimate players to have in the deal. Google Ventures came to the top, and fortunately through the VigLink board I knew Rich.

Why Rich?

A lot of entrepreneurs think of Venture Firms as the firm before the people (“Oh, let’s go try to talk to Kleiner!”). I believe this is actually the wrong way to think about it. Venture firms are first and foremost people, loosely collected around a fund strategy and collective approach. Every partner has a different style and finding the right combination of personal style and fund approach is important. Seth and I have forged a unique relationship as investor/CEO at Trada. I view him basically as an operating executive on the team. He’s involved every day in some form, our relationship is one based on total transparency into the business, and this dynamic is one that I did not want to change with someone new on the board. Fortunately, I had worked closely with Rich at VigLink and understood his approach to being an investor in the business (as well as Google Ventures). It can be summed up as lots of help, deep knowledge of the business, and lots of leverage.  I’ve seen this be critically valuable for Oliver at VigLink, and I knew Rich would fit into the working style Seth and I had created for Trada. In fact, when Seth and I built a short list of venture firms we wanted to talk to about this round, we actually first built a short list of partners we knew would fit our style and reached out only to those people. So really my pleasure in this announcement is as much about working with Rich more closely as it is about working with Google Ventures.

What Are You Going to Do With All That Money?

Our press release refers to three basic things we’re going to do more of with the money and of course having money in the bank lets us accelerate what we’re already doing. The blanket use, and most relevant to our existing customers, is to scale the business to meet the unbelievable growth we’re seeing. Our market has grown an order of magnitude in 4 months, and we’re hoping with in 6-9 months we’ll see the same growth again. Any business going through that kind of growth simply needs cash in the bank to hire and spend ahead of growth. So that’s the basics.

Item #1 from the release is about agencies. About 25% of our business now comes through agency relationships. A number of agencies have signed up to use Trada as the way they deliver PPC to their clients. A PPC offering for many agencies in now a required checkbox when proposing a full-service solution to a client. But delivering scalable paid search is hard and expensive, especially if you need to scale it in house. Many agencies are finding that Trada is a better way to do this. As we expand into new forms of advertising (I’ll talk about this below) they see the value of being able to offer these new forms of advertising to their clients without having to build in-house expertise. Trada’s attitude is that the agency relationship with the client is fundamental. We want the agency between us and the client. So there’s a lot we have to build to facilitate this relationship and help agencies operate the way that they want to, not the way we want to. This is mostly plumbing like reporting, billing, branding, communication, etc. but these features are important items that we’re working on quickly as we grow our agency offering.

Item #2 is international. We have seen great demand for international business. This comes in three forms in our market: English speaking international campaigns, non-US companies wanting to run US campaigns, and US companies wanting to run non-US campaigns. The first form is about Canada, the UK and Australia primarily. We service some of these clients now, but it’s hard to do that from a time zone perspective. There are also small issues like currency representation, handling credit card types, etc. We’re going to get better at that and eventually put feet on the ground in some of those locations to make everyone’s lives easier. (Thank you to my sales and AM team who are on the phone at 4:30am and 10:00pm sometimes servicing customers in these time zones. The cavalry shall arrive soon.) The second type of international is something that surprised us. For example, we see many requests such as a Chinese company that has a US consumer electronics site and doesn’t have English PPC skills in house. We service these customers now but still have a lot of plumbing and support time zone issues to worry about. The third is the biggest part of going international. This is about a US company (or non-US) who wants to run a campaign in another language and locale. For example, if a US company wants to run a French campaign or an Italian company wants to run a domestic campaign in Italy. We have optimizers all over the world, and we want to leverage that to get native speaking PPC experts working on localized campaigns. You can imagine all the complexity that comes with this: localization of the app, documentation, currencies, time zones, local terms of service issues (e.g. you can advertise betting sites in the UK on Google but not in the US), monitoring PPC expert quality in various languages, call centers, etc. It’s doable but there’s a lot to do there. We’re going to start working on all of this in a very organized fashion.

