Online Matchmaking: Statistics and Economics

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statistics and economics

This page considers uptake of internet dating or match-making services and their economics.

It covers -

uptake and statistics
size
turnover and profitability

uptake and statistics

A 2002 IPSOS-Reid survey in North America claimed that 44% of respondents considered that people had a better chance of finding a partner online than in a singles bar (with 8% rating online services as equal to bars); 32% thought that an online relationship was likely to be more successful than one initiated in a singles bar. Tellingly, only 27% would however recommend online dating to their friends.

By mid 2003 up to 37 million people in North America were supposedly using online dating services each month, whether in search of true love and devotion or merely for gawking and flirting.

That figure is probably subject to significant double-counting (and Brym & Lenton more modestly suggest that a mere 1.2 million Canadians have visited an online dating site) but suggests an interest that is more than ephemeral, even when one discounts hype that

The Internet online dating industry has doubled each twelve months for the past 3 years [ie to mid-2003] and is expected to remain at this growth level for the foreseeable future.

Match.com and Friendfinder.com for example boast around two million and six million subscribers respectively; other services claim over a million subscribers. Love.com claims 550,000 personal ads, with 850,000 members on AmericanSingles.com. A Match.com executive reported in 2004 that subscribers stay for an average of five months.

A 2002 article in Salon, answering "why have people begun peddling themselves so shamelessly online?", suggested that

the anonymity of the medium, the prevalence of blogs, online photo galleries and personal Web sites, and the comfort most of us feel in corresponding entirely through e-mail have combined to make online dating a perfectly acceptable means of meeting new people.

Demand creates supply. When you think for a minute about how inefficient and circuitous the traditional delivery system for meeting potential lovers is, it's not hard to see how we landed here. When your options are limited to getting set up by your friends, going out to parties or going to smoky bars in the hopes of getting drunk enough to knock over someone with a pulse, it's clear why shopping for a mate online has been embraced by mainstream America.

Studies suggest that participation is not restricted to the under 25 year cohort, although under-35 participants appear to be more active and are more likely to have met other participants face to face.

Finding Love Online: The Nature and Frequency of Australian Adults' Internet Relationships (PDF), a 2006 paper by Elizabeth Hardie & Simone Buzwell, reports on a telephone survey of 1013 Australian adults, claiming that 13% had formed online social relationships. They were predominantly "students, young, single, comfortable with new technology, likely to vote Green and unlikely to vote Liberal" but "those who experienced online romance spanned all age, gender, political and religious groups". Most met their cyberpartner face to face; relationships tended to be lasting but "many cyberdaters may be cybercheaters".

As we have suggested elsewhere on this site, anonymity has its discontents. The virtual nature of services encourages participants to actively manage - or manipulate - their online personas: adding/shaving years, kilos, income, status, qualifications, existing relationships. Anecdotal accounts suggest that there is some degree of gender bending and role playing. The Brym & Lenton study, arguably underreporting problems, suggests that around 25% of participants have massaged their personas.

Journalist Mark Simpson sniffed in the Guardian, after a UK government minister was unfortunate enough to be spotted on gaydar.com, that

The evil of internet cruising - and the reason why it will become irresistibly, devastatingly mainstream - is precisely its efficiency. IT plus a wired world means lust can be much more productive, much more accurate, much more all-consuming, and much more pointless. Internet cruising allows you to pursue endlessly and ever more obsessively your ultimate "type". Like an especially well-organised, if unfriendly, Roman orgy, there are chat rooms for every (legal) fetish and taste. Gaydar members can search the database on height, age, hirsuteness, ethnicity, hair colour, pec-size and sex role (passive, active, or variable). There isn't a box to check for "twinkly eyes" or "great sense of humour".

For that, presumably, there is email or chat or even - dare we say it - F2F. Perspectives are provided by Aaron Ben-Ze'ev's Love Online: Emotions on the Internet (Cambridge: Cambridge Uni Press 2004) and by Martin Meeker's Contacts Desired: Gay and Lesbian Communications and Community, 1940s-1970s (Chicago: Uni of Chicago Press 2006).

Indian site shaadi.com offers sorting through "a sophisticated proprietary application developed to ensure a higher degree of matrimonial success by matching profiles with potential compatibility", compatibility including "religious grouping, caste, skin tone" and country of residence.

