PARADIGM SHIFT — Oct 20 — From my point of view the paid industry is screwed. The only way you can stay in business is if you keep members around and paying for a long time. If your company is successful then you lose that paying member. For free dating sites its the exact opposite. Give people exactly what they want, and hope it generates word of mouth so you can grow!
The full article was originally published at The Paradigm Shift, but is no longer available.
Mark Brooks: Your comments please…
Top tier dating sites have pushed up their membership fees. They’re probably going to add more services and push fees a little higher even. PlentyofFish has swept in and satisfied users desire for a free dating site…but I bet many of your users are still on the paid sites as well.
There are nightclubs that are free to get in, and nightclubs that cost $50 to get in. PlentyofFish is the free club. eHarmony is the $50 nightclub. Match is midway between the two. I think PlentyofFish will continue to get market share and suck up users from the paid dating sites, but those users will still circle around to the paid dating sites for a couple of months at a time.
Mark Brooks
OnlinePersonalsWatch.com
Markus is spot on that the paid sites have failed to innovate and have a business model centered on robbing the customer. But paid sites aren’t screwed because free sites are plagued with bogus profiles. Instead, people will just get turned off on the whole concept.
It’s obvious what the paid sites need to do, but I guess they’ve been doing the same thing so long they can’t see it.
I agree with Markus 100%. Sites like plentyoffish and Collaboradate.com are going to fill the gap between match.com and myspace (and the process has already started). Users, in my opinion, are not willing to pay for something that they can get for free. Having tried eharmony back in the day the only thing that I got out of it was a headache and a wish for the 40 minutes I just spent filling out a bunch of stupid info back. My “matches” were people I would not take a second look at while doing a manual search. Nobody knows better then myself who I will click with.
The “sweet spot” in free online dating is approaching, it will just be a matter of which sites survive to cash in.
I cover this topic a lot in my blog at http://www.collaboradate.com/blog/
Agree with David D. that people are turning off of paid online dating sites overall. There is growth in certain sectors but not across the board. Classic crossing the Chasm problem in the industry (see Geoffrey Moore) like Evil Keneivel crossing the Snake River (see YouTube). Up up up and crash.
Yahoo has top tier service, which is like an echo chamber for all we know because they failed to differentiate clearly between the primary service and the VIP one.
I spent 15 minutes communicating with women in my zip code on PoF today. Nobody would text chat, some profiles were of the escort variety (every site has that) and overall I thought the quality of the profiles to be extremely low. This is what disappoints me about sites that make so much money. Kudos to Markus but the quality of the membership database is an important metric which unfortunately is lost on most online daters.
Maybe it’s different up north, but I don’t speak Canadian.
I agree with Dave Evans that POF needs a lot of work, and I am still baffled as to why Markus doesn’t hire just a few top notch people to at the least give POF site a face lift. The main point here though, is that there really isn’t a great free dating site as of yet (yes even mine isn’t great at this point), but just because your making money and gaining traffic doesn’t mean you can stop working, and put the site on cruse control.
If your not putting out some drastic changes every 6 months of so, you are lacking innovation.
I really think people will be blown away with the completely re-done site that we have created from scratch. I went back to the drawing board, my aim was high, but the goal was clear… to be the best free dating site on the net, and we are just weeks away 🙂
Traffic: When you have behemoths like MySpace, YouTube, etc. and dozens if not hundreds of emerging boutique/niche sites, surfers have more choices. The Internet is continuously evolving with a myriad of sites that cater to people’s tastes/interests/needs. Overall traffic is getting sliced like a pie across the board and as a result the internet pie of eyeballs/traffic is sliced into more pieces than it was yesterday. I always say that having choices is a good thing. This simply means that more and more paying dating sites will interest and cater to “more serious” daters who are willing to fork up $30 bucks plus a month for an opportunity to meet someone. The traffic for dating sites is not what it was but mashups will emerge that tap into multiple markets and areas of interest; such sites will generate significant traffic if executed well.
As I told Markus at iDate Amsterdam if he is serious about going after Match he should invest in his technology and offer some of the bells/whistles of major paying sites and screen profiles. Oh, and throw in customer support and more than just banning ip addresses to protect your members. Personally I would feel responsible to provide both even if running a free site but this would mean that Markus has to hire people, work with others and surely this would take away from his narrative of how his one man operation brought the paid dating industry to its knees. Either way, paying sites that are run well/responsibly ain’t going anywhere but kudos to Markus for offering a service that people are enjoying and that he is financially benefiting from.
