Mattress start-up Casper recently raised $55 million to take on the sleep industry with a new Web-based model. Yet you're just as likely to see its ads in subway stations and on taxis as in your Facebook feed.
Even though Casper's mattresses, which range in price from $500 for a twin to $950 for a king, are only available online, the New York-based company is spending a good chunk of its fresh capital to reach consumers offline.
That's in part due to the astronomical increase in the price of marketing on Facebook and rising competitiveness for Google search terms. In the second quarter, the average price of a Facebook ad soared 220 percent from a year earlier, while the number of ads delivered shrank by 55 percent, according to the company's 10-Q.
"Strategies that worked four or five years ago on Facebook certainly don't work today," said Philip Krim, co-founder and CEO of Casper.
While Casper is still investing on Facebook, Twitter and across the Web, mostly through re-targeting (CNBC saw several ads like the promoted tweet below while reporting for this story), Krim's 10-person marketing team has to get creative. Its competitors, ranging from bed makers like Serta and Sealy to retailers including Sleep Train and Mattress Discounters, can easily outspend the upstart.
Casper's offline campaign started with subway and taxi top ads in New York after the company raised its first big round of funding a year ago, led by New Enterprise Associates. Then, following its June financing (at a $500 million-plus valuation) led by Institutional Venture Partners and including participation from Leonardo DiCaprio, Casper hit the ground in San Francisco with a similar strategy.
Subway station ads include humorous illustrations of all types of creatures, for whom Casper claims to provide "the perfect mattress." For example, an ad with dinosaurs describes Casper as "the perfect mattress for paleos," and one with a squirrel and pigeon eating pizza promotes it as "the perfect mattress for locals."
Taxi ads are more straightforward, showcasing the Casper logo. Krim says it's all still very experimental with the goal of creating awareness.