Spark Networks

Spark Networks, owner of a handful of niche dating sites like ChristianMingle.com, JDate.com, and BlackSingles.com, has released financial results for the second quarter ended June 30, 2015.

The company has good news to report, primarily centered around attempts to turnaround business after growth stalled for ChristainMingle and JDate. Highlights include:

• Significant, double-digit improvement in win-back rates with key cohorts
• Double-digit improvement on ChristianMingle TV spend efficiency
• New communication platform driving increased user engagement
• Subscriber base stabilized on both JDate and ChristianMingle in July versus June
• Reiterating commitment to subscriber growth in Q4

Chief Executive Officer Michael Egan stated, "We are pleased to have made considerable progress toward transforming our business during the second quarter, and remain on track to return to sequential subscriber growth across both JDate and ChristianMingle by Q4.”

The expense reduction and improved efficiency program Spark Networks announced in 2014 is showing signs of success so far. Excluding direct marketing expenses, cost and expenses in the second quarter of 2015 were $7.1 million, a decrease of 20% compared to the year ago period. Direct marketing expenses in the second quarter of 2015 were $5.3 million, a decrease of 33% compared to the year ago period and a 12% decrease compared to the prior quarter.

On the downside, revenue in the second quarter of 2015 was $12.3 million, a decrease of 22% compared to the year ago period, and a 9% decrease from the prior quarter. The decreases were primarily driven by a loss in paying subscribers, particularly for the Christian and Jewish Networks segments.

Spark Networks plans to continue its “crawl, walk, run” strategy for the remainder of 2015. A re-design and re-architecture of the company's core websites is in the works. An updated JDate experience is expected in early Q4, followed by an updated ChristianMingle experience in the latter part of that quarter.

Other product improvements are in the works concurrently. An upgraded communication platform has dramatically increased users' interactions, and improved mobile offerings have also seen a positive response.

In addition to improving the product, Spark Networks is working hard to improve its marketing strategy. Changes have been made to the customer acquisition and retention programs with good results. The company has seen in excess of 10% efficiency gains with their ChristianMingle television marketing spend, and July 2015 generated more initial registrations on JDate than any month since the first quarter of 2014.

"It is important to note that this is just the start,” stated Michael Egan. “As we roll out new and refreshed products, and continue to enhance our operational capabilities, we expect to drive continued improvements in customer growth and retention.”

For more on Spark Networks 2 most popular dating services you can read our Christian Mingle review and our JDate review.

Late last year, a lawsuit was discreetly filed by Spark’s popular niche dating website JDate against dating app JSwipe. According to Forbes who broke the story, JDate claimed that JSwipe was infringing on the company’s trademark “J” by using it in the name of their app.

JDate isn’t the only Jewish online dating website that caters to the Jewish community and uses the letter “J” in its offerings. There is also JCrush, JWed, JPeopleMeet, Jewish Café, and Jewcier to name a few. In fact, it seems difficult to name a niche dating app catering to the Jewish community without using the letter J. But there is more to the story, which potentially puts all online dating sites and apps in danger of patent infringement.

In the lawsuit, JDate also claims it owns the patent on software that “confidentially determines matches and notifies users of mutual matches in feelings and interests.” JSwipe is similar in its process to Tinder, which also notifies users when matches swipe right on their picture. This is in violation of JDate’s patent.

Why then has JDate not sued other websites or dating apps, since this is such a broad definition of matching that almost every dating app and website uses? Notifying users of potential matches is the bread and butter of online dating. Why not go after an app like Tinder?

The key might lie in the competition JSwipe presents, especially if it is gaining market share in the niche online dating space. According to the Forbes writer who broke the story, JSwipe’s founder David Yarus confidentially confessed the lawsuit to him, though he is forbidden from discussing details. Instead of accepting JDate’s acquisition offer (which he considered too low), he decided to fight the lawsuit rather than sell. (For all you fans of Silicon Valley on HBO, this sounds vaguely similar to Pied Piper’s plight as an up-and-comer in the tech world.)

