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How Avid Life Media Inc.—home of controversial dating site—builds brand awareness around the world, one affair at a time

Here’s how Noel Biderman, the founder of the 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.”

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.

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.

Source: Profit Guide

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