This article originally ran in the February 2016 issue of AVN magazine. Click here to see the digital edition.
The online dating industry is evolving along with today’s tech-driven hookup culture, creating a new era of opportunity for adult entertainment to flourish.
Adult dating sites continue to be profitable in spite of recent challenges, but executives navigating the space say it’s imperative to make adjustments going forward.
Not unlike other sectors of adult, those who learn to adapt to the market conditions are the ones who will be left standing.
“The approach to online dating worldwide has dramatically changed over the last five years,” said Jenny Gonzalez, vice president of sales and marketing for Dating Factory, a leading European white-label and private-label dating software provider. “Our industry has gone from being something that people were ashamed to admit to using to becoming a pop culture phenomenon (now that we all get Tinder references thrown at us left right and center!).
“The industry has evolved beyond the borders of English-speaking tier-one countries and just a few niches. In fact the dating industry has single-handedly become the bridge between mainstream and adult when it comes to performance marketing. Personally, the biggest difference I have seen in recent years going to mainstream shows has been how dating offers have gone from being hush hush, to where every single marketer out there is looking for specific niches and geos to monetize their traffic.”
Gonzalez said one of Dating Factory’s key accomplishments in recent years has been the growth of its database worldwide.
“One of the biggest challenges when running a dating site is always database related, getting enough members to create interaction and achieving a good balance with male and female ratios,” she noted. “I feel we have done a fantastic job at achieving the right mix and that is one of the reasons people continue to choose to run their dating brands within our platform. Happy users convert and we have happy users in every corner of the planet.”
Dating Factory, which was recently acquired by Agile Wings, has set plans in motion to roll out several new features sooner than later, Gonzalez said.
“Together we will be taking Dating Factory to a whole new level in the near future,” she added. “I am excited about every single bit of that process and what it will mean for our partners and affiliates.”
Bako Kaye, the founder and president of the invite-only ad network Etology, said that his firm specializes in monetizing the members areas of dating sites.
“If somebody joins our network, we make sure we perform,” said Kaye, who launched at the Internext Expo in New Orleans in May 2014.
“Our traffic speaks for itself. We make sure we optimize the traffic to the maximum. We have account mangers for each client to maximize how the clients run their ads. It is not a self-service business.”
Etology last month announced the launch of DatingTraffic.com, a premium ad network focusing specifically on the lucrative dating vertical.
Dating Traffic focuses exclusively on traffic from prominent dating members area networks. Members area traffic is in high demand as it converts at a much higher rate than standard tube or adult traffic.
Kaye said, “the challenge is just to innovate,” adding that one of the evolutions of the community is the different types of pre-landing pages that have become prevalent.
“These pre-landers are giving traffic flow a different tide,” Kaye continued. “It’s not the same idea. It’s not ‘Shauna waiting for you in Burbank’ or Glendale. They’re asking [users] all the questions and identifying them in the sign-up process. The pre-landers came up in the past year and they’re working extremely well.”
Alfonsus Kusuma, also known as “AK,” launched his own CPA private affiliate network called Madzuma in 2015 following nine years as an executive at Dating Gold and five years working in cams affiliate programs.
“I’ve seen a lot of changes year after year,” AK said. “The most significant change that I’ve seen is how competitive the market is. … It’s getting very competitive and it’s not going to stop any time soon.”
AK also pointed to the growth of mobile traffic, which in some places accounts for more than 50 percent of the pie.
“Monetization of mobile traffic is actually harder than it is on desktop for site operators,” AK said. “It’s expensive to obtain leads… Now a lot of dating operators are actually putting ads on their members area.”
AK said that going forward, “The way I see it there are only going to be a handful of big media buyers who are able to monetize what they buy.”
Interestingly, AK noted, “the majority of live cams traffic is deemed to be converting really well.”
“A lot of the big companies have cam solutions,” he said, adding the average lifetime value of a dating site user comes in between $120-$150, whereas a live cam customer is in the $400 range. “Live cams will always be there.”
Among the biggest challenges facing the dating site community this year is legislation, according to Dating Factory’s Gonzalez.
“As with most of the internet, the online dating business continues to be a puzzling concept to many governments,” Gonzalez said. “The rise of so many scams online does not help give the online dating industry the credibility it deserves. That’s why the online dating industry has taken it upon themselves to self-regulate proactively before others do. Dating Factory is in fact a founding member of the Online Dating Association (OnlineDatingAssociation.org.uk), which was established in 2013 by a number of industry insiders who saw the need to step up and take responsibility for setting and maintaining standards.”
AK agreed that “credibility” is the challenge for the adult dating community.
“At the end of the day it’s adult entertainment. Adult dating is adult entertainment and we provide entertainment value,” he said.
