After years of feeling the pain of increasing market costs and reduced results, I’m convinced we’re about to see a revolution.

Businesses had always relied on traditional advertising, like billboards, television, newspapers, and radio. 

These were characterized by a lack of targeting, and knowing which thing created which results was difficult, if not impossible.

And then came digital advertising.

It was cheap.

You could target specific people, whether in a certain stage of life, location, or even people who were looking for the exact thing a business offered.

The cost to acquire a customer dropped, and serious advertising became viable for small, medium, and startup businesses.

Paradise had been discovered.
Everyone joined in. A marketing gold rush had begun.
Those in early who found rich claims succeeded. They established their brands, loyal customers, and high margins. The later a business joined, the less space was left to claim in the consumer’s mind.

On Google and Facebook, there is little unclaimed space left, and any space that is left can come with a hefty price tag in both the bid for the space and the creation of ads.

But businesses aren’t going back to traditional creative, they’re marketing budgets are still growing (7.8% between Feb 2012 and Feb 2022), while the share going to traditional advertising is shrinking (by 1.4% over the same period).1

That means digital advertising is becoming more and more competitive.  

If you’re Coca-Cola or McDonalds, you can afford to hand the marketing department $334.5M and not be too worried about which dollars are wasted and which produce a return on investment, as long as they produce a return overall.

For small and medium sized businesses, that isn’t an option. A few months of wasted budget can create a situation in which you’re closing your doors or at least having to tell some of your employees that they aren’t employed, while telling other employees their workload (but not pay) just increased. 

The way we see it, there are 3 major issues facing small, medium, and startup businesses when it comes to getting their marketing right.

  1. Traditional advertising is a money pit built to service big brands. Why would the account rep worry about the small business with the small budget when McDonalds or Ford is on the other line? So your ad is given “premium” placements and you’re charged by the number of people who could have seen the ad (not the actual results of your ad).
  2. Marketing is art informed by science, but the science has been lost to all but a few (despite the common claim about “data-driven marketing”). Creative and branding agencies and their clients fall in love with the expensive and shiny creative, investing massive expenditures into its production, without any clue about the ability of the creative to turn a profit.
  3. The bidding system is a black box without accountability. SMBs bid for the same space that McDonalds and Wal-Mart do, but the precise mechanisms that determine where the bid starts and who wins are hidden from public view. No one knows if that $45 click was bid that high, or if the FB/Google just told you it was.
And so we created the CERVAD Trading Desk – a marketing ecosystem scientifically designed to make digital marketing work for SMB (small & medium businesses). But first, let’s get specific about why businesses are struggling so hard with traditional and digital marketing.

Into The Weeds: The Money Pit of Traditional Advertising

Traditional advertising may be effective for enterprise business with large budgets, dedicated data science teams, and a loyal customer that will pay them whether they like the marketing or not. 


But for small, medium, and startup businesses (SMSB), going that route is begging for trouble.


Sure, an SMB can buy the ad space in traditional advertising like billboards or television, but it’s difficult to know if those ads are working unless data-collection and analysis methods have been painstakingly designed and implemented. If the marketing strategy didn’t mention “statistical analysis”, “control”, and “treatment” and you’ve got traditional advertising, you’re probably feeling the pain of high costs and low returns. 


At the core, the problem of traditional advertising is one of business model and execution. The system was designed for large enterprise advertisers (who can pay more and deliver larger profits to the creative agencies). This leaves SMBs with their direct-response advertising competing against enterprise-level branding campaigns. 


Direct response is what you use if you want someone to buy your product now. Many SMSBs can’t wait 2 years for their advertising to pay for itself, they need new business yesterday. Brand campaigns are what you see on SuperBowl Sunday, the funny and sometimes thought provoking ads that aren’t designed to get you to act, but to feel, and create a positive association between that emotion and the brand. 

Just feeling emotions doesn’t require work on the part of the prospect, unlike direct-response, which requires the person to visit a website, dial a phone number, drive to a store, pull out their credit card, and maybe talk to a sales person. And if your prospect doesn’t have the time and motivation at the very moment to do what you want they simply won’t. And then they’ll probably forget about your ad a few short minutes later.

