Breaking down HostGator’s $919.2K ad spend: How the web-hosting provider is using strategically-crafted campaigns to stand out from their competitors.

 

HostGator is a Texas-based provider of shared, reseller, virtual private server, and dedicated web hosting, founded in October 2002 by Brent Oxley (then a student at Florida Atlantic University). HostGator had reached 200,000 registered domains by 2006, and their first international office was opened in Ontario, Canada.

After reaching 100,000 customers in 2008, HostGator began providing unrestricted disk space and bandwidth as part of all hosting packages. They increased their customer base in a year and added toll-free numbers for customers who choose business-level hosting packages at no extra cost. At the same time, HostGator was named one of the fastest-growing companies in the United States by Inc. Magazine.

In 2012, Endurance International Group (EIG) purchased HostGator for $299.8 million.

The company currently employs 1000 people worldwide and has localized, in-language products for Chinese, Russian, Turkish, Indian, Singaporean, Chilean, Colombian, African, Indonesian, and Mexican customers.

Let's look at their marketing plan in more detail:

Ad Spend and Ad Networks

HostGator has spent $919.2K on web ads in the last six months, the bulk of which went to Google ($766.1K) and Direct Buy ($142.5K).

Given that 84% of Hostgator's advertisements are programmatic and 16% are direct, we can safely presume that the organization chooses to automate the negotiation and sales of ad space for their paid campaigns—where all critical parameters including impression monitoring, payments, and billings are handled by a third-party software/platform (for example, Ads Manager, in the case of Google). HostGator is able to save time, eliminate any potential creative management inconsistencies, and eventually maximize their overall campaign delivery by using a programmatic approach to ad buying.

If you're using Google Ads Manager for programmatic advertising, you can choose between two options:

• Programmatic Guaranteed: You and the buyer agree on the price (and other general parameters) for ad inventory that is reserved (guaranteed) for that buyer only.
• Preferred Deal: You and the buyer settle on a price (and other general parameters) for an ad inventory on which the buyers can position bids if they want to. The buyer is given first priority to reserve inventory at the agreed-upon price. The inventory becomes available to all interested parties in the Open Auction if the buyer does not make a reservation. Remember that chosen offers aren't assured because the agreed ad inventory isn't reserved for the buyers (unlike Programmatic Guaranteed) and the buyers aren't obligated to do so.

Despite recent promising developments in the native advertising market, HostGator has little to no ad spend dedicated to it, which appears to be an unusual but not unexpected step. While most brands have been reasonably aggressive in embracing native ads to advertise their products/services, according to a Contently survey, marketers are often hesitant to go all-in on native advertising because the average user does not trust, or feels misled by, an ad that is trying too hard to not look like an ad.

Overall, HostGator's decision to stick with other types of advertisement seems to have been a sound strategic decision.

Publishers

Dictionary.com ($54K), Reddit ($42.5), Merriam-Webster ($27.9K), and Thesaurus ($34.5K) are the top four (out of five) HostGator publishers over the last year. They've stepped away from YourDictionary in the last six months and are now advertising with CoolMathGames ($20K).

The majority of their funds are used to ensure that advertisements appear on the homepages of the aforementioned publishers. Apart from that, HostGator has no set placement pattern for their advertisements, which appear on a variety of landing pages across all platforms. For example, the company spent around $1.7K on advertising on pages that display the definitions of the words ECR and neurogenic on Dictionary.com. Their advertisements have appeared in Asian beauty and gaming groups on Reddit, among other places.

Overall, it's fair to assume that HostGator likes to advertise with publishers who receive a large number of monthly visitors, ensuring that their campaigns reach as many people as possible. Like several brands, they aren't putting much effort into attracting the right people by using sophisticated targeting criteria, and this seems to be working for them at the moment.

Creatives

Apart from images (which account for 97 percent of ad creatives), HostGator's ads are 3 percent text/image, with a few videos, text-only, and HTML5 ads thrown in for good measure.

Here's what we think makes HostGator's campaigns popular, based on their most frequently-run ads:

• Data-driven: Nowadays, most companies (both B2B and B2C) are willing to go to any length to get potential consumers to notice and click on their advertisements when all they really need to do is make content consumption simpler for you by getting right to the point. The most effective way to do so is to use accurate figures or facts in your creatives, preferably in the headlines.

Most people have a rough idea of how much money they're willing to spend on anything before they even consider clicking on an ad, but using figures just serves to speed up their decision-making.

• Variable Discounts: While offering good offers and price reductions is a great way to draw buyers, HostGator takes things a step further by ensuring that their ongoing discounts are versatile. For eg, they advertise “25 percent off WordPress hosting” in one ad and “Select domains [available] only at $5.99” in another. They prevent repetition by changing it up, ensuring that consumers are still on the lookout for the next big deal the business has to offer.
• Focus on USPs: In today's competitive environment, consumers are more interested in understanding how your product/service will make their lives easier rather than how good it is.

HostGator emphasizes at least one of their main USPs in almost every advertisement—for example, "1-Click Installer," "Free Sitebuilder," or "Website Hosting."

👉 Also, you can read: How To Add Addon Domain To Your HostGator Hosting Account

Landing Pages:

Almost all of HostGator's promotions lead to their homepage, where the copy immediately informs the customer that the company's web hosting services are strong, simple, and inexpensive.

Many brands, in an effort to impress a consumer, overburden them with knowledge by using too many CTAs and/or incorporating several navigation locations that negatively impact usability. HostGator not only welcomes brevity with open arms, but they also keep their navigation to the top of the page and only provide the most appropriate links—all of which help to maximize conversions.

Customers can also use the live chat feature on the homepage to get an immediate answer to any questions they have about HostGator's services. Sure, they can still send an email, call a toll-free number, or fill out a contact form during the decision-making process, but keep in mind that the customer's probability of converting decreases with every second that a company takes to answer. A conveniently available, well-placed live chat fills the gap by providing consumers with an immediate line of communication.

Conclusion:

Despite the fact that the vast majority of companies are reluctant to experiment with programmatic, HostGator is reaping the benefits of the new-age advertising strategy, including improved transparency, real-time measurement, stronger targeting capabilities, and increased audience reach. 

The organization has figured out what makes a campaign good, such as their publishers, who haven't changed in a year, their ad creatives, which are still number-driven, and their homepage, which has just one form of navigation.