Item #3 is about new forms of advertising. About 6 months ago, we had the bright idea that our model might work just as well for display campaigns as it would for paid search. The challenge of doing display well is that to optimize a display campaign against a CPA you really need to source, price, and optimize each URL (or “placement”) in the campaign the same way you’d manage a keyword in a PPC campaign. It turns out that in a world of millions of URLs (just like millions of keywords), the Trada model works really well. Display means a lot of things: content network (text ads on blogs), banner display, mobile and video. I won’t say too much here but we have some pretty killer ideas about how to innovate around the display marketplace and bring the power of this form of advertising to the small and medium sized businesses that we serve. Beyond display there are all sorts of other interesting performance based online marketing options gaining traction. The most obvious is Facebook (advertising in social media) but you can also see potential in what Twitter is doing and other companies that are trying to build sociographic targeting networks. We think what we’re doing works really well in those environments as well. Also – let’s not throw the PPC baby out with the bathwater. While the traffic is smaller, there are some other PPC networks that are interesting to us. Whether it be second-tier search engines in the US or region specific search engines (China, Russia, etc..) there’s a lot of territory in our existing patch to cover. We’ll be putting some of this funding to work on expanding that too.

When you sum this all up, what we’re trying to do is fundamentally change the experience of a small -and medium-sized business advertiser. Soon they will be able to come to Trada, state their budget and CPA goals, and then pick and choose from many different forms of advertising they think might work for their product or service. Trada will have a market of pre-certified experts in all of these categories that go to work against the advertisers’ goals. And everyone (including Trada) only gets paid when we perform against the advertiser’s stated targets. I think that’s a pretty killer value proposition. We do this now for businesses that want to explore paid search on Google, Yahoo and Bing. In the future, we’ll be adding more options to this list. We want businesses to be able to focus on what they themselves are experts in and let us worry about making them experts at online marketing. In the end, our fundamental vision is to help businesses grow through effective online advertising without having to become in-house experts or spend massive amounts of time doing it themselves. It’s a noble vision but I can see how we’re getting there quickly.

Do You Get Any Preferential Treatment from Google?

No, quite the opposite. Google has a very large and mature ecosystem of players they work with. There are many companies that are designed to help certain types of customers. Efficient Frontier is designed to help very large companies spending hundreds of thousands or millions a month. Clickable is a great solution for people that want to manage paid search campaigns themselves. The ReachLocal’s of the world are well designed for people that primarily do business over the phone at a local level and want an alternative to the Yellow Pages. We focus on a specific segment of the overall market (businesses spending between $5000 and $50,000 a month on paid search), and Google gives us no preferential treatment at all. They have great relationships with all of the players across the ecosystem, and Trada has a lot of respect for what those companies do for the customer-types they serve. This is a very big market and the needs of the customer change dramatically if you’re spending $300/mo or $3M a month.

Also, Google Ventures and Google Corporate are two different entities. It is not the charter of Google Ventures to invest in companies that help Google. If you look at their portfolio, this is actually obvious as they make a wide array of investments in many markets Google doesn’t even play in. The charter of Google Ventures, if I may be so bold to paraphrase it, is to invest in good companies that have exciting prospects.

Lastly, I will add that Google Ventures made it clear to us that we’re going to be under even more of a scrutinous eye when it comes to which customers we work with, how we build our interfaces, etc. We’ve been careful about the types of clients we work with for a while now (we don’t take supplements, rebills, etc.), and we’ll stay even farther away from any gray areas now with this investment. This will end up likely meaning we’ll have to say no to some advertising dollars that come our way. We’re okay with that and know it’s our job to play by the letter and law of the rules. This was an easy decision and trade off to make for us as our goal has always been to be a long-term player in the ecosystem

What about Microsoft and Yahoo?

We are huge fans of Microsoft and Yahoo and big believers in the Unified Marketplace. We run a substantive amount of our spend across these networks now, and it’s growing daily. Our goal, which Google Ventures adamantly supports, it to help customers get the most out of paid search. In many instances this can be accomplished simply by taking advantage of the searchers (and buyers) on Yahoo and Bing. All search engines have different demographics. Yahoo has a bifurcated demographic strong in younger markets as well as older. Bing has marketed well to attract retail and travel searchers. We encourage every advertiser in Trada’s to use Yahoo and Bing especially if they have not done so before.  In many cases, we find that there is more volume of conversions and/or lower costs of conversions in Yahoo or Bing. It depends on the campaign type and you never really know until you try. Our whole philosophy is to let the market determine the best place to spend your money and to make it really easy to find the best place to spend it. In the end, success with paid search in general means all boats rise with the tide. The more options we provide a customer to be successful, the more they invest in paid search. We talked about this a lot with Google Ventures in the early days and the consistent response we got was along the lines of “That’s great – we think advertiser’s dollars should go where they best work. Our job is to keep trying to make our products the place where that is true, but if it’s elsewhere then by all means spend the money there.”

