The Five-Year Itch

NEWSWEEK -- Feb 27 -- Feb. 27, 2006 issue - Mark Brooks, editor of consumer watchdog Online Personals Watch, says the industry stands at a crossroads. "I keep hearing that the industry is slumping," Brooks says. "No, it isn't, but we have got to get our act together."  Online dating in the U.S. has reached what Jupiter Research analyst Nate Elliott calls "a point of critical mass."Last year the number of users posting online personals fell "marginally," according to Jupiter, and revenue growth is expected to drop to just 6% this year, down from 77% in 2003. The total U.S. market is now worth $521 million. (In comparison, online gambling sites took in an estimated $10 billion in worldwide revenue last year. Porn sites took in $2 billion in the U.S.) The European market is still growing in high double-digit rates.  One reason for the slowdown is that the curiosity factor has worn off. Heather Hopkins, director of research for Hitwise UK says the sites are now focused more on getting current visitors to sign on as paying customers. This love slump is a bit of mystery. Indeed, it may be just a lull. Brooks predicts that the industry will see "a huge upswing" as sites add new services like Web-camera dates, help arranging dream dates and psychological profiling that attempts to find you a soulmate, not just a hunk with the right hobbies and salary profile. Others say the industry needs to move beyond just dating. Bill Tancer, Hitwise GM global research, says e-dating is following the normal trajectory of Internet businesses. "There is an environment of hypercompetition where markets are born, grow, plateau and decline, [but] it's not that the activity itself is going to go away." Instead, he predicts, dating sites will evolve into broader forums for social networking.  There are signs this is already happening. Meetic is offering a mobile-phone network called Superlol, allowing users to form groups around common friends and interests.

Mark Brooks: Reporters are writing about the demise of the online dating industry, which is very unfortunate.  I believe we are, indeed, at a turning point.  To get to 'online personals 2.0' we need to add services and refine our sites to help put people in front of people more quickly, in greater numbers and with better matches.  (i) Personality profiling holds high promise, but needs more research.  Profiling companies should embrace academic resources and share data with them.  Let's lose the 'magic box' approach.  Users are becoming more sophisticated and want to know how personality profiling works.  Let's tell them.  And, if you're going to offer personality profiling, show matches what potential failure modes/conflicts their relationship might be susceptible to, and educate them on how they might communicate and deal with those conflicts.  (ii) Add events.  They're a pain to coordinate, but are a great way for people to meet and have some instant gratification.  They can buy a ticket and meet a roomful of singles immediately.  Then they can go and check the profiles of the people they have chemistry with to see if they are a match on preferences such as 'want kids?'  (iii) Improve safety.  Let's advise users more clearly.  They should: 1. not share contact info, 2. meet in a public place, 3. let someone know where they are going and call in to them after one hour.  Background checks are a long way from being foolproof, but are better than nothing, and worth considering.  (iv) Remove dead and unresponsive profiles, or at least indicate they are unlikely to respond.  Anyone who has not logged in or has not responded to a message for 4 weeks should not be listed as a live profile.  Let's set expectations realistically.  It's good for the industry in the long haul.  (v) Consider adding/partnering with matchmaking services for the users who have money, but are time starved.  People are paying $50 a month for profiling sites (i.e. eHarmony.com, TRUE.com, PerfectMatch.com) because they have money and want some handholding.  Let's up the ante.  (vi) Improve search.  A friend of mine is Indian.  He only wants to meet women who are interested in Indian guys.  He'd like reverse search please.  Niche sites are popping up for every imaginable preference.  Generic sites need to broaden search criteria and functionality or have the niches further incur on their membership revenues.  (vii) Add content.  Do you know your audience?  Really?  Then engage them with targeted, mind blowing content that lights their fires, educates and keeps them hooked on your site.  Match partnered with Dr Phil.  Community Connect, Gay.com and Nerve.com know content.  Guide, engage and captivate your users.  (viii) Find targeted advertising partners.  Find offers with top level brands to improve your brand.  Yahoo + Starbucks.  There's some great branding affinity there.  Brand = Trust.  Advertising on online dating sites doesn't tend to bring in much money, but it CAN improve your brand trust and capital if you find the right partners and negotiate suitable offers.  Extend your brand into the real world.

Online dating is not taking a downturn.  $516 million U.S. online dating industry revenue for 2005 barely scratches the surface of the market potential.  Industry revenues are growing.  We have a nation of lovelorn singles poised and pleading for guidance and assistance.  The integrity of our sites can be improved, insofar as how we deliver on our core promise of putting people in front of people.  Observe the real world, bottle the best of what you see, improve on it.  The online personals world has improved on the real world in the past by offering better search (i.e. asking the important questions up front), offering multiple modes of convenient communication (i.e. email, IM, chat), and through profiling for compatible matches (i.e. asking more than just a few questions...).  Your comments please...