Innovation: Yea it’s been slow and I was disappointed that this topic was barely touched at iDate. I think Match has been doing some creative things like searches by tags and some other “stuff” but nothing huge has emerged of late. Personally this topic fires me up. People will pay more money if you provide them what they need – let’s put technology to work for people who are trusting dating sites to work with them as a partner in finding a match. Nate Elliott at Jupiter talks of the overall dissatisfaction levels of online daters. The question that needs to be asked of daters who use dating sites is “what are your expectations”? Are online daters taking responsibility for their experience? In general do we as human beings take responsibility for our experiences and journeys in life? Some do, some don’t, some do when it’s convenient but I feel that online dating sites have unfairly been getting a bum rap of late. Alas it is what it is but by raising the awareness of ones online experience, listening to people’s needs, creating a sense of cummunity and helping/working with members to achieve their goals I think that the dating industry can help improve the user experience.
Life is good.
Markus has created a formula that equals money. He hasn’t touched the site because of one reason, it’s working! Why fix something that isn’t broken? If he actually changed the site he would prob end up hurting himself more in the end rather than helping. He’s the #1 adsense earner in the world, must be doing something right. The site is so cut and dry that he can run the entire thing off of a few servers. If he were to add more features, his overhead would increase dramatically and he would find his net earnings on a downward spiral. I would be doing the same thing if I were in his shoes. And he’s only getting bigger!
Luke,
Peace.
It is a false assumption to think that something must be “broken” in order for one to want to improve an application/service.
That being said it goes without saying that Markus has a good thing going *ahem* sorry, a Great thing going but may not have the desire, vision or heart to “rock the boat”.
Free dating sites indeed fill a void and as Markus has shown they can thrive by successfully monetizing their traffic. Yes, social entertainment networking sites & free dating sites take traffic away from the sites that charge but to really hit the dating industry (paying sites) in the gut, free dating sites will need to improve their service and the quality of profiles.
Food for thought: considering Fish and Chipses immense traffic Markus is making peanuts (it’s all relative of course); the eCPM from Google is ridiculously low. Build or license your own ad rotation software and sell your inventory to advertisers for a higher CPM (paying sites will pay as PofF and others are a great audience for them). Whatever inventory is not sold can be filled by Google’s ads.
Prosper.
– Saïd
> “considering Fish and Chipses immense traffic Markus is making peanuts ”
Precisely! I’ve been experimenting with the free model on eRomance.com and I have to say I am just personally offended by the low low LOW earnings per user. Its the inefficiency of the model that offends me. The reason: its affiliate marketing all over again – you are COMPLETELY dependent on search engines to be kind to you to make any money. You’re certainly not making enough per head to effectively advertise elsewhere. And frankly, I’m still spending more per click on PPC ads than make per day, even after tweaking the hell out of them.
So in my opinion – free only works when you’re getting serious free traffic .. but I hate having to rely on the kindness of Google for that. I’ve been burned a couple of times and just don’t trust that to be something you can rely on, long term. Free is a good way to build up a new userbase … but its a terrible profit model. Sure you may land a good ranking for a while … but it could be gone tomorrow. Would your banker lend you money for such a business model? If not – its probably not a good risk/gains proposition for most people.
What’s up Neal.
PEACE!
What’s crazy is that Google doesn’t divulge to Publishers what their cut is from your hard earned traffic. Does anyone have insights on what the % split is between Google/Publishers?
I trust that as AdSense and other ad platforms evolve they will be more effective in utilizing the rich data points of personals profiles (yours and those you search for) and serve a gamut of highly targeted ads that yield a higher eCPM.
Suffice it to say ad networks like Tribal Fusion and others pay a higher cpm but in most cases they have limited inventory.
One,
– Saïd
David, Plentyoffish barely exists in boston. That is like saying Match.com doesn’t have a lot of quality profiles in mongolia.
As for paid sites innovating its not going to happen and here is why.
American SIngles has 100k paid subscribers, lets assume they are all in the USA.
Dallas — Population: 1.1 million
USA Population 300,000,000 dallas = 1 in 273 people in the USA.
100,000 / 273 = 366 paying members in dallas.
lets assume 183 are female, and lets say that 30% of them are in the age range you want. Lets further assume all 183 are looking for men. That leaves you with 61 users you can actually contact.
What exactly can american singles do to innovate? Reduce the number of people shown per search result page so it looks like they have more members? Toss in random non paying members so people send them emails and they convert? Even if they do this they have to keep response rates high enough so members keep coming back.
I predict these second and third tier paid dating sites will die off because they won’t be able to maintain critical mass.
As for innovating I say who cares, Let all those thousands of small sites do Free R&D and if something comes up that works super well clone it in a day or 2.
There are other business-models, like free sites that take “micro-payments” from mobile phones to use special features on the site. For example, Mamba.ru in Russia, uses this model and has more than 3 million active users (9 million registered). At anyone time, there are more than 30,000 users on the site.
Daniel,
That is definately true, unfortunately that only works in some parts of the world. I notice that dating on love.mail.ru has the exact same layout and members as mamba.ru. Same user count and online count as well. Its mamba a division of a of a major ISP ?