(Noel Biderman)
Here’s how Noel Biderman, the head of the AshleyMadison.com dating site for extra-marital affairs, parses the world: He compares the number of people looking to get married to an orange, whereas the ranks of those already in permanent, and potentially violable, relationships is more the size of a pumpkin. The target market, in other words, encompasses those who are already spoken for. His goal, therefore, is to make Ashley Madison—which is owned and operated by his business, Avid Life Media Inc., ranked 185th on the PROFIT 500—into the world’s largest dating site.
The company’s soaring top-line growth in the past few years—its 2013 revenues were nearly $77 million—seems to confirm his calculus. And it can be attributed to not just an ambitious international expansion strategy, but also a deliberately titillating approach to establishing brand awareness in new markets.
“We make a big deal about the controversial nature of our business and market around it,” explains Biderman, pointing out that the thousands of user profiles on Avid’s various international sites represent, in the aggregate, a vast sociological study of human infidelity, an area that has traditionally attracted little in the way of sociological scrutiny. “We’ve leveraged that to the moon.”
Download Now!When the seven-year-old company began to look at expanding beyond North America, Biderman says, it quickly realized that cultural differences have a massive impact on the shape of the online dating industry. In India, for example, parents are actively involved in selecting mates, while in China, there are economic considerations. “In the online dating space, there aren’t any global products.”
Still, he says, the company was convinced there was a market for its service because “the behaviour pattern”—cheating on one’s spouse—“is pretty universal.”
In 2009, after Ashley Madison topped the million-member plateau, Biderman persuaded his board to give the green light to an expansion into another English-speaking market, to test the global waters. Australia was the natural candidate, and the site there took off quickly.
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Reckoning he was ready to try a non-English speaking region, Biderman partnered with an investor prepared to bankroll a German site. But the results were disappointing. After 18 months, he says, “we weren’t hitting our numbers.” Indeed, the Avid board felt Biderman shouldn’t focus on growing the company outside North America. But Biderman persisted, and persuaded his backers to support a British site, which launched in 2010 and quickly took off.
Since then, Avid has pressed into countries across Latin America, and central and southern Europe. Switzerland and Spain are especially strong markets, with Spain generating four times as much revenue as the U.K. Indeed, Biderman’s hypothesis is that the site’s commercial appeal seems to be counter-cyclical: the worse a country’s economy, the more its residents seem to want to fool around.
The company today runs eight separate sites, each with their own branding and specializing in distinct market segments, such as older women looking to date younger men, swappers and partiers.
From Ashley Madison’s early days to its current international incarnation, Biderman has understood that the service wouldn’t just sell itself, which is why he pursued what he calls a “Hollywood red-carpet” approach to PR. Borrowing heavily from the movie industry’s publicity machine, Biderman sets out to build buzz as he enters a new market. “We say we’re coming here and invite people to come and talk to us.” News editors, in his experience, rarely pass up an opportunity to publish an interview with someone who runs a business devoted to cheating and sex.
Prevailing cultural mores also determine the degree of media interest: Avid’s publicity campaigns, he says, work “incredibly well” in Catholic countries, as well as in Japan. They have been less successful on the extremes, in countries with strict gender roles, and also in places like France, where infidelity is a long-recognized feature of the political classes and a staple of media coverage. Still, he adds, “There’s never been a launch when no one’s shown up” to the press conference.
Asked how Avid’s brand awareness strategy could apply to other export-oriented businesses, Biderman allows that the vast majority of companies don’t offer a service that’s as intriguing as his. “Ninety-nine percent of businesses don’t have an interesting public relations story.”
But, he adds, the learning isn’t about the specific tactic—a media relations blitz packed with juicy statistics about infidelity—but rather the broader importance of building brand awareness through whichever channels make the most sense for a given firm in a given industry. And, he adds, even a company with obvious curiosity appeal, like Avid’s, doesn’t become a household name without a lot of hard work on the back end. “This wasn’t a one night sensation.”
