Google Takes Stake in Paid Search Company Trada

Trada, a marketplace for paid-search consulting, has a special investor in its new $5.7 million third round of funding: Google Ventures (s GOOG). While the venture arm is largely independent from its parent, this portfolio company strikes awfully close to Google’s core business in search advertising.

Boulder-based Trada takes a crowdsourcing approach to matching search-ad optimization experts with small-to-medium advertisers. What’s cool here is the business model: The service is essentially free to advertisers. Trada matches experts with participating advertisers and sets them to work dreaming up keywords for campaigns on Google, Bing (s MSFT) and Yahoo (s YHOO). The “optimizers” get to keep whatever difference they make, minus 25 percent for Trada. (So if an advertiser had budgeted $20 and an optimizer achieves the same clicks or conversions with $18, the former earns $1.50.) Multiple optimizers work on the same campaign at the same time.

Since officially launching in March, Trada has garnered 200 advertisers and 500 participating paid-search experts. Typically, 25 optimizers work on a campaign, dreaming up an average of 6,500 relevant keywords (since you only pay for a search ad when it works, exploiting the long tail is in an advertiser’s favor). Trada’s top optimizers are now earning close to $5,000 per month on the service.

Trada has raised a total of just under $8 million in the last two years, mostly from the Foundry Group. The company said it doesn’t expect any preferential treatment or early access from Google. But there’s obviously a significant overlap in interests here. Today, Google accounts for 60 percent of advertisers’ budgets on Trada’s marketplace (Yahoo is 30 percent, and the just-launched Bing integration is 10 percent). And Google obviously benefits any time an advertiser finds increased value in its ad network.