Given yesterday’s impending acquisition of Singlesnet, I wanted to throw out a few things that I have been thinking about lately.
Recently dating industry insiders have been talking more about how to compete with Match.com.
In my mind, to compete with Match its important to understand the company’s history, various marketing strategies, branding and several other factors, including how they leverage being part of IAC. It’s also important to understand the downside of being too big, positioned in the marketplace as the Kleenex of dating (which has its own challenges) and a number of other factors that I share with my clients.
Sam from OKCupid asked the industry at iDate why Match was stuck where it is in terms of growth, and according to people present, nobody in the dating industry sitting in the same room could answer the question. I found that disturbing, so I’m going to kick off the conversation here.
As I have said for several years now, the US dating market, based on how business is currently done, is maxed out. After a decade and billions spent on marketing, market penetration leveled off at around 30%. You could add another 10% based on Zoosk, social dating and other rounding errors, but I’m sticking with my 30 million daters online each month number until enough people say different. There is room for a few more sites of considerable size, but there are always the outliers. It’s incredibly difficult to ramp up a new site these days, almost easier to do a roll-up play and be a mini- IAC. Much like the owners of Ashley Madison are attempting.
Match’s days of near-term innovation are pretty much over, it maxed out in the US years ago, and it’s in acquisition mode now, and it’s hungry. Why is Match maxed out? It’s because their current model doesn’t have much headroom. They could increase their ad spend 200% and it wouldn’t make much of a difference. (Their marketing is incredibly inefficient, but that is for another blog post.) They clearly know this, hence global acquisition mode. This is a typical corporate strategy with many benefits and it’s the only road for Match right now. I’m surprised that we haven’t heard more about their efforts in Asia.
Growth through acquisition is perfectly fine for the more than 1.4 million people that pay to communicate with each other on Match and its associated brands. The bigger Match gets the better it is for the entire online dating industry, because people will get tired of Match and want to try something new, which drives the need for innovative new dating brands, matching systems and marketing opportunities. Think Google and Bing.
So, the US dating market is tapped out, plain and simple. Or is it? Of course not. My entire online dating consulting business is based on this premise.
For Match, optimizing the site and testing bells and whistles based on features circa 2004 is an exercise in maintaining the status quo. What’s old is new again. New features may drive pageviews, but they sure don’t drive signups.
Match can optimize the user experience all they want, but that’s tweaking the knobs and dials as opposed to the sea change they require to drive considerable growth. For many sites, things like landing page optimization can greatly increase signups and revenue. Match is already so optimized, there’s not much more then can do on this front. They do have a crack team in place working on this, but we’ll never know the results of their work because it’s going to be nuances not clubs-to-the-head change, which they simply cannot afford to do.
The online dating industry will grow as a whole only when it becomes more effective. It’s a marketing-driven industry with portions of it slowly evolving into performance-based popularity. Take away advertising from online dating and the whole industry collapses, as compared to old-growth Internet companies like Amazon or eBay.
Some argue that dating need a new model. It might be social, or lifestreams, or groups, or matching based on deep understanding of tastes and preferences, or DNA or or something else. This is why I will do whatever I can to help and promote companies like IntroAnalytics, Basisnote, Thread and Gelato. Even Chatroulette might finally bring video profiles back to dating sites, watch Woome what is doing to capitalize on the popularity of Chatroulette.
These are the companies taking online dating to the next level. Who knows, maybe even the mighty Match will acquire some of these innovative dating industry upstarts if they don’t copy them outright.
Whatever Match does or doesn’t do, it’s great to see the dating industry keeping things interesting and giving me things to write about.
