Google’s investment in Trada, a company that uses crowdsourcing to manage SEM accounts, raised some eyebrows in the SEM community this week. Is this part of a grand conspiracy to crush 3rd party SEM agencies? Is this an acknowledgement of Google’s failings internally at providing quality advice to clients?

My sense, simply put, is that it is not the former, and probably not the latter either. Let’s start with the first theory: Google wants technology/outsourcing companies to replace agencies. This is the classic “man versus machine” debate that has occurred since the dawn of the industrial revolution. What we’ve seen over time is that machine beats man when it comes to rote processes and man beats machine when it comes to ingenuity and thinking. The Model T production line replaced hand-building cars, but strategic consulting firms like McKinsey and high powered law firms and lobbyists continue to thrive despite great technical innovations.

Crowdsourcing may well be a way for top consulting firms to improve efficiency by outsourcing some menial tasks to the masses, but crowdsourcing cannot replace good strategic thinking and advice. Just as black box bid management algorithms cannot operate independent from a smart operator, crowdsourcing of keyword creation, bidding, and the like will always be beaten by crowdsourcing combined with smart management.

OK, theory #2: Google thinks crowdsourcing can outperform their internal teams. I doubt this one as well, mainly because I don’t think Google has enough self-awareness to realize that a large part of their AdWords support organization is largely useless to SEM experts. If they did, they would lay off about 90% of their staff in this department and use Trada to help clients, or just come up with more instructional videos.

My theory on the Trada investment revolves around the myriad of ‘local’ SEM companies out there – companies like ReachLocal, Yodle, and Orange Soda. These companies emphasize “quantity over quality”, meaning that they do an average job for thousands of clients, rather than a great job for dozens of clients. Inevitably this means that many clients end up pretty disappointed. Disappointed clients – especially SMBs just dipping their feet into SEM – may decide that the problem was not with their local agency, but rather with the very concept of SEM. As a result, they may decide to not only fire their agency, but give up on SEM entirely.

That’s a big problem for Google, since SMBs collectively can drive huge revenue and are still largely untapped. Moreover, Google definitely does not want to serve these companies through their AdWords support team, as this would not be cost-effective. The answer may well be a company like Trada, which can displace the poor service of local agencies without breaking Google’s support infrastructure. That’s a win-win for Google.


  1. Terry Whalen July 26th, 2010

    Hey David, thanks for the post. After the Google Ventures investment announcement I went ahead and signed as a Trada optimizer to get a look behind the curtain. I spent about 45 minutes on the platform, “joined” a couple campaigns, and put up an ad group with some keywords and ads. On a scale of 1-10, 1 being very silly, Trada was about a 3 – about what I expected. But that is in the context of professional SEM account management. From the standpoint of SMB’s and local businesses, maybe at some point Trada could find some success.

  2. davidzhawk July 26th, 2010

    I haven’t played around with the interface but what you describe pretty much sounds like what I expected.

    And maybe they will get more sophisticated over time, but I find it hard to believe that crowdsourcing can replace a seasoned account manager dedicated to your account. It can supplement but cannot replace.

  3. Dave Schappell October 12th, 2010

    I look forward to our discussion tomorrow, as we’re also considering Trada vs. working with a professional such as yourself/PPC Associates. I’m totally happy to be convinced — in the end, my ultimate goal is focusing on our unique core competencies, and I’m quite positive that we’ll never be experts at SEM, and can work well with the right partner.

  4. davidzhawk October 12th, 2010

    Hey Dave, I fully support crowdsourcing for many tasks – in PPC and in other areas. I suspect that Trada will be able to reduce cost and perhaps even increase results for certain aspects of PPC management like basic keyword research or basic account set up.

    But I believe that SEM is “easy to do, hard to well” – like many things. Anyone can write a news story, but few people become Thomas Friedman. Anyone can teach a class, but few people become Jaime Escalante. And anyone can do basic SEM, but few can consider the overall strategy that combines keywords, bids, ad text, landing pages, search engines, account structure, targeting, tracking, and positioning to maximize results.

    Ironically, Trada comes many years after Efficient Frontier – the “black box” SEM campaign management technology company that attempted to replace humans with technology. Now we are at the other extreme, that masses of humans can replace experienced humans. Either extreme has some benefits, but is not by itself a solution!

  5. AffordableWeddings December 26th, 2010

    Hi David, thanks for the post.

    I agree with @davidzhaw — “Anyone can teach a class, anyone can do basic SEM, but only very few can consider the overall strategy that combines keywords, bids, ad text, landing pages, search engines, account structure, targeting, tracking, and positioning to maximize results.”

    Unfortunately Trada doesn’t deserve more then 3 or at max 4. But the good thing is that it can’t be any worse, it only can improve and go figure it can even have some success later on in the future.

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.