Direct response can be effective, but it’s significantly more tactical and often requires more exposure.

So the design, and the business model, both offer unfair advantages to big brands and big budgets. 

Despite that, traditional advertising will always sell you “premium” inventory and promise a certain number of views or impressions at those premium prices. You can easily see through the marketing in the term “premium” with this simple exercise: next time, ask them for subpremium inventory (spoiler alert: they don’t have any).

So let’s say you save up for an advertising campaign from a traditional creative agency, you know, the MadMen kind. You save and finally break open your piggy bank and go to the pros, the ones who have had offices on Madison Avenue since Speakeasies were illegal.

They put together a pitch and make bold promises. Through a storyboard, they explain how the design and copy will establish you as a leader in. whatever. You hand over the remnants of your piggy bank and they get to work.

Just feeling emotions doesn’t require work on the part of the prospect, unlike direct-response, which requires the person to visit a website, dial a phone number, drive to a store, pull out their credit card, and maybe talk to a sales person. And if your prospect doesn’t have the time and motivation at the very moment to do what you want they simply won’t. And then they’ll probably forget about your ad a few short minutes later. 

Direct response can be effective, but it’s significantly more tactical and often requires more exposure. 

So the design, and the business model, both offer unfair advantages to big brands and big budgets. 

Despite that, traditional advertising will always sell you “premium” inventory and promise a certain number of views or impressions at those premium prices. You can easily see through the marketing in the term “premium” with this simple exercise: next time, ask them for subpremium inventory (spoiler alert: they don’t have any). 

So let’s say you save up for an advertising campaign from a traditional creative agency, you know, the MadMen kind. You save and finally break open your piggy bank and go to the pros, the ones who have had offices on Madison Avenue since Speakeasies were illegal. 

They put together a pitch and make bold promises. Through a storyboard, they explain how the design and copy will establish you as a leader in.. whatever. You hand over the remnants of your piggy bank and they get to work.

Just feeling emotions doesn’t require work on the part of the prospect, unlike direct-response, which requires the person to visit a website, dial a phone number, drive to a store, pull out their credit card, and maybe talk to a sales person. And if your prospect doesn’t have the time and motivation at the very moment to do what you want they simply won’t. And then they’ll probably forget about your ad a few short minutes later. 

Direct response can be effective, but it’s significantly more tactical and often requires more exposure. 

So the design, and the business model, both offer unfair advantages to big brands and big budgets. 

Despite that, traditional advertising will always sell you “premium” inventory and promise a certain number of views or impressions at those premium prices. You can easily see through the marketing in the term “premium” with this simple exercise: next time, ask them for subpremium inventory (spoiler alert: they don’t have any). 

So let’s say you save up for an advertising campaign from a traditional creative agency, you know, the MadMen kind. You save and finally break open your piggy bank and go to the pros, the ones who have had offices on Madison Avenue since Speakeasies were illegal. 

They put together a pitch and make bold promises. Through a storyboard, they explain how the design and copy will establish you as a leader in.. whatever. You hand over the remnants of your piggy bank and they get to work.

Several long months later, your new ad campaign launches! 

And absolutely nothing happens.

Why?

Because while they’re masters at the “art” of marketing, they lack acumen in the “science” of marketing. You see, marketing is art informed by science. Creativity is put into the world, and the science informs whether or not your target audience thought it was as good as you thought it was.

Often, it’s not. Advertising, like most things in business, follows the Pareto Principle, 80% of your success will come from 20% of your tries. If only you knew which 80% of things not to try…

Now, if you’re a big brand with a big budget, you can run focus groups before you launch your creative to have an idea about performance before you invest heavily in production and ad placement. A focus group can set a business back $4,000 – $12,000, but if your focus group doesn’t like the pitch and your agency has to come up with another idea, that’s $4,000 – $12,000 each time, and remember what we said about the Pareto Principle (on average, you’ll need 5 focus groups each time). That’s $20,000 – $60,000, just in pretesting. 

For an enterprise business, that’s a drop in the bucket. 

But for an SMSBs, that’s a year’s salary for someone. 

