Some of you may remember when I spoke at iDate a few years ago and I pointed out Sam Cox of Milabra in the back of the room.

Sam sent me this update:

The (Milabra) Image Intelligence platform is now producing 1 billion image ratings a month, and we’re able to generate 10 impressions per image. Amazing things from our engineering team. Additionally, our data is available for sale through the AppNexus real time advertising platform.

Stay tuned for some new partner announcements in the coming weeks, as well as some new product launches.

Read Milabra Optimizing Ad Targeting Visually And Improving Brand Safety Says CEO Cox.

Knock ‘em dead at AdTech, Sam! Maybe some dating sites will talk to Sam about targeting ads based on people’s profile photos. Works well on Facebook.

Related posts:

1. Image Recognition Co. Milabra Launches, Has $1.4 Million in Financing
2. Improving Personal Ad Photos
3. Milabra Presenting on Speedy Image Classification

Don’t you just love these Plentyoffish ads? The poorly positioned bold type and grammar, goofy smiley face and bland copywriting speak volumes about the site’s personality and make me want to go check it out. It looks like Markus did this ad in Microsoft Word, took a screenshot and uploaded it to the web. Reminds me heinous diet ads we are bombarded with daily. Perfection.

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It will soon be possible to compare the performance of online dating search and social ad campaigns side by side. Clickable, the ad management platform that lets search marketers measure and track the performance of their online marketing campaigns across different search engines and advertising networks, will be adding Facebook Ads as an option on April 12. Via Tech Crunch.

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Take a moment to realize that coked-up airbrushed sickly supermodels with big boobs (otherwise known as online dating advertisements) are not a universal depiction of ultimate beauty. Snip: “This is a woman of the Mursi tribe, wearing boar’s tusks, which traditionally would be considered men’s decoration. The Mursi women are famous for their clay lip plates, a symbol of beauty. A woman would literally have a little hand bag with three or four of them featuring different designs. Sort of their own version of Prada.”
Objectifying women to earn a buck is one of the oldest marketing techniques, but that doesn’t mean the entire dating industry needs to follow suit. Just look at the new Match.com television ads, some of them are fantastic, and nary a boob to be seen. Great ads tell a story, be it a static image or a commercial. Keep telling the wrong stories and your brand will suffer, I guarantee it.

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Look at these PlentyofFish ads. Defecating animals, the usual “hot girls messaged you at POF” and now we have ads that trick members into clicking them because they look exactly like, and are positioned directly next to, photos of people on the site. Crap ads (literally) and click scams, welcome to the worlds largest online dating site.

I thought that maybe Match would come in and elevate the free dating game, but they only lasted a few months before they threw in the towel. Unfortunate, as it would have been nice to see POF and Match battling it out based on effectiveness and quality. Instead, free dating remains synonymous with a low quality experience. This is not good for consumers or the dating industry in any way shape or form. Glad to see OKCupid has chosen to stick with high road.

PlentyofFish is down-market and OKCupid is edgy. Expect to see a mid-market free dating site on the scene in 2010 which swoops in and takes the middle of the market away from both free and paid dating sites. Huge market opportunity to wedge in-between POF and OKC. Problem is, buy-in at the free online dating table is cost-prohibitive at this point. Maybe Zoosk will morph into more of a dating site and establish a position in the middle, but they’re stuck at the lower-end like POF, necessitating the need to go upscale to hit the fertile middle ground. Can you tell that I’m beginning to put together my 2010 online dating industry predictions?

Related posts:

1. The Closest Marriage, Literally
2. Plentyoffish “Destroys” online dating business model
3. PlentyOfFish Starts Charging Premium Membership Fees

Online advertising has always fascinated me. Back in 1994 I was part of the group that posted the (arguably) first paid banner ads on a major network. The AT&T banners, part of the “You Will” campaign, had a 78% clickthrough rate on WIRED Magazine’s Hotwired network.

Lately I’ve been talking to a lot of people about the lack of optimized dating site advertising. It’s surprising how few sites do thorough A/B testing. We’ve all seen the ads, whether you’re single or not. Try as I will, it’s impossible for me to get these ads off my Facebook pages, maybe I just need to say I’m in a relationship, but something tells me even that will not be enough to stem the tide of nubile women wanting to meet me tonight.

Recently I had lunch with someone who has bought tens of millions of dollars of dating industry advertising and they said that Match probably wastes 50% of their ad spend on generic un-targeted advertising. Whether or not that is a valid statement is not the point. The point is that dating sites are stuck in the world of boobs-and-buns advertising, which, surprise, drives traffic, but is it really the kind of traffic coming to a dating site that converts well? I guess it does, which is why the industry is stuck in a rut, but I’m hoping that emerging forms of more targeted and memorable online advertising will be adopted by the dating industry, and none too soon.