The traditional challenge for advertisers has been how much friction (time, learning curve, cost) there is to try something new. Many of our customers haven’t tried Yahoo or Bing before. This isn’t because they don’t see value there, but because the effort to rebuild a campaign on a second network is high and all the keywords have to be repriced and optimized to that market (each ad network has a different auction which means prices for the same keyword are different on all three networks). In Trada, with one click advertisers can add any network and try a slice of their budget on Google, Yahoo or Bing (some customers have only run on Yahoo or Bing and we help them get onto Google as well). Case in point, the amount of money spent in our marketplace on networks other than Google is about 2x what their search market share is. This to me is the biggest demonstration that there is “gold in them thar hills”. If you just make it easy for people to try it, they will. And again, the more success people see with paid search, the more they invest in it across the board.

We continue to look forward to working further with Yahoo and Microsoft (and others as well) as our market grows and we hope to become a more significant member of their eco-system as we grow as a company.

Conclusion

As you can imagine, we’re very excited not only to have a great new partner to help us take Trada to the next stage of our growth, but also the resources to tackle some of the bigger opportunities we see. The paid search marketplace is massive, there are lots of different types of customers, and we fundamentally believe that for many of them bringing expertise to the table is the right solution. If you’re interested or even just intrigued by the idea, please contact us,  and we’ll walk you through how we do things.

Filed Under: Trada News Tagged With: , , ,

When Ads Become Content

June 3, 2010 By 5 Comments

Okay fine, I’ll admit I have been a bit curmudgeonly about the iPad to date. I even went as far as saying on TWiST that I thought it was going to have a great come out then sort of languish in new device category limbo. This week I finally actually played with an iPad care of Matt Cutler (@mcutler), one of my best friends and CMO at VisibleMeasures. Once I got past all the normal reactions (it’s smaller than I thought it would be, the touch interface is finicky and even a power user like Matt had to try 3-4 times on just about anything he did to get it right, great for media stuff – bad for business apps) I had an epiphany. This epiphany came from playing with the Wired Magazine iPad app .

Epiphany number one was that magazines are now dead. Whoa – not the epiphany you expected? Well the problem is that magazine formats are really just a combination of content curation and bundling strategies. If the only way you could get them was in print form in your post-box, there was nothing really to challenge them. But much like the CD, once you can unbundle the pieces and give access to them on the web, the value of the bundled format goes away. While the Wired app is extremely cool (oh you can embed video in an article) it seems to me that this is now just a web page. The fact that no one thought to embed video or voice or whatnot right into the article before seems more like an uncreative use of the Web than a creative use of the iPad. It would be incredibly easy to replicate the page flipping mechanism of the magazine format on the web if this is what people really want to do on an iPad. People are already doing this and it works much the same way. So should TechCrunch build an iPad app or just include a flipping rebundle of their website? Seems like the later would be a lot simpler for most people. Some people I am sure will argue here that when content sites were faced with the incredible growth in 3g handsets, very few successfully rewired their websites to handle the new device format (and I agree – browsing the web on my Blackberry is like sucking air through a straw). The key difference though is that the design challenge was the screen size (not in the end bandwidth or browser functionality or pointing devices or whatnot). As a content site, you had no choice but to rethink how you delivered the whole experience on a mobile phone. You don’t have that problem on an iPad. It will be interesting to see if some web-only content sites actually start to create “virtual” editions to deliver in the flipbook format. From a user’s perspective, this curation is actually valuable. When I get my copy of Wired, I do flip through it all because there is some coherency to what’s in one copy of the magazine.

Epiphany number two, which to me is much more important is that I found myself playing with the interactive ads as much as the Wired-related content. There are 3 dimension models in ads, video in ads, and all sorts of other little ideas that Wired and ad crew were clearly experimenting with. So why not do this on the web? Well the answer I think is that a) people are (e.g. interactive games) and b) when you’re “reading a magazine” you’re in a much different mindset. The ability to put someone into a mindset that is not predicated on attention-deficit is an important thing. I was focused on the magazine: that’s what I was doing. And so I actually stopped and played with the ads.

I think this is a powerful lesson and evolution to watch. What becomes interesting is how people think about content adjacency in the future of advertisements. Many of the interactive ads in Wired actually had something to do with the content they were embedded in. Much like playing with an infographic from Wired, the ad content added value to my immersive experience in the magazine.

