Wooing cheaters

AshleyMadision.com makes adultery pay off

How do you decide you want to offer an online dating service for cheaters? It's all about market research, says Darren Morgenstern, founder of the Toronto-based Ashley Madison Agency. In 2001, Morgenstern knew online dating services were a profitable business to be in, and he wanted a part of it. But he didn't want to compete directly with Lavalife or Match.com. "In being good marketers, we had to go out there, identify, define and service a niche," he says. He started doing some reading and came across an article that said one-third of those who use online dating services are already in relationships. He knew he had found his niche.

To get started, he ran an ad in the Toronto Star that read, "Are you unfaithful to your spouse?" and after interviewing about 50 people, AshleyMadison.com, with the tag line "When monogamy becomes monotony," went live in January 2002. Since then, the site has grown and new features have been added, based on customer feedback. Potential adulterers can now send emails, instant message, connect anonymously over the phone and use a Google-powered search to narrow their options.

The site boasts 225,000 member signups, but that's not to say these are all paying customers as it's free to take out a guest membership, post a profile and browse for a potential bedmate. To use the other services, customers must purchase credits. This year, Morgenstern is projecting $3.5 million in revenue. Despite having a feminine-looking Web site, males outnumber females 10 to one, and the average age of a user is 36.

Morgenstern, 40, who studied business at Toronto's Humber College, says he's learned his marketing skills in the workplace. Ashley Madison uses mostly radio and television ads to promote its services, and newspapers help supplement those ads. The company also has a late-night infomercial, starring Morgenstern. The ads are simple and to the point. "We never mention sex," he says. Recently, Morgenstern has added a new component to his market studies, and he now sends researchers on dates with customers to get into their heads about why they use the site and what they would like improved.

Morgenstern is also branching out to other media to make Ashley Madison a brand, rather than just a service. A former user of the site has penned the Ashley Madison Diaries. The book is available on Amazon.com for $9.99 and is designed to appeal to a young, gossipy crowd, and not necessarily those who use the site. Morgenstern is also working with a production house in Los Angeles to develop a reality television series. The production house has just wrapped up shooting footage around the Ashley Madison offices to put together a pitch tape for HBO.

Rick Broadhead, an Internet industry veteran and co-author of 30 books about the Net, e-commerce and e-business, says Morgenstern's strategy is a good one. "Branching out to other media, whether it is TV or publishing, is definitely a great synergy."

Many people question Morgenstern about the morality of a site for cheaters, but he says there's nothing wrong with what he does. In the infomercial, which asks, "As a society, are we meant to be monogamous?" Morgenstern makes his appeal to those who have already thought about cheating, rather than trying to convince people they should cheat. He says it's hard enough convincing someone to change their toothpaste brand, never mind straying from their spouse. And to him, enough would-be cheaters exist to make his business work.

"I wouldn't have started it if I felt we were creating a market, and not just servicing one. I'd never do it... because it wouldn't be viable," he says with a laugh, "and because it would just be swimming in a really dirty river to make my money. And I just have no interest in that."

CLAIRE GAGNE is a freelance writer based in Toronto.

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