When it comes to online display advertising, there's a divide between companies too small to afford good campaigns and those wealthy enough to pay digital shops to launch and manage them. Seattle-based Hidden City Games is a good example of a company in that gulf, yet it recently managed to use display advertising effectively to lower its customer acquisition costs.
Hidden City was founded by Peter Adkison -- the creator of the trading card game "Magic: The Gathering" and the man who brought Pokémon to North America. It operates a virtual world called Bella Sara for horse-loving 5- to 13-year-old girls.
Last year it began using ad platform AdReady -- which helps customers create and optimize display campaigns. The goal was to drive awareness of the game and traffic to BellaSara.com, according to Dell Monson, Hidden City Games' senior marketing director.
Hidden City Games' in-house creative team built an initial creative Flash ad that was brought into the AdReady system. "We turned it into templates that could be altered," said Jamie Lomas, AdReady's VP of sales and strategic partnerships. "Once in a template, it then goes into the tool and can be customized very quickly. Over the top of that integrated environment we have algorithms...that make automated recommendations such as, 'You should pause this ad because it's underperforming.' It automates a process that, typically, an ad agency would have planners doing."
Monson said it didn't take long for customer acquisition costs to decline as Hidden City Games determined which ads and ad placements were working and which should be altered or jettisoned. At the outset, Hidden City Games was paying a cost per acquisition of more than $3. Within a month, she said that figure dropped to about 84 cents.
Monson said Hidden City Games tried other display ad systems but found them too complex. "We tried running display ads through Google and they were not successful," she said. "They took a lot of manual work and resources in watching them and changing campaigns out and we haven't been able to successfully do that."
Hidden City Games is now spending about $25,000 monthly on display ads, and about 40 percent of its ad budget is spent online depending on the time of year. "Early in the year, we drop it by about $10,000," said Monson. "It will come up again around Easter."
Although it also is involved in video marketing and search ads, Hidden City Games is placing its bets primarily on display. "For our brand, display marketing is the most successful way to go," Monson said. "We've done mommy bloggers and viral, but the cost to acquire new consumers is just so much more effective with AdReady and what we've been doing with our display ads."
The company recently partnered with Amazon to launch an e-commerce site and is running display ads to support it. Monson said the ads seem to be bringing "significant growth" to the site. "We have games and toys and books and clothing, so the Bella Sara brand has grown exponentially in the last year and we are focusing our display ads on brand awareness, not just product awareness."
June 20, 2013
1:00pm ET / 10:00am PT