From virtual red roses to virtual boob jobs? - Flirtomatic shows how to make money in social networking

Time for a major update on one of the most interesting players in the social networking space, both on mobile and the internet.

Flirtomatic of the UK is one of our absolute most favourite cases of "Communities Dominate" that has figured out a solid revenue model ("we abandoned our monthly fee as unnecessary" said CEO Mark Curtis over a year ago) and we've discussed its innovations here often from millions of virtual red roses, to the "first face" adaptation of user-generated and user-priced (auctioned) advertising. Flirtomatic is one of the case studies of my newest book, Mobile as 7th of the Mass Media. Flirtomatic has already started its international expansion with their launch in Germany, and under 3 years from launch, they have over a million registered users - and more than half of those on mobile.

Flirtomatic CEO (and author of the excellent book Distraction) Mark Curtis is a very dear friend to both Alan and me. It was a great pleasure to be chairing when Mark presented at the IIR Mobile Content Conference in London last week. Mark is always both an entertaining and insightful presenter. He is not afraid to give real numbers and to burst myths and expose reality into an industry often overloaded with hype and unreasonable expectations. He is also humble to admit errors and again, honest to discuss them. I could write a chapter into a book about Flirtomatic and what Mark has told us about it over the years. But lets get to the meat of what he talked about at the event.

THEY BUY EXTRA FUN FROM US

So yes, remember this is not a "dating" site or service, it is a fun service, simple, easy flirting. Not pornographic, just "cheeky" adult fun, with plenty of sexual suggestion, but nothing goes onto Flirtomatic, that the BBC would not be willing to show on TV. So lets start a bit on the membership of Flirtomatic. A million registered users, over half on mobile, the rest on the internet. Men/women balance is strongly men (as could be expected) but just over one in three - 35% - are women.

They get 155,000 unique visitors per month. And this gets astonishing. While mobile users of Flirtomatic have been more active than internet users right from the start, today active mobile users will visit the site - seven - repeat - seven - times per day. Wow. Mark said that when the service is tailored to suit the mobile user, like the mobile variant of Flirtomatic is - and the users find it useful, there is no doubt the mobile internet will be popular. Mark says that their members use Flirtomatic "voraciously."  I like that word. Voraciously. Yes, this is a good industry to be in...

MAKING MONEY

Flirtomatic has made a science out of creating virtual value that can be paid for with their virtual currency, "flirt points." They already have all forms of virtual gifts (eg virtual red rose) and customization etc that can be bought and paid for by flirt points. So they keep innovating. As the members can rate each other for how many stars you get for being a good or bad flirt - now Flirtomatic will sell you some ratings related services. If you have a bad rating and want to get rid of it, you can pay to remove your worst rating. They call this "Delete Your Freak". Men seem to like this feature. And another premium service is that you can find out who gave you the rating(s). Women seem to like this way of dealing with their bad reviews..  Interesting. But the point is, that Flirtomatic is making money at every stage. They let you play in the service for free, but they make sure there are plenty of "fun" you can have if you are willing to spend some "flirt points"

So this year 2008 was a leap year. In Britain there is a tradition that on leap year day (February 29) it is customary that women may propose to men. Flirtomatic approached the end of February with no real Leap Year gift or gimmick, and rather at the last moment decided to offer wedding bands, that women could send as gifts to their flirting partners - as to "virtually propose". Consider the art work - a very simple graphic of two yellow bands of rings, two wedding rings. How much art work did that require? But they charged it at approx 1 UK Pound (1.40 Euros, 1.75 USD) and they sold 14,000 rings / virtual propositions on Feb 29. That was total bonus income, to utilize the special day. They are in the fun business. As Mark says of the Flirtomatic membership, "they buy extra fun from us." Brilliant.

ADVERTISING

Flirtomatic also offers advertising, from basic banners to sponsored content (ie L'Oreal Big Wet Kiss, a virtual kiss sponsored by the make-up brand). So for example this year Flirtomatic had a campaign run with the Strongbow alcohol brand - by which you could give your friend a pint of Strongbow, via a virtual coupon in Flirtomatic, that could be then redeemed at a real pub for a real drink of the brand. Obviously they would love it..  But the beauty is, that mobile allows us to do far more in the advertising and branding space, than previously on older mass media. Mark told us that the balance of Flirtomatic revenues has shifted ever more to the virtual content and personalization. That while advertising revenue was there from the start, and still a year ago was roughly half of all of their revenues, today advertising is only 25% of Flirtomatic revenue. They have so many more revenue streams from the more innovative methods.

