BOISE WEEKLY — Feb 8 — On Bigchurch.com, a Christian dating site, users can search for bible passages by gospel and verse while looking for love (no same-sex searching allowed). On the other end of the spectrum, AdultFriendFinder.com offers to match up like-minded thrill-seekers of any bent. For the tasteful hedonist, the site to visit is Nerve.com, a long-established online magazine that calls itself "more forthright and topical than 'erotica,' but less blockheadedly masculine than 'pornography.'" OKCupid is entirely free to use and quizzes users on their opinions about everything from politics to intimacy. FULL ARTICLE @ BOISE WEEKLY
Mark Brooks: OKCupid and Plentyoffish.com are the big freebie sites these days. Sexsearch.com is next in line to adultfriendfinder in the casual dating space.
16 thoughts on “Where Should We Meet in Cyberspace?”
Boise Weekly has to be kidding when they call BigChurch a “Christian” dating site. A rather broad (to put it politely) interpretation of “Christian” must be being used for a site owned by one of the largest purveyors of sex, homosexual, and “alternative” singles sites online.
Also, when you include Branch Davidians, Mormons, Jehovah’s Witnesses, The Way, and the Moonies, among others, as part of your denominational search listings, your definition of “Christian” borders on the absurd.
Their new slogan, “Meet people who share the same spiritial beliefs as you” is fitting.
Whatever “spiritual” means – I guess the Moonies are spiritual. What next – adding Scientology to the mix?
The word Christian means – “a follower of Christ”. Any notion of Bigchurch.com having credibilty is completly lost. Its a purely commercial operation that provides profit to its parent organisation, who in turns provides on the internet the very opposite to Christs teaching.
Jesus would have upturned their servers, monitors and keyboards too, had they been in the temple.
Bigchurch doesn’t make profit – that’s the thing. When you are bidding $1 to $2/click with 1/20 converting to trial and 1/20 of those converting to paid, and you are charging $15.95/month & lifetime revenue is around $65-75/member (if you are lucky at a $15.95/month price-point), well…you do the math.
(For those who are math-challenged, your acquisition cost is $400-$800/member! Less your $65-$75 lifetime revenue = **a loss of $325-$735 for every member** you acquire! And, it’s not like you can make this up in volume!)
Even a generous 1/10 conversion from click to trial and 1/10 conversion of those to paid = $100 acquisition cost. That’s still a loss for every customer.
And, this is assuming $1/click and very generous conversion rates.
Hence the scratch-your-head part.
I remember wondering how ChristianMingle could make money when they had crazy bids on Yahoo and Google. It turned out they weren’t. They had an accumulated loss of $1.78M when Spark bought them last year.
We gotta start losing money big-time. Then, we’ll wait for the ridiculously-high acquisition offers to roll in!
Maybe that’s Bigchurch’s strategy.
The mind boggles.
Markus,
Let me turn that back on you: show me how they could be making money at $3.27/click.
How could they possibly be, unless their conversion rates are 5-10x anyone else’s?
Run the numbers next time, buddy.
For someone who charges $0 to his members, I doubt it is something you are in the habit of doing.
Match.com makes $140/member at 15% conversion. These are public numbers. They can afford $10 free member and i’m sure that at something like seattle dating they could get 33% signup rates.
But if they get a massive amount of users signing up in one area they may lose on initial signups but make it up on higher conversions because existing members whose accounts are about to expire will signup. Also spending a million a month for match to buy up all PPC ads is peanuts. If i were them i would do this so that no one else could get cheap traffic and become a competitor.
Ok, so your argument is not that they are making money at $3.27/click, but that these loss-leaders can end up helping them overall?
That still doesn’t add up. Can you show me the link where Match claims $140 lifetime/member? 15% conversion I can readily accept; but $140 is high.
Let’s do the numbers and see how they work out:
CPC: $3.27/click
Conversion to click to trial: 33% (your assumption, because it is so targeted)
Conversion from trial to paid: 15%
Lifetime revenue: $140 (proof, please)
Therefore
Click to trial = $9.91 ($3.27/33%)
Trial to paid: $66.07 ($9.91/15%)
Lifetime gain per customer: $73.93 ($140-$66.07)
So, yes, based on your assumptions, they would almost double their money.
However, this is assuming a 33% click to trial ratio, which is 6.6x the average of 5%. That’s what I said in my last post (“How could they possibly be, unless their conversion rates are 5-10x anyone else’s?”)
