I think you are only touching on one element of the issue. Your signup process is like a funnel with more than one piece at play. Yes advertising is important but what does the site look like when the player lands on the page? Are there screenshots to entice the player to sign up? Do you use Facebook connect? How long is your registration form? Once in, how does the player get engaged?
You could do all the advertising you want but unless you manage your entire funnel, you will be wasting your money.
