Ever wonder what powers eHarmony, Plenty of Fish, True.com and PerfectMatch.com? We peek under the covers at online dating sites.
Rather than hang out in bars or hope that random dates worked out, the 34-year-old aerospace engineer signed up for eHarmony.com, an online dating service that uses detailed profiles, proprietary matching algorithms and a tightly controlled communications process to help people find their perfect soul mate.
Over a three-month period last fall, Joe found 500 people who appeared to fit his criteria. He initiated contact with 100 of them, corresponded with 50 and dated three before finding the right match. He's now happily in a relationship, and although he was skeptical at first, he says high tech played a big role in his success.
Internet dating sites are the love machines of the Web, and they're big business. eHarmony and similar sites drew 22.1 million unique visitors during just one month, December 2008, according to comScore Media Metrix.
And unlike many social networking sites, they actually make money -- the top sites bring in hundreds of millions per year, mostly in subscription fees.
These online dating services run on a curious mix of technology, science (some say pseudoscience), alchemy and marketing. Under the covers, they combine large databases with business intelligence, psychological profiling, matching algorithms and a variety of communications technologies (is your online avatar ready for a little virtual dating?) to match up lonely singles -- and to convert one-time visitors into paying monthly subscribers.
All is not chocolates and roses online, however. Security is one big challenge for e-dating services, which can attract pedophiles, sexual predators, scammers, spammers and plain old liars -- most notably, people who say they're single when in fact they're married. And sticky questions have yet to be answered over what rights such sites have to your personal information -- how they use it to market other services to you, if and how they share it with advertisers, and how long they store it after you've moved on.
Finally, there's the biggest question of all -- do these tech-driven, algorithm-heavy sites work any better to help people find true love than the local bar, church group or chance encounter in the street?
Armed with these questions, a passably decent head shot, and a very patient wife, I set out to discover what's under the covers in the world of online dating.
The business model behind online dating
A well-oiled Internet dating machine can generate well in excess of $200 million a year in a market that's expected to top $1.049 billion in 2009 -- only gaming and digital music sites generate higher revenues -- and is expected to grow at a rate of 10% annually, according to Forrester Research.
Most popular online
dating sites in 2008
|3. Yahoo Personals||5.21%|
|8. Date Hookup||2.89%|
Most online dating sites generate the bulk of that revenue from subscriptions, although free, advertising-supported sites are starting to gain some ground.
Most dating sites allow users to sign up and create a profile for free.
Before communicating with matches, however, visitors must sign on as a paying member.
To succeed, a site needs to do the following:
- Offer excellent response times. People want instant gratification, so the sites try to give users at least some matches as soon as they've created an account and completed their profiles.
- Convert at least 10% of visitors who register into paying customers -- preferably more.
- Deliver an acceptable range of probable matches and offer a variety of ways to pursue those prospects, including high-tech developments from video chat to photo-realistic avatars.
- Keep the quality of the prospect pool high by weeding out inactive and misbehaving users and by blocking the 10% or more of new accounts every day that are estimated to be scammers, con artists, criminals, sexual predators and other undesirables that can overwhelm a site and drive away paying customers.
The battle isn't over once a service has its inventory in place and has paying customers. The business needs to keep priming the pump to bring on new subscribers because the typical customer -- one of the 10% who actually pay -- stays on less than three months.
But one man's folly is another man's fortune: A large percentage of customers fall off the love wagon after finding their "one true love." They keep coming back over and over again, producing a revenue stream that has a very long tail, says Herb Vest, CEO and founder of the dating site True.com.
Step 1: A perfect match, served up fast
Online dating sites take two basic approaches to provide users with matches.
Online personals services such as Yahoo Personals (which costs $29.99 for one month, $59.97 for three months or $95.94 for six months), are glorified search engines -- big, searchable databases. Users fill out a short profile with check-box items and short descriptions about themselves.
They then narrow down the search by filtering prospects using criteria such as gender, ZIP code, race, religion, marital status and whether or not a person is a smoker. Users filter through the results themselves, deciding on their own which prospects to pursue.