So what is a small, medium, or startup business to do?Well, there’s a plethora of marketing agencies out there, why not just find one on Google and hire them?

SMSB Digital Marketing - The Creative Trap

The problem is that anyone could take a 2 week course on marketing and call themselves a professional digital  marketing agency. As professional marketers with decades of experience, we estimate that about 90% of marketers in the SMSB space have no idea how to drive actual results. And even if they did, the agency model is fundamentally broken.

Quickly Google “small business marketing agency” and see how many results come up (it’s 430,000,000 for me). That’s 100M more results than there are people in the United States.

With so much competition, it’s a race to the bottom on price. Agency margins are very very small, and while all businesses’ largest expenditure is typically labor, agencies spend more on labor than most other businesses. This means that investment in training at most agencies gets smaller and smaller while the price goes up and up.

This means the SMB agency model has to be focused on the quantity of jobs they can charge for, and not the quality of business those jobs bring to the client. Afterall, as long as they can make the SMB think “it will work eventually” they can keep charging.

There’s always another SMSB who is dissatisfied with their current agency willing to try anything or anyone else to finally see results. It’s not unusual to see an SMB hire half a dozen agencies at the cost of several hundreds of thousands of dollars before finally giving up.

Essentially, most of them are focused on the perception of value, not delivering actual value.

This leads them to using the creative trap: Entry and mid level graphic designers and copywriters are relatively cheap to hire, and can produce some really stunning looking work that impresses clients. Their work isn’t pre-tested for scalability, or target market reaction, or its ability to turn a profit.

But it does look really good. And because it looks good, people assume it will work so they order more.

And before you know it, there’s an entire brand, including the logos, images, fonts, colors and feel, that’s fully developed, and has never even been tested for viability.

So what happens if the target market doesn’t like the creative?

Better hope you have another funding source.

The Black Box of Digital Marketing

One of the big differences between buying ad space in traditional advertising and digital media is the way you actually purchase the ad space.

In traditional advertising, you talk to a salesperson who quotes you a certain amount to show your ad of a certain size in a specific number of places on a specific product. If you pay, you get exactly that.

But digital advertising works on a bidding system so you have the opportunity to get real market rates (or at least, that’s the pitch).

You and other advertisers all want the same piece of real estate for your ad. So instead of selling it to one entity and telling the others “maybe we’ll have room next time” Facebook, Google, and other properties have developed a bidding system. Simply put, whoever is willing to pay more gets it, and if your ad is of such high quality that it improves the experience of the user, they’ll give you a discount (so you can show your ad more often and the user experience improves, which keeps people on and seeing ads, and the company making money). 

Sure, Facebook, Google, and other platforms have explanations about their bidding system (Facebook’s bidding system is notoriously difficult to understand), but there is no 3rd party verification or transparency. If you paid $4 for a click (Google) or $65 to show you ad to 1,000 people (Facebook) you have no way or knowing whether that’s actually where the bid was driven up to, or if FB/Google just decided to pad their profit margins a bit.


And with the advertising gold rush and more businesses than ever trying to advertise online, those bids are going up every day. The average cost per click on Facebook has gone up 63% since 2015, and continues to increase (especially now that more businesses have gone online because of COVID). But even though the costs increased, at least the targeting was so good most businesses could still make a profit.

But then back in April of 2021, Apple and Facebook got into a tech war, and that sophisticated targeting marketers had come to rely on became incredibly difficult and expensive to leverage, if it existed at all.

Oh, and Google is being sued by the DOJ and eight US states for antitrust violations (basically, they’re making it very difficult for others to compete and decrease the costs of digital marketing).2 

So bidding and real time data is certainly better than the previous two options, but there are still some major weak points (you have to have the technical skill to do it yourself, or find the rare competent agencies who will do it on your behalf without eating your entire profit margin). We’ve seen more than a few businesses fail before they got those problems fixed.

How we learned and adapted to create marketing that provides consistent business

If you’re an SMB, it might feel hopeless, and we thought that, too. But then we shrugged it off and developed a solution: the CERVAD Trading Desk.

What is it? 

