Despite being banned from South Korea and Singapore and blacked out from advertising on Bing, adultery site Ashley Madison has continued to be profitable.
According to an article in Forbes, AshleyMadison’s parent company Avid Life Media grossed $115 million in 2014, up 45% from the $78 million grossed the previous year. 6.8 million users logged in over the last ninety days, out of a total 31 million lifetime users since the site launched in 2002.
Ashley Madison’s wheelhouse demographic is forty to fifty year old married men who are apparently fed up with monogamy and their spouses. According to founder Noel Biderman, the site took six years to get its first million members but the recession of 2008 left many men jobless, at home and alone. Membership has steadily risen since then.
The site is different from subscription dating sites in that men buy credits to contact women after signing up for a free “Guest” account that allows them to send and receive photos and “winks” to and from other users. Men are charged for credits to contact women that get used up over time as the conversation continues. The introductory package includes 100 credits for $49, the Elite Status Package includes 500 credits for $149, and the Affair Guarantee Package includes 1000 credits for $249.
Men are charged, while women get to contact men for free. When it was noticed that men on the site initiate contact with women a whopping 99.6% of the time, it became clear that charging men for contacting women was the way to make money. They also offer discreet billing and charge $20 for a profile to be rendered “inactive” on the site, just to guarantee nosey spouses will never find out.
Insider Take:
While there are noted moral and cultural objections to the service that Ashley Madison provides, there are lessons to be found within its success for other subscription products and services. Ashley Madison has continued to grow and maintain a base of paying users despite strong competition from paid dating sites such as Match.com or eHarmony as wells as free sites like OKcupid and wildly popular apps like Tinder. They have done this by appealing to a somewhat narrow but motivated customer niche and sticking to a business plan where it’s clear they have tested their market and understood their analytics to thrive where their opportunities are.