There is simply no way they are getting 33% conversion rates. 10-15% would be more believable. (Also, how do we know that Seattle members convert to paid status at their overall average of 15%?; let’s assume for the sake of argument that they do).
Assuming the above, they would go from a gain of $73.93/customer to a loss of $5.33/customer:
Click to trial = $21.80 ($3.27/15%)
Trial to paid: $145.33 ($21.80/15%)
Lifetime loss per customer: $5.33 ($145.33-$140.00)
If all the above assumptions hold (and I think they are overly generous), then the question becomes does losing $5.33 for every paying member from Seattle result in existing members seeing all this extra traffic and then signing up in higher numbers (i.e. >15%) to cover the loss? I can’t see it. That overall (company-wide) 15% rate would include that, I would wager.
As for Match spending $1M/month to buy up all the PPC ads, as if they can somehow corner the market – that makes no sense, if that were their strategy. Remember, we have the twits at Bigchurch et all trying to do the same thing.
Always remember: the only winner is the house.
I don’t have the link handy, it was a quote from a VP in a newspaper article, he also mentioned they had increased lifetime membership to 5 months.
Members will resubscribe at a higher rate if there are lots of members they have never seen before.
What value are you putting on the word of mouth? What value are you putting on the branding? For major sites more then half the traffic comes from word of mouth. This is why sites like true can’t break into the market.
At any rate the average CPC for match.com is probably around 30 cents. Just because they buy up a few top words doesn’t mean it moves up their average very much. There is simply no traffic for the 10 or 20 top dating terms. All the traffic is in 2 or more word combinations.
I’d like to see hard numbers from Match on that $140 lifetime revenue claim.
There is tremendous value in word-of-mouth, SE listings, etc., but that does not take away from the fact that they are losing money on a $3.27/click bid. That was the whole point of my original comment about Bigchurch’s bids.
I am sure the average CPC for match.com is probably around 30 cents – across all forms of advertising. But, why not cut out the ones they are losing on and only do the ones they make on? That is how we operate. Mind you, we are not public.
The branding aspect – impossible to quantify. And, it would be a real stretch to claim that $3.27 bids are justified because of an indefinable “branding” aspect.
Sam,
The Similar reasonings you refer to caused us at SweetDuet.net to cease the operations once we experience 5% conversion on the both legs visitors > members and members > payees. It was a waste of $$$.
But you, guys, are both wrong here, as I believe.
Sam, keep in mind that IAC/InterActiveCorp, an owner on Match.com, runs 21 businesses under its wing. And Barry Diller, its CEO, built an online powerhouse that includes:
Ask Jeeves, Inc.
Citysearch
Cornerstone Brands, Inc.
Domania
Entertainment Publications
Evite
GetSmart
Gifts.com
HSN
HSE24
iNest
Interval International
LendingTree
Match.com
PRC
RealEstate.com
ReserveAmerica
ServiceMagic
Shoebuy.com
Ticketmaster
udate.com
They got so big that Expedia was spun off last summer.
Therefore, your calculations being right for a stand alone dating service, do not work for the company offering 22 services complimenting each other. In other words, you have to refer some of the CPC expenses to the other services promoted on Match.com.
Though Markus may be not good at math, he’s making money promoting somebody else’s serivce through the Google Ad Words and collecting pennies for it. That’s why he writes about himself “This site is run by 1.5 people.” Meantime, IAC/InterActiveCorp promotes their own services and gets $7.75 billions a year in revenue for the last 12 months, including Expidia.
Would it be possible for Match.com to do what they do if they were all alone? I don’t think so.
Markus, you’ll see a few years down the road that promoting a site at a higher CPC, hoping to destroy the competition never works in a business with a low entry barrier. It’d be like trying to get rid off cockroaches chasing them with a slash hammer. It never works.
You may notice a turnover of Match.com’s CEOs. That’s a sure sign that business is tough.
Alexander,
How does having 22 businesses make a $3.27/click bid pay for itself? It doesn’t work no matter how many other businesses you have, i.e. the two issues have nothing to do with each other.
Sure, you can expense losses from one business to the next and vice-versa, but that does not mean that you are making money on a $3.27 bid. You are talking apples and oranges.
You have synergies and all that from complementary business. But that is not what we were talking about here:-)
Unless, of course, you could make an argument that the direct loss on Match.com from a $3.27/click bid is made up for by selling a vacation or something else from visitors you otherwise would not have had, had you bid less than $3.27.