Now let’s keep in mind that these ads are produced by people like GE and American Express. They have the budget and staff to create dedicated content for one specific edition of Wired. I spend my days working with SMBs, and they clearly don’t have the same ability. It’s hard enough to get some banner ads together to try display advertising, let alone build a 3d model as your ad content. I think all of this is changing. There are great pools of creative expertise out there (now being organized and made accessible to the masses through companies like 99designs, AdHack, AdFactory, and GenuisRocket). I encourage this evolution, and I have some ideas I will be sharing about it. For now, just contemplate the idea that ads are content. Worry about how to produce it next.

Filed Under: Advertising, Social Media Tagged With: , , ,

Stupid Analytics Tricks: Picking Display Ad Placements Based on Numbers

May 19, 2010 By 3 Comments

We use Google Analytics for everything. We track all of our inbound marketing, performance-based marketing and social media efforts. We’re lead focused, so we do our best to track how each source of traffic performs for us and through this, where we should be spending our time and energy. We use this to source PR opportunities, hone performance-based marketing campaigns, and now (I’ll explain) to do our display ad buys.

We’ve been running some basic display with Google Display Network for some time but wanted to notch up our test of display with a big site buy. So who the heck should we do a buy with? For companies like ours, there are numerous choices: the TechCrunches of the world, MediaPost publications, Forbes Small Business type pubs, vertical ad networks, etc. Rather than take a shotgun approach, we decided to look at our own data and pick some low-hanging fruit. Following a few of the steps we went through, you can do something similar for your own business.

Before you start: you must set up Goal tracking in analytics to make these decisions. If you don’t have this set up: do that first, bookmark this blog post, come back in a month and read the rest.

The fundamental question is which site has already aggregated your customer demographic for you. Clearly you want to do a buy on a site that is visited by your prospects. Start by running a simple Goal report in Google Analytics and segment by source. You’ll quickly see who is generating conversions for you. Next, take a look at two dimensions: the volume of conversions and the conversion rate. Both of these are important. If a source (let’s say TechCrunch) is generating tons of traffic but not conversions, this is not low-hanging fruit.  If a source is generating incredible conversion rates but there is simply no volume, this is probably not low-hanging fruit either. I am going to guess you have a few sites in that report that are both acceptable volume and high conversion rate.

The beauty of this data is that it will tell you two things: who has your customers and what you should expect to spend per lead based on the conversion rate. Once you’ve built your spreadsheet (see below) all you have to do is make the right creative (banner ads) and execute the buy. On the whole, you should see similar conversion rates from your display buy to what you’re seeing on inbound conversions from content (e.g. an article on TechCrunch).

I built an example spreadsheet to show you the basic calculation. You can grab the first three columns right out of Google Analytics. The next two (CPM rate and estimate CTR) you can get from the various sites you might do ad buys on (they will tell you this information as part of their pitch to you). The rest you can derive. I don’t know what your acceptable CPA is so don’t take the numbers as gospel – I am just trying to highlight the method. What you should glean from this example is that the site ABC.com is actually the best starting bet for us (unless we don’t care about higher CPA) even though it wasn’t the higher visitor traffic.

?Media Mix Display Ads

The beauty of this approach is that you can repeat it over and over again picking up new contenders for display buys as your inbound traffic changes over time. As a side note, you can integrate your PR strategy into this methodology as well. Directly targeting pubs or bloggers you haven’t reached yet (don’t see traffic from) then measure the direct correlation between visits from them and lead generation. If the numbers work (and the costs are in line) do an ad buy!

Long live metrics!

Filed Under: Paid Search, PPC Tips Tagged With: , ,

Crowdsourcing is the New Internship

May 18, 2010 By 3 Comments
Crowdrising As An Internship

Learning Through Crowdsourcing

In a conversation with my friend and crowdsourcing industry leader, John Winsor (@jtwinsor), we were talking about some of the non-obvious intrinsic benefits of participating in crowdsourcing. John runs a revolutionary agency called Victors and Spoils, which is a ground up brand-focused agency using crowdsourcing techniques to produce innovative solutions for their brand clients. They specialize in setting up crowdsourcing activities, curating the crowd they work with, and managing the results produced to the benefit of their clients.

One of the things that came up in conversation was the deep involvement and exposure that their crowds get to a formal brand-based agency process. What does that kind of a customer want? What is the expectation? How does the work process go progress from scoping to review to finalization? As he discussed this, it dawned on me that some of the members of their crowd would never have the chance to work with such clients and experience the innards of that kind of process. Only if you were an intern at a big 5 agency would you even come close to participating in that process and probably only in the sense that you got the memos of how activities were going.

