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Decoding Monetization Methods of Dating Apps

投稿日 December 02, 2015
By Mona Sharma, Senior Product Marketing ManagerSenior Product Marketing Manager

Swipe right - the new age dating gesture, has permeated the mobile world. Today, users spend almost 90 minutes1 of their day sifting through myriad potential partners, in search of the "perfect fit". This is greater than the average time spent by a user on traditional social networking sites, creating an alternate social network that is distinctly different from its older cousin.

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Global Web Index, Q1 2015, Clickz.com

With a young, increasingly busy, always-mobile audience, the allure of the dating app business is becoming extremely addictive. Tinder is valued at $1 billion with 50 million monthly active users2 and in the east we have Momo with 78.1 million monthly active users, valued at $3 billion3. The intelligentsia might argue the emphasis on the valuations citing that the true value of a business lies in the unit economics i.e. when the user pay! But the trailblazer Tinder is at a serious advantage here as a quarter of its users are already paying for dating services.

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Global Web Index

With the lowering of stigma attached to online dating, technological advancements and a growing target demographic, the industry looks like it will continue to grow for years to come. The dating industry is worth $2.2 billion, but most apps aren't turning a profit. Many haven't even introduced a plan to monetize their services. But there are a few who are leading the way. Here is how they are successfully making money:

Subscription

Like online dating sites, “Subscription” is a common monetization method among apps too, where users can purchase either memberships or premium features on a monthly, quarterly or yearly basis.

  • For instance, Tinder recently launched Tinder Plus giving users access to features like Passport and Rewind, as well as unlimited “Like” capabilities. Here instead of charging for the core features, Tinder adds most-requested features to the app’s main feature set by offering in-demand options at a price.
  • The ideal time to adopt the subscription monetization strategy is when the app has a substantially engaged user base.

Freemium

Following the suite of gaming apps, Freemium is a popular strategy among dating apps too, which let users access the basic version of the app for free and charge them for premium features.

  • For instance, on OkCupid you can buy a number of boosts to outshine others. On Skout, you can get featured for 6 hours in the vicinity of your choice.
  • Unlike subscription, which is time-based, Freemium model lets you purchase the premium feature without any time limits.
  • Freemium is a good strategy to adopt for initial user acquisition to reach a critical mass owing to its low barrier of entry for users.

Gifts & Tangible Services

Monetization can be realized by returning to the old fashioned way of gifting. Let users digitally gift their potential dates roses, chocolates, complimentary services like booking a cab, a table, or cover drinks etc.

  • For instance, POF let their upgraded users buy 3 gifts for others each day. On Grouper, once the date is set each person needs to pay $20 to cover the cost of service and drinks.
  • Dating apps can also look to borrow ideas from complementary industries. For instance, social communication app Line, popular in Japan, sold packs of 20-40 emojis and stickers for $1.99 which generated $75 million in the first year of its launch.

Advertising

For a comprehensive monetization strategy, especially for non-paying users, dating apps can look for in-app advertising too. But dating apps need a sophisticated advertising solution, which doesn’t disrupt users’ interactions and doesn’t infringe on their privacy. Native advertising, which respects the form and function of the app, is the best advertising solution available for dating apps.

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In-Feed Ad in the chat list: When a user lands on the chat list, she can be shown a carousel unit promoting an app install, a Buy Now call-to-action for a product or a brand promoting its message.

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Online to Offline: Integrating with offline services like booking a romantic movie for the date, calling an uberBlack or reserving a table at the restaurant of your choice!

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In-Feed Ad in the content stream: If your app has a swipe interaction, a user can be shown an ad in one of the cards.

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Gift Wall: An app wall promoting a variety of digital gifts like a book, a song on Spotify etc.

You can also deep dive into the topic by either watching the video of the webinar or viewing the slides. 1,2 The New York Times 3TechInAsia

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