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Inside The Online Dating Industry
by Joe Tracy, publisher of Online Dating Magazine

How Free Online Dating Services Make a Profit

 

 

Perhaps you’ve visited a free online dating service like PlentyOfFish.com or Okcupid.com and have wondered, how does a free service (which has huge server fees when thousands of people sign up) turn a profit? If they are paying a few thousand a month in various fees what in the world could posses them into thinking offering online dating is smart?

You will find the answers and facts to be both surprising and enlightening.

According to published reports, PlentyOfFish.com makes $10,000 a day from Google Adsense, those text ads that you see on many sites, including this one. You can do the calculations… $300,000 income minus a few thousand for server fees, staff, and maintenance = a huge monthly paycheck (not quite as huge after taxes).

But that’s not all. Because PlentyOfFish.com is a free online dating service, it regularly attracts tens of thousands of people not willing to invest $49 a month to find “true love” on a paid online dating service that also forces visitors to endure a lot of ads, including popup ones (big mistake for online dating services).

So not only is PlentyOfFish.com profiting from Google Adsense, but it is also building a massive database of online daters – hundreds of thousands. And when you have a database that huge, you start to attract attention from the bigger online dating services who covet those users. PlentyOfFish.com could end up selling its business for millions of dollars!

Not too bad for a free online dating service, huh?

There’s also something else interesting that comes into play here. Some of these sites are downright… um… how do I say this… ugly! And some Web marketers are now theorizing that being an ugly site brings them more money because people click on an ad or Adsense link in order to leave the site, thus bringing the site owners more income. It’s unfortunate, but we may find more and more ugly sites popping up as people seek to fatten their pocketbook.

Over the past several weeks we’ve discussed starting an online dating service, but that discussion has been targeted at sites looking to charge for subscriptions. Now we’ve taken a look at a reason to reconsider your business model because free online dating services can make big money too! It's a matter of having the right plan at the right time with the right people.

Note
This month's editorial reads quite a bit like an Inside the Online Dating Industry column, therefore you may want to check it out. The editorial examines the impact of Spark Networks decision to change ChristianMingle.com to Relationships.com.


Tip of the Week
Last week's tip was about regularly publishing press releases to help increase your traffic and recognition. We also talked about how links were a vital aspects of Web marketing. This week we'll take the next step in the importance of links by discussing extended text ad advertising.

Tip #7: Extended Text Link Advertising
Most of the tips I share are things you can do for virtually free to help drive traffic to your Website or build your user database. This week, however, I'm going to discuss an important element of text ad advertising and tell you why buying one month will do virtually nothing for your search engine rankings.

For a text ad to help you, the site you purchase the ad on should have the same theme as your site (online dating), be reputable, and have a decent Google Page Rank (5 or higher). When you've identified these sites, it's a good idea to purchase a campaign that is multiple months and make sure the text ad links directly to your front page. The reason is because the purpose of your campaign is three-fold:

1) Bring more traffic.

2) Slightly help your search engine rankings (through search engines counting the link as one pointing to your site through a reputable same-themed site).

3) Increase site branding and recognition.

In a short campaign (like one month), you lose the benefits of #2 and #3. You lose the benefit of #2 because some of the most important search engines now place a "delay" on officially counting links back to your Website. They do this to try and stop people from "buying" their way to the top of search engines. When the delay (several months) ends, if your link still isn't there then it isn't counted. In addition, you lose the benefit of #3 because if you are not constantly keeping your name in front of a site's visitors, then they won't visit or recognize you. And positive recognition is a vital aspect of branding. Ad studies show that it takes a certain number of ad impressions before a user will consider taking action. Thus you need to always find ways of keeping your name in front of people. So those who only do one month campaigns and stop get very little benefit from their campaign.



Joe Tracy is publisher of Online Dating Magazine and is often quoted by the media in relation to online dating topics. His Inside the Online Dating Industry column is published every Friday.


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