VIRTUAL BOOB JOBS

So remember, this is mostly for young adults in the UK, a non-pornographic, but fun flirting environment. They don't allow any nudity, but bikini etc scantily clad images are fine. So, as summer 2008 approached, Flirtomatic designers were thinking of what to do to bring the membership into a summer frame of mind. They had the idea of a "summer make-over". So they offered their membership a series of different summer beach preparation activities (all at premium costs of course) such as tummy-tucks, liposuction, and yes - virtual boob jobs. I have the image that Mark kindly provided, I have to come back and post it here for reference, it is simply funny and very "innocent" with the girl in her bikini, and suddenly her breasts expand, to the point of her being slightly embarrassed. Very funny and - very provocative, in a cartoon way. The virtual boob job cost 1 UKP in flirt points, and they sold ten thousand of them for the summer. This industry is a license to print money if you are clever and creative. Virtual boob jobs indeed. I have a dirty mind, and I could not have thought of that. Brilliant move, Flirtomatic !

LOCATION SEARCH

Mark then discussed their primitive steps into location-based dating/flirting. I think I may have been a subconscious "barrier" to Mark and his team rushing into "location-based" sides of their business, as we've often met up with Mark and he knows well my strong views of the futility of location-based services. Nonetheless, on their sign-up, several pages down into the personal information, Flirtomatic offers users the chance to fill in their UK post code. So its a totally volunteer thing, only modestly accurate in terms of the home of a given member, but when they looked into it, Flirtomatic managers noticed that about six in ten members had in fact filled in their location. So they decided to offer their members "location search" to find other flirting partners based on the postal code. This search was a premium service, at 50 pence (70 Euro cents, 90 US cents) per search. And amazement - this was an immediate hit. They raised their total revenues by 20% when this feature was enabled earlier this year, and that was not a short-term effect, the level never returned to the earlier levels. Mark was very open to the audience, that he was quite upset that they didn't try this earlier. They had discovered a 20% boost to their revenues, with just one new parameter added to the ability to search for flirting partners. Wow, this is a magical industry.

I think there are really powerful lessons out of Flirtomatic to all who read our blog. On the internet, the assumption is, that everything "has to be free". That is how we see it on Google and Facebook and YouTube etc. But on a mobile (and on any internet-mobile converged) service, there is a very robust ability to monetize the customer's interest. Without damage to your brand, as long as it is done well, and the customer is happy. Remember Flirtomatic delivers more fun to its users. They grew from 200,000 members last year to over one million now. So the customers are not unhappy about these charges. And as long as the service makes clear that these are premium items, that you don't have to buy, but you can have more fun with them - then some customers will consume them (ten thousand boob jobs, gosh, flirtomatic has to be one of the world's largest virtual plastic surgeons ha-ha)

ASK YOUR MEMBERSHIP

And finally, a fascinating tidbit. Mark said that they ran their first customer survey of their membership. They offered this with no incentives, simply as a dialogue with members. Mostly a multiple-choice quick response survey, but also with two open-ended questions where people could fill in responses in text. Bear in mind regular national consumer surveys for things such as national elections, tend to run about 1,000 responses. Flirtomatic received 6,000 responses in two hours. They had so many filled in text replies in the open-ended parts, that they were unable to process them all, and their "market survey team" was totally overwhelmed with the level and depth of the responses. Wow. So if the Flirtomatic management had any internal squabbles about what their customers might want or not - now they have a treasure chest of real customer opinions and comments. Great job !  And goes totally to our philosophies, that Alan and I wrote in our book Communities Dominate Brands - that you need to engage with your communities, and ask them..  Very good.

There was much more, but this serves as a quick update of what is happening with the world's favourite flirting service ha-ha..  My best of congratulations to the Flirtomatic team and best of luck for the next year. I can't wait to see what you guys come up for Valentine's Day 2009 etc.

PS - Flirtomatic is one of the 16 case studies in the new book. But a nice coincidence is that the one case study in the free 30 page excerpt from the book, happens to be Flirtomatic. So if you'd like to receive the free 30 page excerpt of the book Mobile as 7th of the Mass Media - with 2 full chapters and the foreword and Flirtomatic case study - send me an email to tomi (at) tomiahonen (dot) com, and i'll send you the pdf document by return email.

Comments

[Jan Stringer West]

I love to see companies, that are doing well, still reach out to their customers for advice on how to do better. Good job.