But, that is all conjecture, although Diller is certainly into all this for reasoning like that.
I just think he could do the same thing for less than $3.27/click:-)
Sam, two remarks first. I’m not talking apples and oranges and that is not all conjecture. It’s just a difference between running a single service and running a conglomerate. Once a whole number of service are offered to visitor acquired at the $3.27 bid, then you have to take into account a multiple conversion ratios as opposed to only one you are dealing with.
I’ll get it if you start selling Bibles on your website. Another stream of revenue, another conversions, same ad budget, same CPC.
I told you I could help you to expend and grow your business and fill up the gaps you are missing.
All the best
Alex,
Pity you weren’t at iDate2006. You missed my comment on the last panel about Bibles. My members likely already have 5 Bibles each;-)
All kidding aside, you are not convincing me any time soon that a $3.27/click bid can work for any dating site, including one that is part of a conglomerate like Match.
Show me some sample calculations that can justify your argument.
http://www.e-consultancy.com/newsfeatures/154947/how-match-com-gains-nearly-50-000-new-paid-subscribers-per-month.html?keywords=search+tolerance
Article on search there.
I think you are not taking 2 things into account.
1. Network Effect, A site like match.com will get millions of people signing up because of word of mouth. Paying $30/member may actually work out to $5/member because of that effect. This is the same reason why Eharmony, match.com etc are spending 5- to 10 million a month on Radio and TV.
2. A search user is worth $6.00/month ? There is a huge Ask jeeves box on Match.com
Sam, it may be too bad but I’m not trying to convince you. Though if you decide one day to build a conglomerate, I’d be happy to assist, because as the discussion shows you may be missing critical points of the business.
Probably only isiders can reveal an actual IAC/InterActiveCorp’s internal business model. We can only speculate. I can implement a cross-business due diligence and reverse engineer the business model, but what for?
My point is while your logic works for Bigchurch and likes, it’s not applicable to Match.com.
If you take a look at the View Bids accross all the big US cities, you can notice that Match stays 1 cent ahead most of the time. So it’s an automatic bidding.
At the same time http://www.seattlepersonals.org
bidding $3.26 on “Seattle Dating” probably has no slightest idea of what kind of mess they are getting themselves into.
Boise Weekly has to be kidding when they call BigChurch a “Christian” dating site. A rather broad (to put it politely) interpretation of “Christian” must be being used for a site owned by one of the largest purveyors of sex, homosexual, and “alternative” singles sites online.
Also, when you include Branch Davidians, Mormons, Jehovah’s Witnesses, The Way, and the Moonies, among others, as part of your denominational search listings, your definition of “Christian” borders on the absurd.
Their new slogan, “Meet people who share the same spiritial beliefs as you” is fitting.
Whatever “spiritual” means – I guess the Moonies are spiritual. What next – adding Scientology to the mix?
The word Christian means – “a follower of Christ”. Any notion of Bigchurch.com having credibilty is completly lost. Its a purely commercial operation that provides profit to its parent organisation, who in turns provides on the internet the very opposite to Christs teaching.
Jesus would have upturned their servers, monitors and keyboards too, had they been in the temple.
Bigchurch doesn’t make profit – that’s the thing. When you are bidding $1 to $2/click with 1/20 converting to trial and 1/20 of those converting to paid, and you are charging $15.95/month & lifetime revenue is around $65-75/member (if you are lucky at a $15.95/month price-point), well…you do the math.
(For those who are math-challenged, your acquisition cost is $400-$800/member! Less your $65-$75 lifetime revenue = **a loss of $325-$735 for every member** you acquire! And, it’s not like you can make this up in volume!)
Even a generous 1/10 conversion from click to trial and 1/10 conversion of those to paid = $100 acquisition cost. That’s still a loss for every customer.
And, this is assuming $1/click and very generous conversion rates.
Hence the scratch-your-head part.
I remember wondering how ChristianMingle could make money when they had crazy bids on Yahoo and Google. It turned out they weren’t. They had an accumulated loss of $1.78M when Spark bought them last year.
We gotta start losing money big-time. Then, we’ll wait for the ridiculously-high acquisition offers to roll in!
Maybe that’s Bigchurch’s strategy.
The mind boggles.
