The Demand Media of Search Engine Marketing, BoostCTR, Raises $1.6 Million

San Francisco-based ad platform, BoostCTR, announced today that it has closed a $1.64 million seed funding round led by a group of institutional investors and angels, including Javelin Venture Partners, Metamorphic Ventures, Founder Collective, WGI Group, and 500 Startups. Managing Director of Javelin Ventures Jed Katz and Metamorphic Ventures Partner David Hirsch will be joining the company’s board of directors.

BoostCTR is a text-ad optimization tool designed to help advertisers boost their click-through and conversion rates by crowdsourcing ad content to a stable of expert copywriters. It works like this: Advertisers sign in to BoostCTR’s dashboard and authorize it to connect with their AdWords account. They then choose the ads that you want to optimize and create contests based on your selections, in which BoostCTR’s bullpen of copywriters compete to write targeted text for those ads.

From there, the company’s automated testing software manages the entire contest process, using advertisers’ AdWords analytics to find the most lucrative ads and setting those ads as the baseline against which new ideas are compared. Advertisers can accept, reject, or modify new ads created by BoostCTR copywriters at any time.

To address security and privacy concerns, copywriters aren’t allowed access to client accounts, they only see the contest pages created for the ads the advertiser chooses to optimize. The writers can then opt in to the contests and, if the ad the writer creates outperforms the ad’s prior iteration, they get paid based on the price set by the contest, usually around $25 per contest.

The BoostCTR model is based on the understanding that advertisers — especially enterprise — wants to be able to test their ads frequently, based on performance, but often lack the resources to do so. BoostCTR allows enterprise advertisers, search engine marketers, and small businesses to outsource and optimize the creation and testing of ads in realtime without having to devote a lot of time or resources to the process.

Traditionally, only large corporations and online marketing agencies have had access to professional ad copy writers, so BoostCTR hopes to democratize ad optimization by giving everyone access to expert copywriters for a monthly subscription fee. The subscription fee is to purchase a number of credits, which are priced between $60 and $90 a month. Each credit starts an optimization contest for a new ad group. If advertisers don’t like the content BoostCTR’s writers are producing, they get their money back. And, if the company can’t produce a better ROI for a particular ad within 10 attempts, advertisers are reimbursed.

According to CEO David Greenbaum, the copywriters follow an application process and are required to take this test before being screened by the company. So, while the process is designed to allow both freelance and employed copywriters make some extra money on the side — and to free content creation up to a larger audience — advertisers won’t just be receiving content from any random person with a computer.

This screening process doesn’t completely allay my concerns that BoostCTR won’t just become a farm for search engine marketing and ad optimization — what Demand Media is for SEO content production. Certainly, there can be wisdom in the crowd, but there’s inherently a leap of faith you have to make outsourcing your ad optimization to a crowd of unknown freelancers, rather than to a trusted agency. Demand makes it fairly easy to be accepted as a freelancer, and while I am happy several people I know are earning a living thanks to the company, loose approval policy doesn’t instill confidence in the customer.

BoostCTR is also entering a space already inhabited by Trada, which requires its copywriters to be AdWords certified and to complete a 45 minute exam. Trada also has the backing of Google Ventures, who invested $5.75 million, so BoostCTR has its work cut out.

On the flip side, seeing as Trada draws from a more “curated” crowd, it will be interesting to see if BoostCTR’s less constrained crowd of copywriters proves to be more effective. If the company adds a large stable of writers, perhaps the more-hands-on-deck model could provide better content in the long run. But that requires a leap of faith that we living in the Demand Media era are hesitant to make.

Of course, if the company can live up to its claims that it provides advertisers with a 30 percent lift in click-through rates and sales volume, I’m sure they will find at least a few welcoming clients. Trada has proven that outsourcing ad optimization can be a successful business, and perhaps, as the company hones its strategy, it could position itself to become the go-to optimization source for Facebook or other AdWords competitors.

Speaking of AdWords competitors, when asked how BoostCTR will use its first round of funding, Greenbaum said the company is looking to expand to include the ad platforms of Bing and Yahoo and to integrate with bid management platforms. It also plans to build an API to allow third party developers to tap into its network of copywriters, as well as to further sharpen the algorithms that it uses to match writers to contests and track their performance. “We want to build the equivalent of Google’s ‘quality score’ for writers”, the CEO said.