Geo-targeted ads are old school, sites like Adult Friend Finder have used them for years. Their affiliate banners are incredibly customizable, a primary reasons why so many people visit the site. I’m surprised that more conventional dating sites don’t experiment with dynamically-generated ads. Milabra is doing it kind of stuff, right now, and the results seem promising.

A recent report stated that something like 18% of Internet users were responsible for the majority of ad clicks. Reminded me of the fact that there are 100 million singles in the US and only a third are using dating sites at any given time. Dating sites are leaving a lot of money on the table, in no small part due to these titillating ads that have remained in vogue for too long. It’s time to move on and target customers with advertising that we don’t have to be embarrassed about. Or maybe not. Maybe T&A advertising is the only thing that works, which is sad both for dating sites and the industry as a whole. 60 million un-served customers. Think about it.

Update: Forgot to link to the post that got this started. Displaying the best display ad with Teracent.

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Dating Ad Network now lets members monetize ad spots within their network of Dating-related sites. More info and signup at www.DatingAdNetwork.com.

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A warm welcome to our latest sponsor. Viximo provides a turnkey virtual goods platform for dating, gaming and social sites, available on the web and mobile phones. They also have a developer kit for the iPhone which makes creating mobile content a snap.

Over the past year I’ve gotten to know the viximo team, and being local, we see each other at events around Boston. It’s great to have such an innovative company as a sponsor. Make sure to click their link to see how they can increase dating site revenue and engagement between members.

And of course a shout-out to the rest of our sponsors:

Milabra
DatingHeadshots
Boonex
Matchmaker
Honesty Online
SkaDate
iovation

Want to reach online dating executives and key decision makers? Contact us.

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In a previous post I mentioned that Friend Finder Networks had an amazing advertising solution right under their nose but are distracted with the IPO plans. I went back and re-read some of the commentary about the IPO and thought it would be interesting to share some of it.

For people who think starting a dating site is cheap, read the Friend Finder Networks prospectus.

Net loss of $29.9 million on $48 million in revenue in 2007. For the first nine months of 2008, FriendFinder had operating income of $17.6 million and a net loss of $32.3 million on $244 million in revenue.

…company labors under default and nearly $400 million in debt coming due in the next three years.

In the first three quarters of 2008, FriendFinder spent $46 million on marketing, up from $3 million in the same period a year ago. FriendFinder’s net loss for the period widened to $32.3 million from a loss of $14.8 million. Revenue was $243.9 million for the nine months ending Sept. 30, compared with $26.7 million in the year-ago period.

Numbers seem a bit out of whack since they company a dating network to Penthouse magazine.

Point 1: Observe how much money it takes to be a major player in the online relationship space? Various, Inc. made things incredibly difficult for the new owners by doing things like “forgetting” to pay EU taxes for a few years and running the debt up incredibly high, which was required to get the footprint and mindshare they now enjoy. Irresponsible or not, they are in a very tight position.

Point 2: How long until Friend Finder Networks goes out of business or is forced to sell off assets in order to survive?

International Herald Tribune, WSJ, ZDNet, and TechCrunch for more details.

Someone left a comment on a previous post about the marketing costs associated with launching a dating site. They said $10,000 sounded about right as opposed to my $25,000. $10,000 gets you a month or two of late night radio spots in a single metro market and some Adwords. You haven’t tested your AdWords yet and don’t know what creative will perform the best so you throw away at least a few grand during the learning curve. Two months, budget gone, maybe 500 users if you’re lucky. I’m skimming over the details but anyone who runs a moderately successful dating site spends about $30,000/month on marketing. Once you start spending that much you can’t stop or your traffic will crater. It’s even worse if you’re a free site relaying on impressions and clicks.

I know companies who have spent $500 on AdWords and converted many more members than a $5,000 Yahoo ad buy during the same period. Dating sites like SinglesNet keep to themselves about their ad spending habits, we know the ballpark of what they spend but as for those first few critical months, who knows what they did to get the traffic?

Of course there is gorilla marketing, doing live events, partnering with blog networks, buying spot ads and all the other marketing tricks and advertising optimization tricks out there. That stuff takes a while to figure out, there is no hard and fast blueprint these days, only guidelines and best practices based on those who have launched before you.

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TechCrunch has a guest post from Eric Clemons, Professor of Operations and Information Management at The Wharton School. The article, Why Advertising Is Failing On The Internet, talks about how online advertising in it’s current format is doomed.

This got me thinking about the relationship of advertising to free online dating sites. I started out thinking this post would be about how the drop in ad revenue discussed in the TC post would affect online dating, but decided I’d throw out my more general observations about advertising and online dating instead.

Granted, advertising is not going to hurt online dating, but as a revenue source in it’s current format, it’s certainly not helping. Connecting brands with customers on dating sites is wide open territory at this point. No dating site has cracked the code yet, most are relying on ad serving networks to deliver targeted advertising. This is a big mistake I hope will be addressed by smaller ad networks catering to online dating sites.