I suppose your next arguement is that match.com is losing 10’s of millions because they are bidding $3.27 on terms like Seattle Dating.
http://uv.bidtool.overture.com/d/search/tools/bidtool/index.jhtml?Keywords=seattle+dating&mkt=us&lang=en_US&Partner=userbidtool
***********************
Seattle Dating at Match.com
Search through millions of photos. Find someone special in your city.
http://www.match.com
(Advertiser’s Max Bid: $3.27)
Markus,
Let me turn that back on you: show me how they could be making money at $3.27/click.
How could they possibly be, unless their conversion rates are 5-10x anyone else’s?
Run the numbers next time, buddy.
For someone who charges $0 to his members, I doubt it is something you are in the habit of doing.
Match.com makes $140/member at 15% conversion. These are public numbers. They can afford $10 free member and i’m sure that at something like seattle dating they could get 33% signup rates.
But if they get a massive amount of users signing up in one area they may lose on initial signups but make it up on higher conversions because existing members whose accounts are about to expire will signup. Also spending a million a month for match to buy up all PPC ads is peanuts. If i were them i would do this so that no one else could get cheap traffic and become a competitor.
Ok, so your argument is not that they are making money at $3.27/click, but that these loss-leaders can end up helping them overall?
That still doesn’t add up. Can you show me the link where Match claims $140 lifetime/member? 15% conversion I can readily accept; but $140 is high.
Let’s do the numbers and see how they work out:
CPC: $3.27/click
Conversion to click to trial: 33% (your assumption, because it is so targeted)
Conversion from trial to paid: 15%
Lifetime revenue: $140 (proof, please)
Therefore
Click to trial = $9.91 ($3.27/33%)
Trial to paid: $66.07 ($9.91/15%)
Lifetime gain per customer: $73.93 ($140-$66.07)
So, yes, based on your assumptions, they would almost double their money.
However, this is assuming a 33% click to trial ratio, which is 6.6x the average of 5%. That’s what I said in my last post (“How could they possibly be, unless their conversion rates are 5-10x anyone else’s?”)
There is simply no way they are getting 33% conversion rates. 10-15% would be more believable. (Also, how do we know that Seattle members convert to paid status at their overall average of 15%?; let’s assume for the sake of argument that they do).
Assuming the above, they would go from a gain of $73.93/customer to a loss of $5.33/customer:
Click to trial = $21.80 ($3.27/15%)
Trial to paid: $145.33 ($21.80/15%)
Lifetime loss per customer: $5.33 ($145.33-$140.00)
If all the above assumptions hold (and I think they are overly generous), then the question becomes does losing $5.33 for every paying member from Seattle result in existing members seeing all this extra traffic and then signing up in higher numbers (i.e. >15%) to cover the loss? I can’t see it. That overall (company-wide) 15% rate would include that, I would wager.
As for Match spending $1M/month to buy up all the PPC ads, as if they can somehow corner the market – that makes no sense, if that were their strategy. Remember, we have the twits at Bigchurch et all trying to do the same thing.
Always remember: the only winner is the house.
I don’t have the link handy, it was a quote from a VP in a newspaper article, he also mentioned they had increased lifetime membership to 5 months.
Members will resubscribe at a higher rate if there are lots of members they have never seen before.
What value are you putting on the word of mouth? What value are you putting on the branding? For major sites more then half the traffic comes from word of mouth. This is why sites like true can’t break into the market.
At any rate the average CPC for match.com is probably around 30 cents. Just because they buy up a few top words doesn’t mean it moves up their average very much. There is simply no traffic for the 10 or 20 top dating terms. All the traffic is in 2 or more word combinations.
I’d like to see hard numbers from Match on that $140 lifetime revenue claim.
There is tremendous value in word-of-mouth, SE listings, etc., but that does not take away from the fact that they are losing money on a $3.27/click bid. That was the whole point of my original comment about Bigchurch’s bids.
I am sure the average CPC for match.com is probably around 30 cents – across all forms of advertising. But, why not cut out the ones they are losing on and only do the ones they make on? That is how we operate. Mind you, we are not public.
The branding aspect – impossible to quantify. And, it would be a real stretch to claim that $3.27 bids are justified because of an indefinable “branding” aspect.
Sam,
The Similar reasonings you refer to caused us at SweetDuet.net to cease the operations once we experience 5% conversion on the both legs visitors > members and members > payees. It was a waste of $$$.
But you, guys, are both wrong here, as I believe.
