Online dating has become the mainstream form of dating in the last decade. Seeing the growth by leaps and bounds, one is compelled to ask: how much money do dating apps make?
The dating apps market has seen a steady growth in revenue from 1.69 billion USD in 2015 to 3.08 billion USD in 2020. The growth is further projected to be 7.22% annually, reaching the figure of 8.5 billion USD in 2021 and 11.28 billion USD by 2025.
It is no surprise that the dating apps market has seen a lot of innovation in the last decade, with different types of business models and monetization methods. As innovation still continues, it is worthwhile to know how dating apps monetize their apps, and why they are so attractive to users who use the apps, leading to the steady growth of the industry. This will in turn be instructive to know how to monetize a dating app.
How Do the Biggest Dating Apps Make Money?
Dating apps are growing every quarter. There is a new app on the store every few months, with a variety of new features. Registration and sign up on most apps is free. Then how do these free dating apps make money? This is an important question for every new startup in the ocean of dating apps. So here is a lowdown on how to monetize a dating app, with inspiration from some of the biggest players in the market.
Tinder is the forerunner of all dating apps, and has been around since 2012, when it started changing the way people date online. Its global market share is the highest in terms of revenue, standing at almost $1.35 billion in the year 2020. It has almost 66 million users, of which 6.7 million are paying users.
Tinder has three methods of monetization via users: Tiers. Super Likes and Boosts. The three are interrelated, though can be purchased separately as well. Tinder offers three tiers, apart from the free membership, which includes features like hiding advertisements, a certain number of super likes and boosts to the profile, additional messaging features, etc.
Apart from these features, the app also monetizes via advertisements on the free tier.
Bumble is a female-focused dating app, with a growing user base. Their revenue at the end of the fourth quarter, March 2021, was 165.6 million $, with an increase of 31%. They reported 2.7 million paying users.
Bumble monetizes by offering a Premium subscription and a Boost to the profile. The model is very similar to Tinder, except that they allow you to subscribe for shorter periods, like one day, one week, etc. The Premium subscription offers additional features like extending your response time (by default it is 24 hrs), setting more filters, and seeing who liked your profile.
The Boost allows users to buy “Super Swipes” and “Spotlight.” Super swipes are a way of communicating to the other person that you are keen on them, and the spotlight makes your profile show up more to users.
They also have additional features for making friends (Bumble BFF) and finding people for business-networking (Bumble Buzz), in the same app. This expands the user base, to other types of connections as well.
The brand message of Hinge is as “the dating app designed to be deleted.” They aim to be effective, rather than most used, and hence win in the long run. The approach to dating on Hinge is different from other online dating apps in that although it incorporates the same casual setting for meeting people, it does not include casual dating as part of its mission; hence the tagline. They have 6 million monthly active users, and 400,000 paying users.
The app is monetized through “Preferred Membership”, which allows additional features like seeing who liked your profile, sending unlimited likes, adding additional preferences and filters to users, and “Boosts” which allow your profile to show up more often in the algorithm.
10 Ways to Monetize a Dating App
There are numerous methods of monetizing a dating app, without disrupting the freemium model. A freemium model allows a greater user-base, and hence, is integral to the business model.
Below are a few methods of monetization which would work well in a dating app:
1. Premium Subscription Tiers with Added Features
The most common and popular method of monetization is through premium memberships, which offer additional features like:
Extend the timeline to respond to someone
“Boost” your profile for more views on the profile
Get a limited number of add-ons like super likes, gifts etc.
See who has liked your profile
Ability to fine-tune the filters for profiles shown to you
Allow an “incognito” mode for additional profile privacy
Undo send for messages
Expiring messages and photos
Saved phrases in chats
More number of profiles in the feed
The pricing tier can be based on geography or the type of user base. Considering that many people like to take breaks from dating on and off, it might be a great option to include shorter billing periods as well as longer ones. The best way to incentivize this model is by allowing free trials or showing the features as “locked” on free accounts, so the users know the options they can avail of when they upgrade. Almost all dating apps work on this basic business model, with variations in terms of features available to users, and different pricing tiers.
2. In-App Purchases
Many apps allow additional in-app purchases for some of their features, like super-likes and profile boosts, which a user may want to use more of, even with premium subscriptions. For example, a profile boost allows the profile to get higher views for a limited period, like one hour or 12 hours. Adding the feature to buy more boosts, will give the users the option to boost the profile for longer periods.
In-app purchases are a great way to monetize through users who do not want to commit to a subscription plan with recurring billing but want to buy a certain number of features instead. It allows the user to customize their own experience on the app, and pay as much or as little as they like. Most dating apps include these features, including Hinge, Bumble, Tinder, and OkCupid.
