• by Ross Fadner , September 30, 2003

Online dating services are hot. So hot, in fact, that resource sites like PremierPersonals.net are popping up all over the Web just to help consumers filter through the multitude of personals sites available to them these days.

There are big sites such as Match.com, friendster.com and AmericanSingles.com. There are medium-sized specific ones such as Gay.com, Amigos Latin Dating, and Adult Friend Finder (swingers only). Then there are the international sites including JDate.co.il (Israel), MatchNet UK, MatchNet DE (Germany); and little creepy ones like Russian Bride Services and Herpes-Date.com.

Chances are, even if you're married or in an otherwise committed relationship, you've either been to one of these sites to see what the buzz is about, or you know a member of one.

The Online Publishers Association, through a study conducted by comScore, found recently that consumer spending for online content sites grew to $748 million in the first half of 2003, an increase of 23% over the same period last year. Of all paid content sites, it was the online personals/dating services that were once again the top paid content category, generating $214.3 million, or 30% of all paid content spending. This figure is a staggering 76% increase over the first half of 2002.

Are these numbers indicative of the leaps and bounds characteristic of so many passing fads, or is online dating here to stay?

Naturally, according to Match.com's research, which was conducted for National Singles Week, September 21-27 2003, the answer is a resounding 'yes.' Their study revealed that 70% of singles believe they can fall in love with someone they meet through an online dating service. Moreover, they have published estimates of being "responsible for arranging hundreds of thousands of relationships for (their) members." The result of such faith among users of dating and networking services is a loyal and reliable consumer base that continues to grow each week; some, in fact, exponentially so.

friendster, a free personals/ networking site where members add as many 'friends' as they can to their profiles, has seen its unique users skyrocket in the last few months from 100,000 per day on August 1, to 600,000 per day by mid-September. "We've been rapidly adding servers to compensate for the tremendous growth," says Scott Swanson, Director of Network Development at Tribal Fusion, friendster's online ad handler. According to Swanson, the average user sees 57 ad impressions per day and every month friendster generates 500 million page views.

But does it pay to advertise on these sites? Swanson admits that this was a problem in the past for friendster's advertisers. "We now sell ad space on a takeover basis precisely because it wasn't paying off for advertisers to buy a certain number of impressions per month. Today we sell all our ad space for the day to one company - today it's AT&T - for a flat rate." At the friendster site, you can see how the ad space is a little less noticeable than at other sites, which is another reason Tribal Fusion changed the way friendster sells their space.

"Since we started selling on a takeover basis earlier this month," says Swanson, "we've already doubled our flat rate to $5,000 per day due to the overwhelming response our advertisers have received from this new format."

For example, Neighborhoodies, a grass-roots clothing designer, has experienced so much traffic that they've already booked 6 days with friendster in the first two weeks of October, Swanson said. Furthermore, friendster's site traffic has been growing steadily at 10-20% per week, which will leave the line to advertise with them long, and the price to do so in the midst of a similar growth spurt.

Somewhat surprisingly, not all dating/personals sites sell ad space. MatchNet plc, one of the largest and most profitable providers of online dating and relationship services worldwide, is perhaps the most noticeable example. Their network includes dating services that cater to different lifestyle and international niches, publishing specific sites for the college, Jewish, German, British, Australian, and gay markets. In spite of their lack of ad revenue, MatchNet boasts a 143% revenue increase in the second quarter of 2003 over the same period last year, and 4.4 million unique users, according to Nielsen//NetRatings.

Like most online dating services, MatchNet's revenue comes from recurring subscription fees and special events. But why no ads? According to Gail Laguna, VP of Communications at MatchNet, "We feel that one of the real benefits of being a member of MatchNet's services is that users are safe from obtrusive pop-up, pop-under, and banner ads. This ensures a better overall experience for our members. By foregoing ad revenues we feel that we make up for that by attracting users to an ad-free environment they can trust."

Laguna asserts, however, that this is not an unbending policy of MatchNet plc. "You can never say never. At this point, it's hard to say. Selling ad space is not something we're pursuing at the moment, but if we could advertise products on our sites that are relevant to our audience but would keep people at the site, then who knows?" One thing Laguna remained firm about was her disdain for pop-ups, pop-unders and the selling of members' information to list brokers, which is yet another testament to the need of the online industry to grow out of annoying its consumers.