As we at CCBill continue our efforts to be the Payments-as-a-Service leader in the online dating market, we are pleased to announce a partnership we believe will help drive more traffic and visibility for our merchants running online dating sites, as well as their affiliates.
Revenue dipped in 2009 but just hit the $400 million mark in 2010. 1 spot when you Google "online dating." Tech Crunch reports Match wanted to acquire a younger userbase, and according to IAC, OKCupid has "been the fastest growing dating site in the advertising-based category." Did you hear that? Otherwise sensible filtering criteria, like who you know in common, is not possible in a world of usernames, so you're left with "10 miles from 10005" and mysterious matchmaking algorithms. Match historically spends about half its revenue on advertising to bring new users in the door (and through the subscription pay wall). IAC also set up a joint venture with Meetic in Latin America and bought Singlesnet in 2010. They've grown entirely by word of mouth -- and just announced they're about to go straight, too. The only dating sites that will survive in spite of the social graph will be the adult dating sites.
OKCupid is also a dating site, a lot like Match actually, but best known for: Being slightly cooler. "Advertising-based category" is code for "also pays to acquire users," "does not grow organically" and "not a social network." See, despite the undeniable fact that the social era has arrived -- mutual friends, followers, first-degree connections, APIs -- the dating sites wallow in primordial username soup (so that's where you've been hiding, nycprince03! Usernames are why dating sites can't grow on their own, like social networks. They added 5.4 million paying members in 2009 and 6.9 million of them in 2010. Which brings us back to the OKCupid acquisition, which I predict will to have the rejuvenating effect of a spray tan, which should be cause for concern. Guess how much Grindr spent to acquire over 1 million users across 180 countries in less than two years? That's the one place you don't want your friends, or your partner, or your family to join you.
Some members make it through to the date filter, then you filter them out, and if you're lucky you find a mate and get the hell off the site. (But, get this, the ads are getting too expensive.) To Match's credit, it's not like they haven't tried to grow "organically." Notable experiments include a mobile dating service called Match Mobile they launched way back in 2003 (and again in 2007), and a 2007 attempt to integrate with Facebook, called it Little Black Book. You don't invite your friends to join you on Match, you don't know what friends are already there, and you don't make new friends while you're (paying to be) there.
In the world of online dating, advertising is a 100% data-driven process of acquiring, upselling, and replacing users. Diller's aging anti-social network brings in about a quarter of IAC's annual revenue.
IAC's bought OKCupid last month for $50 million in a deal that put a nail in the coffin of the aging online dating industry. So dating sites grow the only way they can by paying to acquire you, so you can pay them (a subscription! Match seems to have figured that out, as recent efforts to grow have ignored the social graph altogether in favor of dating-site acquisitions and deals with other publishers.