But JDate might have a case against JSwipe. According to Forbe’s research into intellectual property law, the language used in JDate’s patent was registered in 1999, and it is broad – broad enough (as mentioned earlier) to cover most dating websites and apps on the market today – so they could essentially claim IP infringement over any other company in the space. According to analysts, this might be a move by JDate to acquire JSwipe for a steal. Chances are if they tried to sue Match or Tinder, those companies' lawyers would be able to fight and win. JSwipe is too small a player.

Using the letter “J” in a dating app or website is apparently less clear-cut in legal terms. JDate would have to find evidence that users confuse Jswipe with JDate, which means asking users to testify that they thought Jswipe was part of JDate, or somehow affiliated, which would be trickier and more time-consuming.

JSwipe is fighting back. They have set up a crowdfunding website and asked for Jewish lawyers to take them on pro bono. 

For more on the Spark Networks dating site, you can read our review of JDate.

Spark Networks operates two of the best-known niche dating sites in the biz – JDate and ChristianMingle – but lately both brands have taken a hit. JDate's userbase has slowly been declining, while ChristianMingle saw an abrupt drop following a cut in advertising spending.

Now Spark Networks is making plans to implement a broad turnaround strategy. The strategy is divided into two action items: upgrade technology for both websites and redeploy advertising funds for ChristianMingle in a more intelligent manner.

To fully understand the need for a technological upgrade, you first have to appreciate how far Spark Networks has come. Its sites have used the same basic technology and design for the last seven years, a feat practically unheard of in the Internet Age. An update is long overdue.

Mobile versions of the sites are either already available or will be launched soon, and a revamping of site architecture is in progress. The latter project means making future adjustments to keep up with the changing times will be a much simpler matter.

Where marketing is concerned, JDate has little to worry about. The site is so well known that it spreads primarily by word of mouth, and about 90% of its revenue remains after accounting for direct expenses. ChristianMingle, on the other hand, has struggled to achieve the same notoriety despite having more overall users.

The new marketing strategy for ChristianMingle has multiple components. First, the site will focus on select urban centers rather than large nationwide campaigns. The company plans to partner with mega churches and Christian organizations to deepen their ties within communities.

Second, Spark will make changes to its internal emailing efforts. Email blasts sent to all users will be nixed in favor of highly targeted messages sent to the right consumer, at the right time.

Finally, Spark is looking to attract new users who don't consider faith the most important thing in their lives. The company plans to bring more humor into its advertising in hopes of appealing to an audience who doesn't consider Christianity to be as central to who they are. Unlocking this larger portion of the market should give Spark a dramatically larger pool of potential subscribers to draw from.

Plans farther down the line involve expanding revenue opportunities by providing products throughout the life-cycle of a relationship and beginning a fremium website aimed at younger users. Both could be serious boons to ChristianMingle's turnaround strategy, but for now they're on hold until Spark Networks executes its current goals.

Is there an online dating downer worse than finding out your new flame looks nothing like their profile picture? Total letdown, right? As online dating offenses go, it's high on the list.

Zoosk devised a solution to this all-too-common problem back in 2014. The feature, dubbed Photo Verification, confirms the authenticity of members' profile photos. If your photos pass the test, you receive a green Photo Verified badge.

Photos are verified under the Verification section (surprise) of your profile. Select Verify Photos and you’ll be prompted to record a short video of yourself. Zoosk’s moderators review the video and, if they feel your photo is an accurate representation, you'll receive an email letting you know that your photos are verified. The badge will automatically be added to your profile and your video selfie remains private.

The Photo Verification feature made Zoosk the first company to address this prominent online dating concern. With its launch came newfound levels of transparency, increased trust between online daters, and better first-date satisfaction.

