This document is authorized for use only by KYLE MATTICE in MGT 509 Spring 2015-1 taught by Keith Yurgosky, University of Scranton from March 2015 to August 2015.

This document is authorized for use only by KYLE MATTICE in MGT 509 Spring 2015-1 taught by Keith Yurgosky, University of Scranton from March 2015 to August 2015. For the exclusive use of K. MATTICE, 2015. 709-424 eHarmony The results of this integrated system were astounding. eHarmony commissioned a study, conducted by Harris Interactive between August 2004 and August 2005. The study found that on average, 90 eHarmony members married every day in the United States as a result of being matched on eHarmony.33 A follow-up study in 2007 found that on average, 236 eHarmony members marry every day in the United States as a result of being matched on eHarmony, representing a stunning 2% of marriages in America.34 Marketing To support growth in its membership base, eHarmony invested substantial resources into marketing. The company aired its first radio commercials in 2002, with TV spots following in June 2003. Soon thereafter eHarmony stumbled on a very successful campaign, which paid for itself in increased subscriptions within a week! It featured testimonials from happy couples who had found love through eHarmony, in short upbeat segments. A senior marketing team member believed that the commercials clearly communicated that “eHarmony is about serious relationships and helping people find lasting love. Nothing could convey this more authentically than the couples. A lot of our early growth came from bringing people into the category who previously wouldn’t have considered online dating, because it seemed too sleazy, too casual.” Although there were at least 100 different executions of the campaign, the couple was always placed against a white background and accompanied by Natalie Cole’s “This Will Be” song. The spots often mentioned the Personality Profile, the 29 dimensions of compatibility, and automatic matching. Warren, a “wise, experienced doctor,” was also featured prominently in the ads, although it was never explained that he was a psychologist. In 2007, the company was considering adjusting its four year old signature campaign to appeal to those interested who have so far shied away from eHarmony’s service. The new campaign featured spots focused on one couple, shot in their real environment in a documentary style, highlighting that couples love story. Any changes to eHarmony’s successful marketing formula had to be introduced with care; the company had earlier experimented with telling the story of lonely individuals who were afraid that they would never meet anyone, followed by a happy conclusion. These commercials backfired, because “the initial ten seconds spent recounting the ‘problem’ just flared up anxiety in people and dampened our response rates… so we went back to focusing on the end benefit,” explained a team member. The successful advertising formula made eHarmony one of the few online companies that made offline marketing work and pay for itself. But with marketing expenses reaching as much as $80 million per year, firm profitability depended on efficient customer acquisition. eHarmony was extremely judicious in its use of advertising dollars, avoiding any pure brand-building activities and focusing on direct-response marketing. The marketing team worked only with advertising and media buying agencies, “who really understood direct-response advertising… This means they are incredibly diligent about buying media at lower rates – both by locking in good ‘upfront’ deals and searching for last-minute remnant inventory.” As a result, eHarmony advertised only on national cable networks and avoided broadcast television, where prices where higher because local stations allowed for greater targetability than national cable. Match, eHarmony’s close competitor, used broadcast TV and aired its commercials during primetime shows, paying $20 to $30 per thousand impressions—at least four times more than cable TV prices. With three-quarters of the marketing budget spent on TV and radio, eHarmony spent the remainder on online marketing, including paid Internet search and banner ads. The latter had high visibility and got decent click-through rates, but the conversion rates were low, which made banner search more expensive than paid search in terms of customer acquisition.