Dating is becoming one of the biggest VAS sectors, but while growth is global, services are very local, very competitive and highly evolved. Paul Skeldon takes a look at what the dating market looks like and how to create services that work
Falling in love in 2019 means reaching for a mobile phone and, to use the popular parlance, swiping left or right. Love, it seems is in the air – quite literally, with only the lonely heading to apps and dating sites to find their one true love.
According to a study by Comparethemarket.com back in 2018 – published on Valentine’s Day that year, naturally – 76% of people think it is possible or highly likely to find love online and of the many millions who do use dating apps and online dating services, 56% of men and 55% of women have actually found love.
However, online dating finds itself in an interesting predicament. It is at once booming, with more users than ever, and stagnating – with those very same users become more demanding of the experience that they get from their dating apps. Cupid is confused.
Global Dating Insights editor Scott Harvey explains: “Online dating is in a really interesting place as we close out the decade. In terms of adoption and user acquisition, we’re seeing fantastic growth across different regions and age cohorts. Most of the stigma around meeting someone online has drained away, so a high percentage of singles will have a dating service on their phone or laptop if they’re looking to meet someone.
“That said, there is a lot of talk about stagnation on the product front at the moment. Many users are dissatisfied with the basic swipe-based interface, while plenty feel jaded because they can’t find a real connection. The sector is ripe for disruption because of this, and everyone is asking what the next big innovation will be.”
GDI’s Harvey again: “We’re seeing a lot of new entrants, from the smallest start-ups to social media giants like Facebook, and real opportunity for companies who can crack the marketing and build an engaged community. It’s a vertical that’s only going to get bigger.”
Dating is changing
The dating market is, however, changing. As we have seen, value added services such as dating are being given a boost by affiliate marketing and dating is one of the big VAS growth areas: but success is hard, not least because it is an ever-evolving market, says Prelinker’s CEO, Mauricio Botero.
“It’s a growing sector,” he says. “People are growing up with the web from day zero: they are born with an Instagram account. But this makes it an extremely competitive market and a global market. But it is a very level playing field and so everyone copies everyone else. Your product life cycle is very short. You have to offer a great product and a great experience. They experience great products all over the web and mobile and they want the same when dating.”
This means dating service providers need to be very agile and keep on moving. “We have to be really creative with the features we use and we have to make it entertaining – dating can be like a second job so it needs to be fun and completing,” says Botero. “If you can create an active community with fun features that works then you can differentiate yourself. But it isn’t easy and its getting more complex.”
“Dating is highly varied,” says Carl Borowitz, Marketing Manager, Online Dating Kings. “You have flirt, casual dating and serious dating – so you have to find your place in the market and find what it is you want to offer. We offer anonymity for people that don’t want to use their social media profile, especially women who don’t want to feel exposed.”
Borowitz continues: “There are also all sorts of features that make people subscribe – and these have to evolve all the time. Competition is fierce and you have to constantly evolve.”
For this reason, many dating services are becoming more gamified – but is this something that people want? Comparethemarket.com’s research explored people’s opinions on how gamification affects the way they approach dating through apps.
It discovered that only 7% of people say they often treat dating apps like a game and use strategies to ‘win’.
However, this changes depending on who and where you are; with the 25-34-year-olds, this increases to 11% but among the over 55’s it drops to just 2%. Living in Sheffield (13%) or Greater London (9%) means you’re more likely to treat app dating as a game, but it’s less likely if you live in Scotland (3%), particularly near Edinburgh (1%). Ashley Madison (42%) and Meetic (38%) users are most likely to claim to treat the app as a game.
The question of who treats dating apps like more of a game out of men and women gets slightly different responses depending if you ask men or women. However, they both agree that men are more likely to treat dating apps like a game, with 25% of women and 14% of men agreeing with this statement. Only 8% of men and 6% of women believe women are the most likely to treat online dating as a game.
The other reason that dating is such a huge potential market for VAS providers is that it is international – which provides both opportunity and challenges.
“It is definitely an expanding sector in many new markets and technology is seeing markets leapfrogging each other – so markets that were behind are catching up,” says Botego. “Take Brazil, which was lagging. [Brazilian consumers] now all have mobiles and no one has a laptop and so they are now becoming a massive online dating market.”
According to Botego, dating companies have to address each geography separately too – each one is very different so all products have to be localised and different things work in different markets. This makes it more complex and even more hard to do.
Online Dating Kings Borowitz agrees: “I would say that if someone wants to enter a certain market they have to really understand the local market. I can’t imagine trying to create a services for north eastern Asia, for example, as the culture is so different, which is why we look more at the Germanic markets. But if we do enter a new market we make sure we have someone who is local driving it.”
AI lends a hand
Digital publishers providing personals advertising and dating services can use new artificial intelligence (AI) to increase display ad revenues, minimise data costs and target more relevant consumers for brands, as well as improving the compatibility of matches for singletons.
“The mass of guys with tigers, photos at music festivals, and profiles which list ‘laughing’, ‘travelling’ and ‘going out and staying in’ as defining characteristics don’t do justice to the incredibly insightful information people share with online dating services,” says Fiona Salmon, UK managing director of 1plusX – an AI data platform that is giving digital publishers new tools to combine the interest data from online dating sites and apps with their main display ad audience data.
“Subscribers share their passions, favourite locations, work, education, appearance, family status, salary bracket as well as their age, gender and more. However, numerous publishers offering dating services are neglecting to make maximum use of this data to match singletons with more relevant people and ads,” she continues. “As 1plusX is extremely user friendly, it’s easy to combine dating data with other data sets to be managed from a single user dashboard. Campaign managers can then use the system to creatively define very focused, high quality audience segments with tightly defined interests. As well as providing a better service to singletons, such focused audiences are highly sought after by brand advertisers, meaning publishers can garner more revenue per ad impression. The 1plusX tools can even help dedicated dating sites to monetise their data through licensing deals and partnerships with other publishers.”