As I think about Trada, I see the same thing emerge. We have all types of paid search experts in our marketplace. Some that have been doing paid search since its inception, some that have been making a living doing arbitrage off of affiliate networks, and some that have less experience with paid search having learned the art through classes or personal experience on campaigns. For newer paid search experts this provides an incredible opportunity to learn not only to the process that many different types of campaigns go through to find success, but also the communication that happens with the advertisers during the process. Whether they want to only work in Trada for the rest of their paid search career, forge out on their own to build a PPC agency, or go to work for a more formal agency, they will have had considerable experience working with clients along the way. Paid search, like any performance based marketing, is deeply coupled with learning, setting, and delivering on customers’ expectations. These expectations vary dramatically from customer to customer as the dynamics of their business vary widely. Again, this is only experience that you’d get as an intern in an agency or through an entry-level paid search job.

Crowdsourcing is the new internship.

Through crowdsourcing, whole new generations of stock photographers, graphic designers, testers and paid search experts starting out in their careers can get access to working on and with clients that they could never dream of. So while many people focus on the extrinsic benefits of crowdsourcing (making money), there are a whole raft of intrinsic benefits as well.

Filed Under: Crowdsourcing Tagged With: , , , ,

Anonymity in the Crowd

May 11, 2010 By 10 Comments
Face in the Crowd: Crowdsourcing

Does A Name With Your Work Matter? (Photo courtesy of VividBreeze)

One of the important tenets of the Trada marketplace is that all optimizers (our paid search experts) must use their real names. We thought it was very important for our advertisers to know exactly who was working on their campaign. In addition, we felt if real names were out there it would encourage them to focus on being the best they can be (as their real name appears in leaderboards [screen shot] and such).

I had an interesting conversation with John Winsor (@jtwinsor) and Claudia Batten (@claudiabatten) at Victors and Spoils on this subject. V&S doesn’t require their creative crowd to use their real names as far as submitting their work goes. They do require their creatives to sign up using their real name and V&S takes a lot of care to vet the person is who they say they are. They do this because they feel:

1)     The verification of “reality” by V&S is good enough for their clients (they are the vouch-for)

2)     A client doesn’t want to sift through everyone’s profile anyway (even if they could see it)

3)     Some excellent creatives simply can’t let the world know they are moonlighting in V&S as they work for existing agencies which may be the AOR of the client or may be a competitor to the AOR of the client

4)     V&S doesn’t want to preclude the best of the best from being in their system due to issues of having to be public about participation and the conflicts it might bring

Interestingly, some of these anonymous creatives are having great success in V&S they will inevitably want their real name to be associated with their work. For example, V&S just produced a large TV campaign spot for a big brand advertiser using their crowd and the winning creative team will be behind a massive public campaign. I can only imagine they will want to get the credit for their amazing work. So how do you handle this dichotomy?

My original stance was that most paid search agencies wouldn’t mind if their PPC experts moonlighted in a system like Trada. In talking today about this with our VP of Product Management and Marketing, Bill Quinn (@billquinn), he asked a very simple question: would you want to know if one of our engineers was doing contract work on the side. My instant answer was yes (simply because we pay our staff as full-time employees). Now that I think about it, would I care if our engineers were working in TopCoder? Maybe the answer would be “no”, I love it when people continue to refine their professional skills and these competitions are one way of doing it. So I’m split on this.

So what is the right answer to the anonymity question? All crowdsourcing companies have to grapple with this issue. Some are completely anonymous, some are completely public. In discussion Claudia said something very important to this:

“Shouldn’t a system of ratings and rankings matter more than a real name?”

In Trada, if you’re an advertiser evaluating who is (or might be) working on your campaign what’s more important: knowing their real name or seeing that they are one of the top 10 optimizers in our marketplace? Clearly most people would pick the latter.

We’re embarking on a series of extensions to our profile system in Trada. This includes the first pass at  important stats and rankings in the system (both positive stats like conversions earned as well as negative stats like rejected keywords). It will be interesting to see if over time our requirement for being public about who you are becomes less important as the merits of what you’ve done become more. In the end, it’s not your name that will get you on a campaign, it’s your results.

For now, we’re sticking with our policy knowing that some wonderful PPC experts simply won’t be able to participate due to conflicts with their full-time jobs. I promise to keep an open mind about this subject and regardless of a change, ensure that everyone in the system can live and die by statistics as the most important measure of their expertise.