3. Advertisements on the site (Through Adsense)
Since most apps function with a freemium model, they include online advertisements through Google Adsense or some such provider on the free plans. The user is shown adverts in the app, and to get rid of the ads, they subscribe to an ad-free premium version. So, though the user does not pay on the free model, the app can still monetize, tapping into the vast user-base via digital advertisements, without hindering the user from using other features on the site. Tinder incorporates this model into its app.
4. Custom Advertisements
Some apps go beyond banner advertisements and offer in-app advertisements as a service to companies. For example, Grindr has an option to register for advertising on their app. They offer the options of setting up a banner advert, insights into the ad performance, geo-targeting, setting your budget, and using their design features for creating your advert graphic. This model is especially useful since their app is a great way to reach the LGBTQ community for products and services customized to them. They also offer Advertiser account-based relationships, where advertisers with budgets bigger than 20,000$ connect with Grindr representatives for a more customized and optimized solution for their advertising requirements.
The Grindr Xtra and Grindr Unlimited premium plans in the apps do away with the advertisements for the users. So, though the app runs on a freemium model, and the free users don’t pay anything to use the app, they still add up in the monetization via advertisements.
5. E-commerce Stores
Some apps also monetize via the e-commerce route, offering cool merchandise to their users. For example, Grindr has an e-commerce store called “Bloop,” where they sell merchandise customized to their target audience, namely, the LGBTQ community. The store is a viable option for those on the app, as this type of merchandise is not always accessible to LGBTQs. Grindr being the oldest app for the community, has a presence all around the world. So their store makes it easy to buy physical gifts for a date on occasions.
6. Affiliate Marketing
Some dating apps expand their monetization further, going beyond advertisement, to affiliate marketing with other apps and products. Some dating apps create timed offers in partnership with other products, to offer the users a chance to sign up for both the services, with other incentives like a premium subscription for a certain period.
Affiliate marketing can also be in the form of events, organized in partnership with other companies, like the Grindr Halloween parties happening in multiple cities in parallel. There are “rewards” to be won in the parties, where you get to meet other people, and have a chance to get a premium subscription free. Access is limited to users of the app.
A similar meet and greet can be organized by a dating app, where the user is allowed to meet other people, based on certain themes or regional festivals and occasions.
7. Social Media and Content Partnerships
Since almost all dating apps have a presence on social media, another method of monetization can be through social media partnerships, where the dating app social media account promotes a product or service from a non-competing company to their social media followers for a fee. Considering that dating apps spend huge sums of money on increasing their social media following, this can be a good source of revenue, with additional benefits.
Another way of monetization can be a content partnership, where the dating app creates content on their social media or content sites, and mentions the advertiser as a partner, charging them a fee for it. This would work well for sites that have good content as part of their marketing strategy.
8. Expedited Profile Approval and Verification
Some dating apps, like The League, allow users only after thoroughly vetting their profiles and credentials. The approval process takes time, and is not guaranteed. However, they offer an expedited approval process for a fee. Similarly, profile verification can be offered to users for a fee, if they choose to have their profiles stand out with a verified tag, and are promised higher visibility and better matches with verification.
9. Rewarded Video Ads
Rewarded video advertisements are different from usual advertisements in that they offer the user something at the end of the video if the user watches the video— for example, a discount, free membership, or some other feature. These types of advertisements are popular on other apps, and would be ideal for dating apps as well, where the advertisement can be for a product. This is a good fit for the target audience, for example, young people belonging to a certain city or age group, etc.
10. Games and Quizzes
Dating apps can also offer their users a choice of online games like video games, online chess, etc., which they might want to play with their partners to “chill out” or converse over a shared interest or hobby, in secure settings, with their privacy intact. This can be a separate monetized feature, with the option of buying the game for yourself as well as your partner. It can include chat and video calling as part of the game CometChat is the best solution for secure in-app chat and video calling which can be used within the dating app via APIs.
Similarly, dating apps can allow users to build their own quizzes for a fee, which they would like their partners to answer, upon which their own answers would be visible to them. This is a feature on some apps like OkCupid, though not in the same format. As a separate buy-able feature, it can be an additional feature for free users as well.
Building a dating app requires careful thinking about how it can be monetized and what would work best for your target audience. The features you add to a dating app will depend entirely on your methods of monetization and business model. With the rapid growth in online dating, especially after the pandemic, this market is slated to grow even further and is a great business opportunity for app developers.
About the Author
Arti Agarwal is an alum of IIT Roorkee & MIT. She has pursued advanced education in Data Science and Economics. She's a published author and writer and winner of the "Most Influential Content Marketing Professional" Award by the World Marketing Congress in 2017