Match Group

It’s no secret that eHarmony and Match.com are old rivals in the online dating space. Match.com has been building its empire through its parent company IAC, which has bought several successful dating sites and apps, including Tinder. eHarmony has remained focused on its technology and matching success, and has expanded to include matchmaking services for VIP clients who are willing to pay. In December, eHarmony plans to launch a new career-matching site as well.

Now it seems despite the different directions the companies are going, they still remain fierce competitors, especially when it comes to marketing and attracting new users. eHarmony recently ran a “#1” campaign, citing its success in making more long-term matches than any other online dating website. The problem is, without concrete numbers from all sites, it’s a little tough to prove. At least, according to the National Advertising Division (NAD), an investigative unit of the advertising industry’s system of self-regulation. The unit is administered by the Council of Better Business Bureaus.

This week, the National Advertising Division (NAD) recommended that eHarmony discontinue using certain “#1” advertising claims for the company’s dating website, including “#1 Most Marriages,” “#1 Most Enduring Marriages,” and “#1 Most Satisfying Marriages.” It seems that Match.com was the first to ask the regulators to look into the matter.

NAD reviewed claims made by eHarmony in broadcast, print and Internet advertising, following a challenge by Match.com, LLC. Match claims that this is advertising is misleading, as the numbers of marriages produced by both sites is extremely close. Also, eHarmony didn’t take into consideration Match’s entire network of sites co-branded under different names. This makes Match.com’s numbers much larger, and perhaps greater than eHarmony’s.

NAD concluded that, although the number of marriages that should have been attributed to Match could not be pinpointed, the actual difference between the number of individuals within the sample who met their spouse on eHarmony versus Match.com was even smaller than reported by eHarmony’s survey, or possibly favored Match.

In addition, eHarmony claimed its study was independent, although its co-authors included a former director of eHarmony Laboratories and a scientific advisor to eHarmony. When NAD informed the company of their findings, eHarmony agreed it would no longer describe the study as “independent.”

eHarmony, in its advertiser’s statement, said the company “respectfully disagrees with much of NAD’s analysis of our specific advertising claims.  However, because eHarmony values the NAD process and appreciates the NAD’s efforts, we will take NAD’s recommendations into consideration in our future advertising.”

In a recent interview with Business Insider, eHarmony CEO Neil Clark Warren lamented the growing popularity of dating apps like Tinder, where users can swipe left and right after judging someone based on a few photos and short description. Many people prefer the ease and accessibility of dating apps to filling out long questionnaires or writing detailed profiles.

As a psychologist, Warren has touted the benefits of matching based on compatibility - eHarmony's mission and the basis of its marketing – as opposed to the pitfalls of just leaving things to chance. He believes that the game-like dating experience apps like Tinder offer could lead to superficial relationships that don't last for the long-term. 

"I’m sad about it, to tell you the truth, because it doesn't work," he told Business Insider. "It won’t work over time. These new apps tend to be so superficial. They will allure a lot of people into thinking that they belong together when they perhaps don’t belong together at all. They’re depending on superficial almost accidental compatibility. Compatibility is a serious matter, and it’s very deep and very important to figure out."

Tinder has taken the dating world by storm, almost rendering traditional online dating sites with algorithms and matching technology passé. Instead, Tinder has managed to present dating as more like a game - something that engages people and is easy to use, if not very focused on the end result.

But one has to ask: why should any dating app or online dating company be invested in people coupling up? It takes away their business in an industry that relies on sheer numbers in order to sell their product or attract investment dollars.

Dr. Warren however, maintains that he is focused on the end goal: matching people for the long-term, and doing it scientifically. He tells Business Insider that while "it isn't horrible to date people who aren't perfect for you," he thinks that these relationships will accidentally extend into something long-term, like marriage, where the partners eventually split. 

"These companies that are bringing out these apps, they haven't done any careful research about what works," Warren said. "They're just trying to throw something out there that makes money for the company."

He added: "As a psychologist, I've presided over the funerals of an awful lot of marriages, and I've seen people suffer a tremendous amount of pain who went through horrible divorces."