Filed Under: Crowdsourcing Tagged With: , , , ,

A New Model for Newspaper Advertising: Pay Per Call

May 3, 2010 By 5 Comments

Stop the Presses: We Have a Solution

There has been much discussion about the death of newspapers and the general print news model. This industry has survived for a long time on advertising and want ads. For many newspapers, the want ads were dealt a final blow by Craigslist and its followers leaving only the display advertising portion of revenue left on the table.

To defend their territory, newspapers have been shaking the Google bushes and threatening to turn off Google’s ability to index their content (and thus direct searchers to it). Pay-for-content walls have been experimented with (most have not worked very well) and online versions have been built. While online versions capture traditional ad spend in an online form, the revenues still struggle to attain growth numbers that would make them successful alternatives to print. So what is a newspaper to do?

Enter Pay Per Call.

Pay Per Call has been around for a while, but in the recent two years it has seen an incredible growth with SMBs and local advertisers. The basic idea for Pay Per Call is that a service provider tracks inbound calls to an advertiser’s business and then charges the advertiser for the success completion of a quality phone call. Defining and managing what is “quality” is a bit of a fly in the ointment. A business may want to pay more for a call in their own area code or may not want to pay the same amount for a repeat caller. Some pay per call systems allow payment based on the length of the phone call (a problem when the caller has to listen to a 30 second voicemail before leaving a message) or more recently from companies like Yext, certain topics are present in a text-translated version of the call. Setting aside some of the difficulties in finding the right price for each phone call, consider how a newspaper could change their model.

Newspapers could include phone numbers for each of the advertisers (brand advertisers as well as classified advertisers) so they could track calls. To the end user (caller) this is a seamless activity. They talk directly to the company (not a middleman call center) and the pay per call provider simply sits in the middle. Rather than charging a fixed (and somewhat prohibitive cost) for a placement in the classifieds or ads the newspaper could charge the advertiser based on calls generated. In some instances this might vastly outperform the fixed fee of the advertisement based on the value of the call. It works because it shares risk. It also handles the secondary reader issue (e.g. each how many people pick up the same copy of the New York Times in a coffee shop on Sunday morning). I stopped using newspapers a long time ago because I just couldn’t justify the cost and the feeling that I bared all the risk here.

The same thing could be done with coupon codes or affiliatized links for websites (e.g. www.landsend.com/NYT would trigger an affiliate code). Let the newspaper participate in the sale from the customers they generate. This is just like an affiliate does on the web.

The affiliate world is only now reaching the mainstream. As more content gets created, and more links are generated on the web, websites big and small are learning that they can participate in the “referral economy” quite simply. In fact, I sit on the board of a company, VigLink, that automatically turns any blog’s or website’s links into affiliatized version of themselves. Just link to whatever you want, and we’ll do the rest. We’re trying to help anyone with content monetize it in new ways and affiliatization is a growing and powerful way to do this.

If newspapers started thinking of their pages from a monetization perspective much more like website owners did, they’d find all sorts of new ways to generate income. You don’t hear a lot of bloggers asking to shut down Google’s search engine indexes. Granted many of these bloggers don’t have full-time editorial staffs, but they do understand there are many ways to monetize content other than charging directly for it.

Filed Under: PPC Tips Tagged With: , , , , , ,

Know Your Numbers – The Achilles Heel of Small Business Advertising

April 27, 2010 By 4 Comments

Do you know your Achilles Heel?

I spend a lot of my time talking to small- and medium-sized businesses about online advertising. One of the first questions I ask them is “what can you afford to spend to get a sale?” The majority of time I get a blank stare or a half hearted “we kind of know.” If you don’t know the answer to this question, stop everything you are doing and figure it out now. The old adage in business applies here – if you don’t know your numbers, you’re losing money.

In general, there are two basic ways people end up making money with their websites: they sell something or they get a lead who  eventually they can sell something to. The process of figuring out how much you can afford to spend on each one of these is basically the same, the latter only having one more step in the process. Here’s how you do it.

The first thing you need to do is figure out what your average cost of sale is. Let’s use a simple example where you only sell one product online and it costs $75. How much of that $75 can you afford to spend on sales and marketing? This number is different for every business, but let’s say in our example you can afford to spend $25 dollars to get each sale (leaving you $50 in profit before other costs like salaries and things). This is your target CPA (cost per acquisition), and it’s what you’ll need to manage your online advertising spend.