“One of the most important concerns of online daters is going out with someone who doesn’t really resemble their profile picture,” said Shayan Zadeh, co-founder and CEO of Zoosk. “By innovating a system for our members to validate the accuracy of existing profile photos, we believe we can create better first-date experiences that will lead to lasting relationships.”

Photo Verification will now take a starring role in Zoosk's “First Comes Like” advertising campaign. “The message from our last campaign was successful in differentiating us from other sites,” Katherine Knight, brand manager for Zoosk, told Marketing Daily. “For our new campaign, we wanted to build on that and take it to the next level.”

The “First Comes Like” initiative highlights the fact that building a lasting relationship requires time, and that “love at first sight” is rare. In one ad, a woman uses Zoosk's mobile site while a voiceover explains the message of the campaign. Another 15-second spot hones in on the photo verification feature, showing a man trying to identify his date in a crowded coffee shop using the Zoosk app.

“Everybody wants love to be a big, huge fairy tale. But the reality is, before all that can happen, you have to fall in like first,” said Tony Zimney, creative director at Muh-tay-zik Hof-fer, the agency that created the campaign. “Each one of our spots highlights this moment of like.”

The commercials will begin airing nationally in the beginning of July.

It's been a year of bumps and bruises for Zoosk.

After reaching 26 million users in 2014, the online dating network announced plans for a $100 million IPO. It was major news, but now Zoosk has submitted a regulatory filing to withdraw its plan to go public.

In an email to VentureBeat, Zoosk chief executive Kelly Steckelberg offered the following explanation:

“Since the time we filed, the market condition around comparables that would be used to help value our company, like Angie’s List and Care.com, have not performed well. While the overall market might seem receptive to a public offering, subscription businesses have suffered.”

The canceled IPO isn't the only wound Zoosk has suffered recently. The company's founders, Shayan Zadeh and Alex Mehr, abruptly handed over executive control to former CFO Steckelberg at the end of 2014, leaving some to wonder what happens when a founder-led company loses its founders.

In the wake of those major developments, Zoosk implemented a new strategy focused on its customer base and on attracting fresh talent behind the scenes. The company reduced its workforce by approximately 15 percent to better align with its new strategy, leaving morale at an all-time low. The company was in desperate need of reevaluation.

Vice President of Marketing, Carol Mahoney, worked with a team of 3 human resources professionals to identify four areas of improvement. First, to serve customers better. Second, to boost engagement of employees. Third, to get clear on the company's vision and mission. Fourth, to achieve sustainable growth.

According to CIO.com, Mahoney found that transparency was a key issue. Employees were desperate to know what was happening in the midst of such upheaval and sought open communication from top-level executives.

"We realized we had to over-communicate about everything that was happening to make sure people knew we cared about their fears and their anxieties,” Mahoney says. “Now, we talk about our profits, our subscription base, hiring, attrition -- everything. People need to trust that we're honest about the ups and downs of the business if they're going to stay.”

Zoosk also highlights company culture to set it apart from the fierce competition in its native San Francisco. Dogs are allowed in the office. Weekly happy hours are hosted with beer on tap. Employees are encouraged to volunteer in the city's most disadvantaged areas. Three-day hackathons are held to develop new ideas.

Although Mahoney says there's still work do be done, she's feeling positive about the future. “We've made huge strides and we're going to be stronger than ever because of the emphasis we've placed on retaining our talent," she says.

Spark Networks – owner of ChristianMingle.com, JDate.com, BlackSingles.com, and more – has released financial results for the first quarter of 2015.

Revenue in the first quarter of 2015 was $13.5 million, a decrease of 19% compared to the year ago period and a 5% decrease from the prior quarter. The decrease was primarily driven by a 25% drop in average paying subscribers, particularly in the Christian Networks segment.

Direct marketing expenses in the first quarter of 2015 were $6.1 million, a decrease of 47% compared to the year ago period and an 18% increase compared to the prior quarter. Much of the decrease resulted from a new marketing strategy for Christian Networks.