Comments

[Fernando Ardenghi]

"Personality profiling holds high promise, but needs more research. Profiling companies should embrace academic resources and share data with them. Let's lose the 'magic box' approach. Users are becoming more sophisticated and want to know how personality profiling works. Let's tell them. "

I strongly agree, Mr. Brooks!!!

But also, I insist in two segments:

13_to_25_years_old_persons (teenagers) not interested in serious dating; they will use the service for fun (OnLine_Dating and Social_Networking will be the same for them and it will be seen as ENTERTAINMENT == instant gratification. This segment will need more fresh_and_new CONTENTS than quality CONTACTS; mobile applications will peak and decay due to future Legislation and carrier's costs).

AND the most profitable segment:
26_and_more_years_old_persons interested in serious dating. They will need quality CONTACTS (compatible real persons, confidential treatment of information provided, privacy, code of ethics, background checks, etc) like the contacts provided by OffLine Chains, but at affordable costs (If OffLine charges USD1,500 then OnLine will charge an amount between USD300-USD800)
These persons will know that "If any person does not pay for the service or does not want to pay for the service, he or she is not interested in serious dating, or is not interested in investing time and effort in building a new relationship with future in mind".
The next generation of dating and matchmaking (for this segment) will be more scientific than ever, most probably the 16PF5 test (personality profiling) in different languages (or similar test) will be a "must have" in compatibility matching.

Actual compatibility matching sites like True, eHarmony, Perfectmach and others CANNOT change their matching method/technique/algorithm nor improve their reliability/quality; so NEW sites need to be launched soon!!!
Will be interesting to launch a new Personality_matching OnLine Dating site using the 16PF5 test in different languages and to conduct Scientific Research. If this research demonstrates that "what is important in attracting people to one another may not be important in making couples happy" and "only high level on personality similarity between mates/couples is THE CORE of relationship stability and satisfaction == Dyadic Success" then, it will definitively contribute to reduce the divorce rate!!!

Kindest Regards,

Fernando Ardenghi.
Buenos Aires.
Argentina.
[email protected]

[TheSoulMateGuy]

I like it Mark.

Interesting thought I had about the slight slow down or the "newness" has worn off factor.

I would think that the industry itself parallels a relationship. You meet someone and as you get to know them the newness wares off and you're left at a point where you've got to say is it worth it for me to be with this person? Reality sets in a little. So either you leave them or choose to move forward and "create" how it's going to go.

Substitute Match or Udate or whoever with reationship and it's the same thing concept.

The reality is that if people don't see results from the online dating company's they want to blame the industry or online company and move on to another.

In reality they get tired of recreating the same old thing over and over. In a sense people are tired of their own creativity,
or lack of it.

I use an interesting tool with my clients to suggest that they look strongly at what they "don't want" in a relationship. And then I suggest they ask themselves what they do want.

The number one leading cause of all breakups is one individual in the relationship doesn't know what they clearly want. And then they begin to blame it on the other person. And leave the relatiohship with a way out. "Well they don't know what I want".

Once they can see they've limited their scope and begin to focus on what they "don't" want ( law of attraction - if you focus on what you don't want - you get it!)then they can begin to work through their limitation and get real clarity on what they do want. And begin attracting it.

The dating industry is the same. These people are running into their own creativity ceilings and they have to chose to focus on where they "want" to see their business go instead of focusing on the "slow down" or "don't want". Once the industry as a whole chooses where they want to go then they'll go there.

Thanks for allowing me to share.

[email protected]

[Charmaine Steele]

I am a graduate student at Quinnipiac University in Hamden, CT. I am doing my Master’s Project on “Online Dating”. I have to write a long magazine piece of 10,000 words on this topic. I am looking to gain knowledge about the online dating industry from an expert’s point of view. I have already interviewed people who online date and I am interested in learning about what you think about the industry and why it is so successful. If you could assist me that would greatly be appreciated. The questions are included in the email. Thank you for your time.

Sincerely,
Ms. Charmaine Steele
Quinnipiac University Journalism Grad. Student

1. Do you think more men use online dating than women or vice versa and why?
2. Do you think that online dating has become the norm and replace traditional dating, blind dating, speed dating and personal ads? Why or why not?
3. What advice would you give a first time user of online dating?
4. What do you think are the biggest misconceptions about online dating?
5. What do you think dating sites can do to make themselves safer sites to use?
6. Why do you think online dating has become such a lucrative industry?
7. What do you think the online dating industry could do as a whole to make itself more appealing to those who are currently dating but not online?
8. How did you get started in the online dating business? Also how long have you been in the business?
9. Would you consider your business a niche dating site, why or why not?
10. If I asked you to sell your business in a couple of sentences what would you tell first time users about your site?
11. Since you started your business what trends have you noticed in the industry?
12. Where do you see the online dating industry going in the future?
13. Are there any materials or statistics that you have that you could share with me to include in my paper?