eHarmony Told To Drop ‘Most Marriages’ Claim

Wasn’t Eharmony’s 14th Anniversary Letter  an interesting read?

Last month, eHarmony was told to drop their “Most Marriages” claim.

Global Dating Insights says:

eHarmony have been told to stop saying they are responsible for the “most marriages”, after a complaint by rivals Match.com.

The National Advertising Division has recommended that eHarmony stop using certain “#1” claims in their advertising.

This was following a complaint by Match.com, who said the surveys used by eHarmony did not sufficiently back up the statements.

eHarmony, in its advertiser’s statement, said the company “respectfully disagrees with much of NAD’s analysis of our specific advertising claims. However, because eHarmony values the NAD process and appreciates the NAD’s efforts, we will take NAD’s recommendations into consideration in our future advertising.”

I’ve always wanted the dating industry to come up with some sort of effectiveness rating. A major impediment to a realistic ranking is that it’s incredibly difficult to track one-time dates, LTR’s and marriages on a site-by-site basis. Dating sites say whatever they want in their marketing, and singles are none the wiser. What about effective niche sites? Shouldn’t they have a say in the rankings? Or is it only based on sheer volume?

This isn’t going to figure itself out anytime soon. Maybe a dating industry group can figure it out. I bet it would be good for business all around.

More at Global Dating Insights.

Scamalytics Hires VP of Sales

scamalytics anti-fraud for online datingThis is great news. Scamalytics, based in London UK, maintain the largest shared anti-fraud blacklists specifically dedicated to the online dating industry. Scamalytics has hired Dave Wiseman as VP of Sales. Wiseman has extensive experience selling fraud solutions into the online dating industry, having previously run European sales for Iovation.

Dan Winchester, Scamalytics co-founder, commented:

Our solution brings anti-scamming tools into a new era by combining state of the art pattern matching technology with the largest independent database of known scammers. Most UK dating companies are either existing clients or are currently trialling us – this hire will maintain the growth by bringing our solution to Europe and the US.

Wiseman will be joining the rest of the Scamalytics team at the forthcoming iDate conference in Koln.

Founded by a group of industry veterans, the team have years of experience in both detecting scammers, and in applying the latest artificial intelligence techniques to make sense of user behaviour on dating sites. Scamalytics specialise in detecting all types of dating fraud including romance scams, chargeback fraud, affiliate fraud, camgirl fraud, redirection fraud.

Eharmony’s 14th Anniversary Letter

eharmony company letter

Received this from eHarmony COO Armen Avedissian. It turns out the company was a complete disaster and losing tons of money. More importantly, eHarmony had lost the respect of singles years ago, and is now back on the right track.

Here it is in it’s entirety.

It’s August 22nd, 2014, and it is the 14th anniversary of this little company of ours that is on the precipice of world-wide greatness. Let me tell you ten reasons why I believe this with all my heart.

We took over the leadership of this company on July 23rd, 2012. It was a total disaster!!! It was one day away from being put on the sales block and virtually given away to the highest bidder who would take it over. We began cleaning house and literally started over. We have only looked back a few times, and we have focused acutely on the target of a five-year turnaround that will surely astound the world of relational gurus and business school leaders.

And now!!!  Look at us!!!  We took our hard won stash of capital and used $153.2M to buy out all the “Class B” shares, and we began the pursuit of our own company.  We asked five of our former and highly-esteemed board members to step aside and give us a chance to do more of what we needed to do to bring this company back.  We made tough decisions (with Greg Penner’s guidance), let some people go, terminated vendor contracts. Moreover, we have cleaned up “our house” by appointing an all-new executive management team that is a more aligned team than we have ever had before.

Moreover, in less than three minutes (or so) we hired a new COO, Armen Avedissian, who is absolutely tireless, totally brave and brilliant, wonderfully “harmonious” with the CEO in relation to values and ideals, and massively ready to do what is necessary to make eHarmony everything it was on its way to becoming through 2009 when it totally lost its way. In addition, we appointed Grant Langston and Dan Erickson to the Management Team. eHarmony, under this new leadership, is determined not to be stopped any longer in its push to be the most prolific relationship company in the history of the human race.