Now let’s look at the example of a lead and how to figure out the right price you can afford for this. Let’s say you have a website that sells a pool-cleaning service. An average client will spend $1000/yr if they sign up for your service. Let’s say it costs you $500 in salaries and chemicals and all that to perform this service. You’re left with $500 of profit. Is your CPA $500? Nope. You have to figure out how many leads it takes to get a real client. Let’s say 10% of your leads actually turn into a paying client. In that case your target CPA is $50. If you spend more than $50 you’re going to eat into your profits (or even lose money). So the calculation for a lead is similar to the calculation for an online sale with the exception that not every lead turns into a sale.

I’ll say right now that there is no “right” price for a CPA. Every business is different. We see CPAs from $1.50 to $300. It depends completely on the product or service that is being sold, and how much profit there is built into the price of that product or service.

Once you have these numbers, go back to any online advertising campaigns you are running and do a gut check on what you’re spending. Many times businesses are shocked to find out they have been spending $300 to get a sale when they can only accept $50. Don’t fret, this just means that you need to optimize your campaigns. Take out those expensive keywords you’re bidding on that are not turning into sales fast enough. Drop the prices on keywords that do convert to sales but are slightly over the cost you can afford. And make sure you’re spending your money in the right places (for some Trada customers Yahoo is actually much cheaper to acquire a customer on than Google).

A little calculating up front and a bit of work afterward can quickly get you back to using online advertising in a profitable way!

Filed Under: SMB Marketing Tagged With: , , ,

3 Problems With Keyword Generators for Small PPC Campaigns

April 26, 2010 By 1 Comment

A common question I get when explaining the value of Trada’s collaborative PPC campaign approach is “Can’t I just use a keyword generator to find all the keywords I need?” Businesses new to paid search are always looking for shortcuts and ways to make their PPC campaigns more effective – so it’s not inherently a bad question. My response though is always, “have you used one and what were the results?” I can say that 100% of the time the answer is that the inquirer has not used a keyword generator tool before (and thus never felt the wrath that these tools can incur).

There are lots of different keyword generators and suggestion tools out there:

And a host of others…

While I am not throwing all keyword tools under the bus (or the use of them) there are some serious things you need to watch out for when using keyword generators. These issues are exacerbated when you have a relatively small monthly budget (<$2000).

Problem #1: Unapplicable Keywords

All keyword generators let very unapplicable keywords into their final data sets. While the tools have gotten much better over the years, if you don’t take a look at every keyword and consider its applicability to your campaign, you’re going to load up some landmines. I always work from the basic premise that some users will click on any ad no matter what search result was typed in or what the ad says. This is the lazy/unknowledgeable user problem. If you don’t believe me, put an ad into your PPC campaign for Crystal Stemware with the keyword “Britney Spears” and watch the clicks rack up (until Quality Score beats you down).

Solution #1:

Review every keyword you want to use from a generator before you upload it to your campaign. There is simply no way around this activity.

Problem #2: High Demand, Very Broad, Low Converting Keywords

Keyword generators work by building semantic models of what people search on. This does not necessarily correlate to buying intent. Most keyword generators will produce somewhat general keywords even though they may be 3 to 4 words long. This is natural because the semantic models are influenced by what is searched on the most. The problem is these search terms are general because people don’t refine their searches on the first shot. In addition, they are the most susceptible to very wide interpretation by broad match (which is the default format most keyword generator tools let you load into Excel). So you’ll get caught in that net. In addition, general terms are more expensive in paid search markets like AdWords. So you’ll be spending a lot of money on these keywords with relative low conversions.

Solution #2:

Start all keywords that are taken from a keyword generator as phrase or exact match. While this will reduce your volume up front, you’ll prevent a lot of unwanted broad matches from chewing up your budget before you can put in negatives. You should selectively add a broad match or two to each ad group to try and fish for related ideas you had not thought of, but phrase and exact match will likely constrain your clicks to more relevant terms. This should drive higher conversion rates and lower costs.

Problem #3: Chewing Up Budget

The final problem caused by the two mentioned above is that a lot of very general broad-match keywords in a small budget campaign will simply elbow out all of the more sophisticated long-tail keywords that could be converting well and thus highly profitable. If you’re spending $1,000/mo, that’s only $33/day. If you are in a keyword space that is on average $2/click (there are many categories that are this expensive if not more) then you’ve got $17 tries a day. If your keywords are very general, it will be easy to spend your whole budget on terms like “business software” or “marketing companies”. Even a few bad broad matches can eat you budget before 10:00am every day. You’ll never learn anything about what your actual customers are really searching for when looking for your unique products or services.