While this might be a little misleading - after all, to some extent, love happens by chance - be it through a dating app or an online dating site, or even while standing in line for your morning coffee. Connection happens, and sometimes it just has to be pursued, regardless of how compatible you are. But for those looking for more serious relationships, would you place your heart in the hands of Tinder or eHarmony?

A recent article in The New York Times shed light on a particular problem that’s been rearing its ugly head lately: companies are conducting secret experiments with users of social media and online dating sites. Facebook recently revealed that it manipulated the emotional content of news feeds of 700,000 people to see if emotions were contagious. In addition, OkCupid recently shared the results of its own three secret studies of users.

In one test, OkCupid obscured profile pictures so that people could communicate, but they couldn’t see who they were communicating with. The dating site found that members had more meaningful conversations, exchanged more contact details, and responded to first messages more often. When pictures were revealed, many conversations stopped.

In another test, OkCupid hid profile text to see how it affected personality ratings. In general, more attractive users were regarded as more personable – in other words, users were equating looks with personality – even though there wasn’t much information to go on.

The third experiment was the cause of the most controversy, where the site lied to a portion of users, telling them that matches who were (according to OkCupid algorithms) 90% compatible were actually only 30%, and matches with very little compatibility were told they had high compatibility. The end result? Communication went up when people thought they were being matched with someone very compatible, because OkCupid gave them that impression of compatibility, even if it wasn’t the truth.

While it’s interesting to note that people can be swayed by looks and influenced by what a dating site tells them might work, is it really going to improve the overall experience of online dating? In other words, we might track people’s behavior to understand it a little better, but deceiving people to see how they behave is a slippery slope, and doesn’t really improve the current dating experience on OkCupid (or any site). As the study noted, as soon as the pictures were revealed, people went back to their old patterns of behavior.

Facebook and OkCupid aren’t the only sites studying user behavior, and probably aren’t the only sites conducting experiments on users. But before we continue down this path, it’s important to ask: who are these studies really benefitting? Are they helping us to become more open-minded daters? So far, not really.

The study succeeded in making online daters even more cynical about online dating. How do they know if what OkCupid is telling them about compatibility or ratings is true? It makes the already confusing world of dating a little less friendly and upfront. Dating needs more honesty, not less.

IAC fell slightly short of expectations in Q2 2014, but nevertheless had a solid second quarter.

Subscribers are up where IAC's dating sites are concerned, but revenue dropped in its Search & Applications unit. Match Group revenue increased 8%, as paid dating subscribers grew 10% to 3.5 million globally.

The Media segment fell 36% to $36.7 million, due primarily to the closure of the Newsweek print business and the sale of its digital business. However, video site Vimeo increased revenue over 45% and reached nearly 500,000 paid subscribers. Websites revenue also increased 1% and page views grew 8% to 8.5 billion.

Search & Applications was the weak link in the chain for Q2 2014. Revenue declined 7%, enough that it could not be offset by growth elsewhere. On the whole, consolidated revenue declined 5% year-over-year. Consolidated Adjusted EBITDA dropped 10% compared to the previous year. Total revenue for Q2 2014 is $756.3 million, down from $799.4 million in Q2 2013 and below the $796.6 million consensus estimate of analysts consulted by Thompson Reuters.

Looking to the future, IAC will push forward with its new marketing campaign for Match and plans to put a renewed focus on native mobile apps. IAC will also acquire the Princeton Review, an in-person tutoring service that publishes college rankings, via its online-only tutoring firm Tutor.com. And then there’s one thing that gets more attention than any other: Tinder.

IAC says it intends to monetize the popular dating app this year, and stands to make quite a hefty sum. Greg Blatt, chairman of IAC’s Match Group unit, said recently that Tinder has the potential to generate as much as $75 million a year in earnings (before interest, taxes, depreciation and amortization).

“It’s growing like a weed,” Blatt said, but earning money from Tinder is still “a work in progress in terms of exact manner and timing.” Several monetization possibilities are available to IAC at this point. Back in April, IAC chairman Barry Diller said three approaches are currently under consideration:

• Subscription
• Advertising
• Freemium (which offers basic access for free and charges for additional services)

Tinder certainly isn’t hurting for opportunities, so at this point any direction seems like a real possibility. “I have been developing online businesses for quite a while now,” Diller claims, “since the Internet started. I have never had the number of people banging through our doors to see if we would sell them a little piece of Tinder.”