An August 2004 Leger Marketing report put a different spin on Canada's experience, claiming that 80% of Canadians believe on-line dating and chat rooms are "dangerous" because they don't know who they are dealing with, 69% supposedly reject using the net as a way to meet people and 47% would "completely rule out" using it to make new friends.

size

As with the online adult content industry, authoritative statistics about the shape and size of the online dating industry are unavailable and many claims should be regarded with caution.

It is common to see promotional statements that particular services have several hundred thousand - or even million - profiles and participants. It is less clear whether many of those profiles are active, whether many of the participants share a common identity (ie the one person using several names) and whether many of the profiles are those of commercial subscribers.

Small-scale polling conducted by Caslon Analytics in 2003 appeared to substantiate suggestions, based on comparison of profiles on some general and specialist sites, that many individuals are present on several services - often using the same name and details. The extent of churn from one service to another and within services (eg establishment of a new profile in lieu of a 'dear john' message) is unclear.

Independent measures of 'success' are not available on an industry-wide basis. It is unclear whether 'premium' search facilities and in-depth profile entry produces better results than those from 'profile-lite'. Brym & Lenton suggest that 3% of their online daters who met face to face married someone encountered online, 63% engaged in sexual activity and 60% formed "at least one long-term friendship". One Indian service claims 25,000 marriages out of 800,000 subscriptions. Competitor shaadi.com claims 10 million members worldwide, matchmaking of a million marriages and 300 million page views per month.

An accurate global or national figure is impossible to determine.

Problems are not restricted to online or Western businesses. In 2006 two of Japan's largest matchmakers were caught exaggerating their success rate at arranging happy marriages. An inquiry by the Fair Trade Commission revealed that OMMG and Sunmark Life Creation published grossly exaggerated figures.

OMMG claimed that 130,000 members tied the knot between 1989 and 2004, whereas the actual number was under 65,000. Sunmark claimed many thousands of marriages, although the actual figure was a few hundred.

turnover and profitability

Figures about turnover and profitability are uncertain.

Many estimates and projections vary widely. That is perhaps not too surprising as the operators of most services are unlisted and thus exempt from the discipline of public disclosure to stock exchanges and securities regulators of information about investment, costs, revenue and profits. Subscription fees appear to range from around US$7.95 to US$34.95 a month.

One Jupiter estimate was that the EU market was 'worth' US$45 million in 2000, forecast to increase to US$132 million in 2007. (In 2007 it claimed EU revenue would grow from €243m to €549m in 2011.) A separate estimate put the US industry as having US$72 million revenue in 2001, growing to US$302 million in 2002. It is unclear how much of that turnover was attributable to subscription fees and how much to advertising.

US researcher Mindbranch suggested in 2002 that the global industry involved revenue of US$917 million, inconsistent with estimates from the Online Publishers Association in 2001 that the global market for all "paid content" was a mere US$675 million.

Another report claimed that the UK online dating industry amounted to £600m in 2003, with MarketData Enterprises projected that the global figure for 2003 would be US$1.1 billion. Jupiter had suggested that only 2% of online adults would pay for personals and dating services. The New York Times suggested in November 2003 that US spending on dating sites and online personal ads in the first half of the year was US$214 million.

In 2002 revenue for the US industry supposedly grew by 73% over 2001, with growth of 77% in 2003. That slumped to 19% in 2004, attributable to significantly increased marketing costs and declining consumer interest.

The number of services, location and participant demographics are also uncertain.

Globally the number of services may have increased by four or five times since 1999. However, there are indications that the industry is volatile, with

the closure of existing services keeping pace with establishment of new services
much growth occurring outside North America
most traffic continuing to accrue to the major services
major services seeking to regionalise and sectoralise while leveraging existing hardware and software

As dot-coms, how much are the services worth?

Only a few indicators are available. Match.com was acquired by Ticketmaster CitySearch for US$50 million in 1999 during the dot-com boom. In 2002 its revenue was around US$125.2 million (up 154% on the previous year) with profits of US$36.1 million, up from $2.7 million.

Competitor MatchNet claimed 14.78 million "users" in mid-2003, up from 7.84 million in 2002, with forecast revenue of US$40 million and market capitalisation of US$42 million.

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