Sam, keep in mind that IAC/InterActiveCorp, an owner on Match.com, runs 21 businesses under its wing. And Barry Diller, its CEO, built an online powerhouse that includes:
Ask Jeeves, Inc.
Citysearch
Cornerstone Brands, Inc.
Domania
Entertainment Publications
Evite
GetSmart
Gifts.com
HSN
HSE24
iNest
Interval International
LendingTree
Match.com
PRC
RealEstate.com
ReserveAmerica
ServiceMagic
Shoebuy.com
Ticketmaster
udate.com
They got so big that Expedia was spun off last summer.
Therefore, your calculations being right for a stand alone dating service, do not work for the company offering 22 services complimenting each other. In other words, you have to refer some of the CPC expenses to the other services promoted on Match.com.
Though Markus may be not good at math, he’s making money promoting somebody else’s serivce through the Google Ad Words and collecting pennies for it. That’s why he writes about himself “This site is run by 1.5 people.” Meantime, IAC/InterActiveCorp promotes their own services and gets $7.75 billions a year in revenue for the last 12 months, including Expidia.
Would it be possible for Match.com to do what they do if they were all alone? I don’t think so.
Markus, you’ll see a few years down the road that promoting a site at a higher CPC, hoping to destroy the competition never works in a business with a low entry barrier. It’d be like trying to get rid off cockroaches chasing them with a slash hammer. It never works.
You may notice a turnover of Match.com’s CEOs. That’s a sure sign that business is tough.
Alexander,
How does having 22 businesses make a $3.27/click bid pay for itself? It doesn’t work no matter how many other businesses you have, i.e. the two issues have nothing to do with each other.
Sure, you can expense losses from one business to the next and vice-versa, but that does not mean that you are making money on a $3.27 bid. You are talking apples and oranges.
You have synergies and all that from complementary business. But that is not what we were talking about here:-)
Unless, of course, you could make an argument that the direct loss on Match.com from a $3.27/click bid is made up for by selling a vacation or something else from visitors you otherwise would not have had, had you bid less than $3.27.
But, that is all conjecture, although Diller is certainly into all this for reasoning like that.
I just think he could do the same thing for less than $3.27/click:-)
Sam, two remarks first. I’m not talking apples and oranges and that is not all conjecture. It’s just a difference between running a single service and running a conglomerate. Once a whole number of service are offered to visitor acquired at the $3.27 bid, then you have to take into account a multiple conversion ratios as opposed to only one you are dealing with.
I’ll get it if you start selling Bibles on your website. Another stream of revenue, another conversions, same ad budget, same CPC.
I told you I could help you to expend and grow your business and fill up the gaps you are missing.
All the best
PS: As for Bigchurch, you are 100% right. It was a losing game. As for Match.com, you are 100% wrong for a reason I have explained.
Alex,
Pity you weren’t at iDate2006. You missed my comment on the last panel about Bibles. My members likely already have 5 Bibles each;-)
All kidding aside, you are not convincing me any time soon that a $3.27/click bid can work for any dating site, including one that is part of a conglomerate like Match.
Show me some sample calculations that can justify your argument.
http://www.e-consultancy.com/newsfeatures/154947/how-match-com-gains-nearly-50-000-new-paid-subscribers-per-month.html?keywords=search+tolerance
Article on search there.
I think you are not taking 2 things into account.
1. Network Effect, A site like match.com will get millions of people signing up because of word of mouth. Paying $30/member may actually work out to $5/member because of that effect. This is the same reason why Eharmony, match.com etc are spending 5- to 10 million a month on Radio and TV.
2. A search user is worth $6.00/month ? There is a huge Ask jeeves box on Match.com
Sam, it may be too bad but I’m not trying to convince you. Though if you decide one day to build a conglomerate, I’d be happy to assist, because as the discussion shows you may be missing critical points of the business.
Probably only isiders can reveal an actual IAC/InterActiveCorp’s internal business model. We can only speculate. I can implement a cross-business due diligence and reverse engineer the business model, but what for?
My point is while your logic works for Bigchurch and likes, it’s not applicable to Match.com.
If you take a look at the View Bids accross all the big US cities, you can notice that Match stays 1 cent ahead most of the time. So it’s an automatic bidding.
At the same time http://www.seattlepersonals.org
bidding $3.26 on “Seattle Dating” probably has no slightest idea of what kind of mess they are getting themselves into.