Take a look at the numbers after just two years under this leadership. The comeback of this company, building on the multiple contributions each of you has made, is astounding. Instead of losing 100,000 end of period subscribers each year, suffering EBITDA losses of 50% every single year, our EBITDA for 2014 will literally be dramatic and the cash in the bank increasing substantially each month. EBITDA is currently running $9.4M ahead of plan as we work with our forecasts. Our end of period paying subscriber count has hit its all-time high, our spend on growth products is robust, and our vision for the future is brimming with hope.

We are ready to move our headquarters to one of the most exciting centers in America—and certainly one of the most exciting buildings in Los Angeles on Wilshire Boulevard in Westwood—where the crème de la crème of American business has met for years. Happily, our analysis shows the average drive time per employee will improve 10-12 minutes each way everyday. Now the sign on the top of the building will be none other than “eHarmony.com”. eHarmony will have all of the highest floors in the building (along with the rooftop which has a 360 degree view of all of Los Angeles.) Having our name all over this prestigious building will bring an incredible amount of attention and acclaim to our company’s efforts.

We have carefully outlined an entirely new strategy for our business—one in which we strive to build ten separate relationship businesses with ten separate revenue streams. We believe this will take tremendous pressure off of our marketing spend and set us up for scores of years in which profits will be more available because of a combination of seriously reduced advertising spend and seriously increased consumer efficiency. The scaling of our brand breadth and depth and the multiplying of our national and global impact are almost certainly going to increase the size and profitability of our business. As you know, we are intending to release our “Elevated Careers by eHarmony” by this next December—and our growth plans call for additional sites that are compatible with our matching expertise. We believe we will eventually have an all-purpose relationship business that will help millions of persons through the years.

Currently, we are a very lean staff of highly-trained experts. Whereas under prior regimes we had as many as three hundred employees, we now have only 190—including the staff we have in North America, the U.K., and Australia. It is our intention to offer various relationship services to a much greater segment of the world—first, in English only, and then in the languages of many countries. We believe this will give our business a scale we have never before realized.

We have serious doubts about ever selling our business. Fundamentally, we do not ever again wish to expose the ownership and management of our business to persons who know almost nothing about relationships—and have even less commitment to the sacredness of the relationships we are attempting to assist.

We are deeply determined to remain in a strong cash position. While our minimum figure may increase—even greatly—we are deeply determined never to allow it to drop lower than this amount.

Now that we have enriched more than 1.2M lives through marriage matching, hundreds of thousands of persons are on this journey with us. With their significant help, we are greatly encouraged and deeply confident we will succeed.

Thank you immensely for reading this entire note! We hope you sense the sincerity of it, for we hold to it will all our hearts. From our point of view, this is a company that has been entrusted to us, and frankly, we never intend to risk it ever again to the institutions which have little understanding of its mission and, perhaps, even less commitment to its ultimate success.

As a matter of fact, we deeply believe this can become one of the most important companies in the history of the world. After more than 600,000 marriages and with a divorce rate of only 3.86% (validated by Dr. John Cacioppo’s brilliant and ground-breaking study published in the prestigious journal, “Proceedings of the National Academy of Science”), we find ourselves imagining an entire world with a divorce rate in single digits, a world where over 90% of our citizens truly love their careers, a world in which every person knows more than 50% of what is going on in their brain, a world in which every person alive has at least 3 to 5 really close friends of the same sex and one or two close friends of the opposite sex, and a world in which contentment runs incredibly high in all of our citizens.

Bottom line, as a company, we want to bring about a world in which literally everyone has peace, love, joy, patience, kindness, goodness, faithfulness, gentleness and self-control.  Then, we will know that we have reached our loftiest and most idealistic goals.

After 14-years, eHarmony has surpassed our wildest dreams. And now, I challenge each one of you to dream even more dramatically. May this company and each one of you experience the greatest journey you have ever known as we approach the beginning of this 15th year.

Yours sincerely,

Neil Clark Warren

Online dating Growth, Regulation, Future challenges

Policy wonk Elena Magrina at Inline Policy has written an article about regulation and the online dating industry, with a focus on the UK market.

In the UK, the Online Dating Association (ODA) was set up by industry members in 2013, as they took collective responsibility for their market and operations. The industry decided to self-regulate and created a Code of Practice. As George Kidd, Director and Chief Executive at the ODA, explains: “the industry did not just want to rely on the State to provide regulation and protection in relation to trading practices, privacy matters and the safety of users.”

