Month: March 2006

OPW Interview — Mar 8, 2006 — The online personals market analysis companies that are quoted most often in the press are Comscore, Jupiter, Nielsen and Hitwise.  (I list the top 15 online personals site rankings from Comscore, Nielsen//Netratings and Hitwise on Online Personals Watch each month.  See the left bar.)  Hitwise has grown agressively over the last couple of years in the US.  You’ll see Bill Tancer quoted in the press as GM Research for Hitwise.  Here’s a more in depth interview with him on Hitwise and the online personals market. –Mark Brooks

What’s your background Bill?
I’ve been at Hitwise for two years and I’m the General Manager of the Global Research Group.  Before that I was the Director of Research at Looksmart. Prior to that, I headed up various market research groups at NBC internet, SNAP and Zaplet.  I also was a consultant for the Gartner Group covering the internet space before the dotcom boom.  Before that I was a trial lawyer in the US Navy.  I was always fascinated with technology.  In the Navy I was one of the first lawyers who used MILNET for email.  It was a one day round trip for a message.  The response would come into the communications department where an MP would take the response and put it on floppy disk and drive it to me. It was in 1995, after I moved to California and had finished my Navy commitment that I decided I wanted to work in the internet space.

Tell me more about your role at Hitwise?
I’m the GM of Global Research Group and head a team of analysts in Australia, UK and the U.S.  We have a couple of primary objectives for the research group.  Our first objective is to raise awareness for the company and for the concept of online competitive intelligence.  We do that by developing interesting applications for our data, writing about those applications, talking to the press and through speaking engagements.  We also work with our existing clients to help them find new ways to apply our data to make better, more informed business decisions.   

What are the top three ways Hitwise helps CEO’s make better decisions and make more money?
The first thing is just in understanding what your competitors are doing online.  There’s a ton of tools at any trade show floor that will help you analyze internal data, but not much out there to help you put all of your internal data in perspective.  That’s the #1 thing.  A close second would be our massive database of search terms that drive traffic to specific sites and categories, like the dating category.  With that data we can help our clients intercept their competitors’ traffic and drive it to their own websites.  #3 would be getting a high level overview of your space and the rest of the internet and using our data to make strategic decisions about the direction of your company. 

What do you think of the online dating space?
Online dating is a fascinating space and a great space for us to talk about. There has been an explosion in the number of sites in the dating category. We’re looking at 846 sites in the category.  At the same time we see the visits and market share of visits to the category is flat.  There’s a necessity to become more competitive.  Our data allows our clients to see where competitors are getting their traffic from and what kind of search strategy they have.  Also, the demographics and psychographics of visitors to competitors sites.  All of that together allows you to compete more effectively. 

What’s the state of the online dating market? 
If we take the category as a whole, it’s in the decline.  It’s interesting because I’ve been following the market since January 2004.  We were tracking 611 sites back then.  Now it’s the zenith.  In early to mid 2005 there were 918 sites.  Now, we’re down to 846.  There appears to be a bit of a shake out as well as a decline in market share of visits to the category as a whole.  So let’s take those 846 sites today.  If I take all visits, the online personals market will take 0.847% of all internet visits.  If I go back to the markets zenith in July 2005 it was at 1.2%.  We’re looking at how much the internet dating sector has grown in relation to the entire internet audience, which may also have grown.  If we take the top three dating sites, Yahoo! Personals has increased market share and Match and eHarmony are relatively flat.  The leaders in the space are increasing market share while the other sites shares are declining. The peak was due to the influx of all the niche dating sites.  As the major dating sites refine their search categories it negates the business models of the niche players.  The challenge for smaller players is to provide some kind of value-add in terms of content or user experience.  The other thing that I think we need to factor into dating is the ‘competitive substitute.’ The big one is social networking.  I need to mention Myspace.  This site is geared towards a younger audience and they use it for a number of purposes. Just looking at the rankings, Myspace is the 4th largest site on the internet.  It was getting 2.8% of internet visits.  In terms of market share it’s three times the size of the rest of the internet dating segment in terms of market share of visits. 

Where are the growth areas?
There’s two growth areas.  The younger and the older audience.  Online dating sites have a 25-34 demographic focus.  Myspace is strongly skewed to 18-24 year old visitors and represents a new paradigm in dating. We saw Friendster pick up and decline.  Myspace has picked up where Friendster left off.  This model caters to the younger audience.  All online dating players should be taking note of Myspace.  The 18-24 sector can be a predictor of what will happen for the rest of the online dating space.  Facebook has 0.15% of all internet visits so it’s more than a degree of magnitude smaller.  It’s also growing.  It’s had very steep growth from Nov 2004 to present. 

What are the latest developments with Hitwise?
We just launched a new search capability so our clients are now able to search for search terms by industry category and even by site.  I can tell you what site got what traffic on a particular keyword and dissect a competitive search category.  We’re coming out with a gap analysis tool within our search term intelligence service.  So, I can take another dating site and use this tool to compare search terms ‘gaps’.terms they are getting traffic on that I’m not.  I can compare with a custom category and get an optimized list.  We now cover 162 industry categories and we’re constantly refining and adding more functionality.