Category: First Beat Media

In World Of Online Flirting, Virtual Gifts Are Big Business

Posted on February 13, 2010

Virtual gift1 MIAMI HERALD – Feb 12 – Virtual gifts have become a $1 billion industry in the U.S. and $5 billion worldwide. Snap Interactive runs the Facebook app. "Are You Interested?'' which introduced a gift store two months ago. CEO Clifford Lerner said the app. is raking in "a couple thousand dollars a day'' just from gift purchases starting at $1.25 for a heart, to $20 for a picture of an engagement ring or gold bricks. "We've actually seen that the higher cost of some of these gifts, the more we actually sell,'' Lerner said. "If a girl is not interested in a guy, and she sees he spent $20, she's probably going to respond. And that's worth it to the guy, just to get a response.''

Mark Brooks, a social media and Internet dating consultant, has seen companies recently introduce new features like virtual goods or mobile dating services. As the online dating space becomes more saturated, finding extra revenue is more important. "It's more difficult to get started, it's more difficult to make money in this market,'' Brooks said. "Virtual gifts are definitely in right now.'' PlentyofFish discovered that as a gift's adorability factor increased, so could the price. "The cuter they are, the more receptive they are,'' said Kate Bilenki, Director of Love at PlentyofFish.com. "Teddy bears, hearts, bunnies, cute things like that.''

Avid Life Media's HotorNot.com got the virtual gift ball rolling in the dating scene back in 2002 by selling virtual flowers which now cost $2 to $10 each. At AshleyMadison.com users can send a virtual bottle of champagne or hotel room key. "The growth rate is phenomenal,'' said Noel Biderman, president of Avid Life Media. "If it has the right impact, people will pay to replace words.'' AshleyMadison has 5.2 million members and has seen spending on virtual gifts jump from 2.4% to 4.1% of total user revenue in the past year.

This kind of success is persuading other sites to give it a spin. First Beat Media oversees more than 100 niche dating sites like BikerPlanet, GothScene, LatinaRomance and TattooLovers. It's testing virtual gifts. "Seeing a ton of icons of roses and chocolates from other suitors on your page might turn people away from contacting you — doing more harm than good," said Stephen Ventura, director of operations. "We're approaching it very cautiously,'' Ventura said. "We feel it might detour some folk from the relationship finding process.''

The full article was originally published at Miami Herald, but is no longer available.

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