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In all honesty, we haven't done any real paper advertising, although we do have flyers posted up on the website for those who want to. To my knowledge, this is done very little, or not at all.
The trick for us has been to hit up sites like mpogd.com (we're in the top100 there and it yields huge dividends in traffic) and other general gaming sites. Usually when I talk about the game on those sites, I don't even mention the term "MUD," as many people immediately associate that with:
Either that or they automatically assume that a text-based game would fail to hold their attention.
A very valuable tool is some sort of semi-graphical client. These can be easily crafted in Java, Python, or other higher level scripting languages, or as plugins to existing clients like Mudmagic's. If you can come up with just a little bit of eye candy, you can start advertising on MMO sites without being questioned. To get some coverage on a mainstream gaming site, you need to blurr the definition between MU* and MMO.
Guess I went off on a ramble there, but to answer your question, yes, we've found it to work well. Good places to post stuff like this include SomethingAwful forums, Penny Arcade, MPOGD, and various RPG sites. Also, it's great to post this ad on Battletech sites. In your case, post it to any forums within your game's theme and you'll probably grab quite a few.
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