The ODA Code focuses mainly on the following issues:

  • Advertising and communications
  • The use of personal data
  • Appropriate advice and guidance to users

Online dating industry legislation stalled out in the US years ago. Let’s see if the UK can make a of of it.

Read Online dating: growth, regulation, and future challenges.

Snap Interactive August Subscriber Metrics

SNAP Interactive logoThanks to SNAP Interactive for showing a little bit of skin. It’s rare and great to be able to get a look at key metrics for dating sites.

Cliff Lerner’s quote was interesting: It’s difficult to gain subscribers in August because of seasonal attrition of 6 month subscribers who signed up on or around Valentine’s Day.

It’s funny to see dating sites rolling out features that Adult Friend Finder and other adult sites have had for over a decade. Revenue from paid exposure and communications seems to be the top two areas where most dating sites are “innovating.”

I’m still waiting for the guys with the paid exposure patents to come storm the gates of the dating industry.

—  Active subscriber count increased approximately 27% YTD through August
31, 2014 from approximately 77,700 as of December 31, 2013 to
approximately 98,600 as of August 31, 2014;
—  New subscription transactions increased approximately 35% YTD through
August 31, 2014 as compared to the same period in 2013;
—  New subscription transactions in August 2014 increased 44% as compared
to August 2013.
—  Total subscription transactions in August 2014 were the highest since
October 2012
—  August recurring subscription transactions were the highest since
December 2012.
—  August was the second highest month this year for new subscription
transactions after February
SNAP’s Chief Executive Officer, Clifford Lerner, commented, “August was another strong month for AYI.com. New subscription transactions in August 2014 increased 44% compared to August 2013. Even more exciting is that August was the strongest month since 2012 for the number of recurring and total subscription transactions.”

Lerner added, “Although our total active subscriber base declined slightly from the end of July, this was mostly due to seasonality effects. It’s difficult to gain subscribers in August because of seasonal attrition of 6 month subscribers who signed up on or around Valentine’s Day, the busiest period of the year. August was second only to February this year in the number of new subscriptions, and, notably, tallied the highest number of total subscription transactions since 2012. This high level of subscription transaction volume represents continued momentum in the business, as the associated revenue will be recognized for months to come.”

SNAP’s Chief Operating Officer Alex Harrington added “Another exciting development in August was the launch of paid add-on features within the AYI application. Two feature introductions include ‘Promote Me’, a paid feature that allows users to increase their profile visibility, and ‘First Class Mail’, a feature that offers users the ability to increase the prominence of their messages to other users. These new features increase user engagement in the application, and the transactional revenue generated through these features allows AYI to increase the lifetime value of its users.”

More Dates Brought To You By The Letter T

The amount of research being done in regards to mate-finding never ceases the educate and amuse me.

Researchers at Nottingham Trent University have revealed how wearing a plain white t-shirt with a black letter ‘T’ on the front significantly improves the appearance of the wearer’s waist: chest ratio (WCR) a major signal of masculinity and attractiveness to females.
The results showed that upright T-illusions increased attractiveness and health by about 10%, while inverted T-illusions resulted in a drop of attractiveness by the same amount. The upright and inverted ‘T’ with wider horizontal bars showed a bigger average effect, both positive and negative.

Read T-shirt trickery can make males more attractive.

 

Stale Coffee Meets Bagel

My Coffee Is Stale

While in Boston on a recent business trip I found myself at the same restaurant where I met with some potential Coffee Meets Bagel investors a few years ago. Since then CMB has convinced investors to give them over $3 million to fund growth and product development.

$3M and the site is basically exactly the same as when it launched, except the communication system, which while awkward at launch, is marginally better.

Similar set of profile questions remains in place, although they did take suggestions to change a few things. The search engine that delivers matches remains terrible.

CMB could have owned the Date Of The Day market, but after three years, nope.

From a recent TechCrunch article, Dating App Coffee Meets Bagel Ditches Twilio With New IM Features:

What we observe is that a lot of people hesitate because they don’t want to feel like they are ‘actively’ trying to meet someone,” said Kang”. Tell that to all of the Tinder users.

CMB is a flop because the service isn’t enticing or engaging enough to get any market share. Only a massive re-do of the profiles and matching algorithm is going to save the company at this point.

Still waiting for a competitor to jump into the market, do a daily date site that has some personality, market it well and maybe make something of it. That’s even more likely now that CMB raised some cash, justifying the “daily dating deals” market segment.