IAC have said it is only “a matter of time” before they monetise Tinder with advertising.
Gregory Blatt, the head of IAC’s dating division, Match Group, said that despite only 5% of their total dating revenue coming from ads, Tinder’s format lends itself well to this monetisation strategy.
He said: “Advertising has not been a great monetization vehicle in this category, traditionally.
“I think Tinder has the possibility of changing that.
“I think the nature of the Tinder user experience presents itself – presents real opportunities for native advertising that certain of other products don’t.”
Blatt also said that unlike subscription-based properties such as Match.com, Tinder could offer Ã la carte, lower priced transactions, purchased through the App Store.
Because of the app’s sheer number of users – and their high engagement – such small transactions could “create meaningful, meaningful revenue”, Blatt said.
However despite saying a monetisation of Tinder was coming “soon”, he said IAC’s strategy was more about “nailing the business model as opposed to a push for maximum revenue.”
In the Q1 2014 earnings call, they also revealed that the app is now completely owned by IAC and the Tinder executives, led by CEO Sean Rad.
This is following the widely reported 10% buy-back of stock from venture capitalist Chamath Palihapitiya, which led to a false Bloomberg report that valued Tinder at $5bn.
Blatt also said that Tinder was helping to bring new users to dating, and to their other services:
“A large number of Tinder users, I think you know, are new to the Dating category. This is driven by a large number of under 25-year-old users, which has never been a demo that we’ve been able to attract effectively before.
“This drives a lot of incremental adoption. This is bringing new people into the category that would not otherwise be there. It’s also a big driver of engagement.
“Tinder users who are not new to the category are approximately 50% more likely to use multiple products than category users generally.”
Global downloads for Tinder in March were said to be up 15% over February, and up 300% over the 2013 average monthly user.
Answering a question on a prospective spin-off of their dating services, IAC executives remained coy, trying to answer the question without hinting at anything.
Yesterday we wrote about the potential spin-off of Match Group, and the monetisation possibilities of Tinder, read it here.