So far it hasn’t happened, but don’t think he doesn’t have something up his sleeve. “We have got lots of little areas marked for revenue,” Diller said. “You bleed into them over time.”

For more on these 2 dating services you can read our reviews of Tinder and Match.com.

The Internet has been afire recently with the news that both Facebook and OkCupid have experimented on their users. Both companies have apologized or pseudo-apologized for their actions, while being careful to note that such online experimentation isn’t uncommon.

OkCupid took it one step further in their non-apology, candidly declaring that “if you use the Internet, you’re the subject of hundreds of experiments at any given time, on every site” and revealing two more experiments they’ve conducted on users.

The first was born out of OkCupid’s short-lived blind date app. To celebrate the app’s release, OkCupid removed all the photos from the site on launch day. During those seven photo-less hours, OkCupid noticed some interesting things:

• Users responded to first messages 44% more often
• Conversations were deeper
• Contact info was exchanged more quickly

In short, OkCupid functioned better without pictures. When the photos were restored, the conversations that had started blind melted away. “The goodness was gone,” notes the blog post, “in fact worse than gone. It was like we’d turned on the bright lights at the bar at midnight.” The blind date app revealed a similar phenomenon. When users got to the date, they had a good time more or less regardless of how physically attractive their partner was. “Basically,” the post reads, “people are exactly as shallow as their technology allows them to be.”

In a related experiment, OkCupid decided to test its original rating system that allowed users to judge each other on two separate scales: Personality and Looks. “Our thinking was that a person might not be classically gorgeous or handsome but could still be cool,” the blog explains, “and we wanted to recognize that, which just goes to show that when OkCupid started out, the only thing with more bugs than our HTML was our understanding of human nature.”

After gathering the data, OkCupid found that “looks” and “personality” were essentially the same thing to users. They ran a second, direct experiment to confirm their hunch that people just look and pictures and ignore profiles. A small sample of users were shown profiles that did not contain text, resulting in two sets of scores for each profile: one score for the picture and text together, and one for the picture alone.

The results were predictably disheartening: text is less than 10% of what people think of you. The blog says it best: “your picture is worth that fabled thousand words, but your actual words are worth…almost nothing.” Ouch.

Facebook caused a huge outcry back in June when it revealed it had manipulated the news feeds of over half a million users as part of a psychological study to examine how emotions spread on social media.

The response was intense (to say the least), but Facebook is far from the only Internet company to treat its users like lab rats. OkCupid fessed up to conducting studies on its members via a blog entry posted on July 28. And they weren't exactly apologetic about it.

“We noticed recently that people didn’t like it when Facebook 'experimented' with their news feed,” the entry reads. “Even the FTC is getting involved. But guess what, everybody: if you use the Internet, you’re the subject of hundreds of experiments at any given time, on every site. That’s how websites work.”

Admittedly, they have a point. No matter how popular or successful OkCupid is, there are always improvements to be made and the only way to discover those improvements is to conduct experiments. Or, in the site’s own words, “OkCupid doesn’t really know what it’s doing. Neither does any other website. It’s not like people have been building these things for very long, or you can go look up a blueprint or something. Most ideas are bad. Even good ideas could be better. Experiments are how you sort all this out.”

In this case, the experiment told users they were more compatible than they really were to test the power of suggestion. Typically, among users who were given a 30% compatibility rating by OkCupid, a single message from one to another turned into a conversation just 10% of the time. But, if OkCupid told users with low compatibility that their compatibility score was 90%, the odds of having a conversation jumped to 17%.

The experiment found the same results in the opposite direction. When users with 90% compatibility were told their score was only 30%, the likelihood of a conversation dropped from 20% to 16%. OkCupid isn’t at all surprised that users take the compatibility rating so seriously – “after all,” notes the blog post, “that’s what the site teaches you to do.”

Then OkCupid took a step further. The question became “Does the displayed match percentage cause more than just that first message – does the mere suggestion cause people to actually like each other?”

As far as this data goes, the answer is yes. When OkCupid tells people they’re a good match, they act as if they are, even if they should be wrong for each other - which means that at the end of the day, the myth of compatibility may be just as powerful as the truth.