Disclaimer: I often run ad-blocking software in Firefox. When it’s not on, I probably click an ad every week or so. I’m also very good at ignoring ads when I’m browsing. I think display advertising on the internet is broken and marketers for the most part are either stuck in their ways or choose to remain ignorant instead of trying to fix the problem. Paid dating sites that feature ads drive me crazy.

In order to make enough money to survive, free dating sites are currently stuck in a revenue rut. All they can do to earn enough money to keep the lights on and the servers running is plaster sites with (for the most part) un-targeted advertising.

PlentyofFish is trying an interesting experiment where members can purchase a badge that identifies them as a Serious Dater. The badge simply signifies intent and is a weak value proposition, because even an axe murderer can buy a badge. But some people will buy them.

Diversity in revenue streams is a good thing for online dating sites, but there are only so many Dr. Phil DVD’s people will buy, especially since he’s doing a good job impersonating Jerry Springer these days. Highlights in the search results seem to backfire – “If she felt the need to place a red border around her profile, what’s wrong with her?”

POF is now a hybrid free/paid. The basic site functionality is still free, but you’ll be able to buy all sorts of bling for your profile. PlentyofFish is turning into Myspace whereas OKCupid is becoming Facebook. Plenty of holes in this analogy but you get my point. I would pay POF $25/year for a custom-looking profile. I’m not saying clowns-on-acid Myspace custom, just something that isn’t quite so horrid to look at and easier to read.

Let’s think about two different types of online display advertising.

With CPM advertising, a certain number of visitors are required to visit the site and simply view ads in order for the dating site to get paid. CPM advertising is for the pro’s. If you’re not spot on with your creative, you’re throwing good money after bad.

The CPC model still requires a ton of visitors, because only an infinitesimal amount will actually click that University of Phoenix/fat burner/mortgage ad. That’s two ways ads are priced, there are others like Cost Per Action but I won’t get into those here.

Regardless of the type of ads displayed, any free dating site with fewer visitors than necessary to remain profitable through clicks or impressions will fail. Let’s say the magic number is 200k monthly uniques. If the site receives less than 200k visitors, it doesn’t make enough revenue to stay afloat.

However, it is very difficult to start a dating site with an empty database of members. Thats why White Label Dating appears to be running away with the paid dating white label market. Their value proposition to startups is that they enable you to launch your site pre-populated with members, avoiding the empty database problem.

If the future of online dating is free, why isn’t someone buying up 10-20 dating sites comprised of many demographics and starting Free White Label Dating? Build an ad-targeting system, integrate with Facebook for new members, buy a few sites and bam, there you have it. Is this a crazy idea?

What happens when ad prices bottom out or we simply start using browsers that block ads by default? Will POF and OKCupid disappear? Does this mean that there is no way a free dating site can ever launch without considerable marketing costs? (Ignoring Facebook for now, there are still costs associated with the development and ongoing maintenance of FB apps).

I talk to lots of people considering starting free dating sites. I tell them to go talk someone into giving them $250,00 for early-stage marketing, then think about starting the site. That’s what it costs to start a successful free dating site. At least. Anything less and you’re going to run out of money before you hit the magic number of members required to run a self-sustaining free dating site.

I’m sure people will disagree with my numbers, we have to start with some baseline assumptions, please feel free to correct me in the comments.

The fact is, no other sector online has the failure rate of online dating. But dead dating sites are like zombies, they limp along in the night on $20/month servers, never quite expiring, becoming more of a hindrance than a help to singles.

People think you can throw up a site and the money will start pouring in. It’s not even that way with White Label Dating. You only get paid for the members you convince to sign up to your site. Guess what, that costs money ($2-$10k month at least to really get going) and now you don’t run a dating site, you’re essentially an affiliate marketer. When most people hear this they usually say they had no idea that’s how it works.

Do you know which dating site could turn online advertising on it’s head? Friendfinder network. Problem is, they are so clenched about the IPO that’s not happening anytime soon that they are unable to see what an amazing opportunity lies at their feet. All the great ideas end up in pr0n/adult first, as usual. I’m not going to explain it here, the idea is just so darn good I’m going to let it percolate for a while.

What happens next for free online dating sites? Giant expanding ads for Viagra and SinglesNet? Or perhaps the current circa-1999 web-ring style of ads networks will continue, where every ad on a dating site is for another dating site? As a single person, I don’t like that model much. It may be good for business but what kind of message are you sending to your members when all you want them to do is leave your site for somewhere else because you’ll make more money off of them that way?

Hopefully this dislodged some thoughts that we can take up in the comments. Off to get a haircut.

Related posts:

1. Advertising Woes Hitting Online Dating?
2. The State of Online Dating Advertising
3. Hot Or Not Goes Free, Online Dating Continues to Suffer