It’s a system designed to bring accountability to the “black box of bidding”, restore the sophisticated targeting we once had before Facebook and Apple started fighting, provide multiple opportunities for testing and proofing, and it produces a wealth of data from which we can make good decisions.

It’s like a stock market trading desk, but for ads.

Most businesses think that you’re limited to Google, Facebook, LinkedIn, and TikTok for your digital marketing placement, but that’s not true. The real opportunity for placement is about 20 times bigger.

We have 20x the placement opportunities of Google and Facebook, and we have 3rd party verification of the bidding system, so you can know the price you pay for an ad placement is the actual market value, not the “FB/GOOG’s board wants to see more profit” price.

And it offers significantly more targeting options than Facebook and Google (helping to bring back the golden era when mediocre ads still worked well because the targeting was so on point).

It’s been an open secret of the enterprise businesses who have an interest in keeping it quiet to keep costs low, but now, we’re opening the open secret up to the public, and giving SMBs a chance to compete on the same level as the enterprise-level businesses.

This means that through CERVAD trading desk you have access to the premium inventory that wasn’t sold, backed by 3rd party verification of the bid and placement, with pinpoint targeting from more than 30 data and audience partners, and actionable results data about the results so everyone knows what works, what doesn’t, and what to do next.

Our team of expert traders at the desk consistently strike the ideal balance between price and effectiveness in terms of your ad placement, which lowers the cost of customer acquisition.

We’ve regained access to the sophisticated targeting that was once available on Facebook and Google before the Cambridge Analytica data scandal.

You don’t have just one audience for your product or service, you have many. And the messaging, creative, and offer can be fine tuned for each audience to deliver an offer they’ll have a hard time saying “no” to. 

So not only do you get a consistent flow of leads and sales, but it comes with crystal clear reporting, accountability, and insight. 

It’s also safer. Every business owner or Chief Marketing Officer has heard horror stories of Facebook or Google accounts suddenly hacked or suspended without cause with the entire marketing ecosystem destroyed overnight. 

Our trading desk works on so many ad exchanges simultaneously, that even on the off chance one publisher does decide to shut someone down, the thousands of other publishers are still going strong (and you’d be unlikely to even notice a change in performance). 

Which leads us to key performance indicators, which are the things you really want from your marketing. For most businesses, that’s going to be quality leads or sales. As long as they’re getting one of those, they don’t really care how many impressions or clicks an ad got. 

A business owner just wants to know how much business it brought in, how much revenue it generated, and how much it cost to get that revenue.
Having such a robust targeting and data collection platform allows us to laser focus on the things that drive results while scrapping the things that just waste time and money. 

When you combine all of these advantages with our advertising strategies (which are all based on the scientific method – we even run full double-blind studies, just like pharmaceutical companies do), you end up with a self-sustaining marketing machine.

You can get rid of your “marketing budget” because you’ll end up with an ATM instead. In a digital landscape dominated by advertising giants, the CERVAD Trading Desk is a game changer for small, medium, and startup businesses. It offers a promising alternative that enhances reach, transparency, and control in the advertising process. Our technology goes beyond the confines of traditional digital marketing, penetrating untapped spaces, providing verified bidding systems, and delivering unprecedented access to wider demographics. By bringing accountability to the notoriously opaque ‘Black Box of Bidding’, the CERVAD Trading Desk is empowering SMSBs, leveling the playing field, and sparking a revolution in the digital advertising industry.

Stop being frustrated by advertising, and leverage it instead. 

Get a free consultation with CERVAD, and let us show you what competent marketing can accomplish. 

Sources
  1. Moorman, Christine, et al. “Why Marketers Are Returning to Traditional Advertising.” Harvard Business Review, 29 April 2022, https://hbr.org/2022/04/why-marketers-are-returning-to-traditional-advertising. Accessed 1 June 2023.
  2. Armstrong, Mark. “Google sued over allegations of monopolising online advertising.” Euronews, 25 January 2023, https://www.euronews.com/2023/01/25/google-being-sued-in-us-over-allegations-of-monopolising-online-advertising. Accessed 1 June 2023.

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