Solution #3:

Start your campaign carefully with phrase and exact match. Be willing to pay a bit more for these as they will likely convert better for you.  If you are not getting the volume you need, start dropping in some of the broad match keywords you think apply. Price them down until you understand how broadly the search engine will match them. Some broad match keywords only ever match search terms exactly; some are widely varying. Look at the search results related to those broad keywords and then work them back into your phrase and exact match while bidding down the broad match keywords and adding negatives. The key here is to proceed with caution lest you burn a lot of money with no results.

In the end, you’ll find that keyword tools are very useful for new ideas but very dangerous as export and upload mechanisms. Good paid search takes time, review and lots of optimization. If a keyword generated campaign seems too easy to be true, it probably is.

Filed Under: Keywords, PPC Tips Tagged With: , ,

The Googlization of Business

April 19, 2010 By 2 Comments

Can Small Businesses Build What Google Needs?

Recently Google announced they would be using website speed more heavily as a “signal” in their ranking methodology. “Signal” is just a nice way of saying “important variable”, but it also indicates how Google thinks about the world. They believe that there are a certain set of things that “good” websites (and thus “good” online business) do. One of these is make sure their user experience does not suck because a business’s website is slow.  Another is to make sure businesses only place PPC ads on keywords that are relevant to their products (this was the genesis of AdWords Quality Score). While all of this is not a bad thing (and Google is not the only company that is driving these kinds of changes), there are some potential downsides.

The downside argument came to me after a discussion I had with some friends about Google’s SEO algorithms, and how there is a small element of Orwellian doublespeak that is creeping into online content production. For example, a basic tenant of SEO is that your content should include lots of keywords that are relevant to your topic. That’s all fine and logical but in the inevitable competitive marketplace that emerges from rewarding those who rank more closely to the top in organic search, it’s actually changing the way people produce content.

I am reminded of a hilarity and tragedy in the opera world I witnessed. My father is an opera conductor and has many times in his career collaborated on and conducted world premier operas (e.g. Anna Karenina at Opera Theater of St Louis). Yes, I think my dad kicks ass. That set aside, what was funny to me was watching a collaboration between he, David Carlson (the composer) and Colin Graham (the librettist) on the score. At one point my father said something tongue in cheek, “Union rules require us to get the orchestra in and out in 3 hours. If we go 15 minutes over we have to pay double time and this will significantly change the cost of the production. So should we just play faster or cut something out?” In the end, they did cut parts of the opera out, simply because of union rules. How’s that for constrained artistic expression?

I’ve read numerous articles about how to SEO a Press Release (e.g. pack it with keywords that you want to be highly listed in). We also have started at Trada to change our website, content, and create specialized landing pages packed with keywords to get higher rankings in Google and also better Quality Scores (and thus less costly clicks and conversions in PPC). While Google allows for some creative freedom in content, there is definitely a penalty for being too verbose or too general about content you are writing. One does wonder where the logical conclusion of this strategy takes all of us.

Enter a small business into the equation. Most small businesses are simply working their asses off to make their products or deliver their services as best they can. The thought of competing in a global marketplace of advertisers who are constantly trying to outgame them in SEO, PPC, link building, etc. blows most of their minds. In the old days, SMBs were about picking a good location, putting up some signage, getting a yellow page ad and then trying to do the best you could for anyone who walked in your door or picked up your phone. Not anymore. You have to have a content rich website, blog heavily, do social media, get links back to you, manage your listings in Yelp (the new BBB), SEO your site and now make sure your site is fast enough to be considered a good business.

I’m not sure how I feel about all of this yet and how real it really is. A big part of me likes the idea of a gigantic free and competitive marketplace, but part of me also knows not everyone has the same ability (skill, money, or time) to compete in this market. Maybe what I am witnessing is simply a maturation of the Internet where everything needs to grow up a bit. People who want to run businesses need to understand this is the reality (and opportunity) they now live in. Universities need to change their curriculum to teach the next generation of business leaders, marketers, sales people, and executives how to survive in a data-driven, competitive landscape of this sort. And of course new tiers of players (such as Trada) need to emerge to fill the skills gap that will always exist between those who can afford the expertise and those who have to compete against them on a shoestring.

Either way, the times they are a’changing. And for good measure: Google, doublespeak, AdWords, SEO.

Filed Under: Paid Search, SMB Marketing Tagged With: , , ,
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