The crisis in the technology industry continues and this time it affects the business of love. Match Group, the company that owns dating apps such as Tinder, Meetic, OK Cupid and Hinge, announced last February that it was laying off 200 workers from its entire global workforce, i.e. 8% of his entire staff. work
Among the reasons are the poor financial results and the poor performance of Tinder, the most used digital match. That’s why Match Group has developed a strategy that has two goals: to attract new users, especially among the younger generations, and to contain the rise of Bumble.
the wolf’s ears. Bernard Kim, CEO of Match Group, communicated in a telematics meeting, held a few weeks ago, that 2022 was a difficult year, with results below expectations. According to Kim, despite the company’s existing financial discipline, Match Group must take “decisive steps” towards restructuring in order to ensure long-term economic growth.
Less income. Likewise, in a letter addressed to the company’s shareholders, signed by Bernard Kim and Gary Swilder, CEO and CFO of Match Group respectively, the company reported that last year it earned revenues of $3.2 billion, a 7 % more than the previous year but “well below” what was initially planned by the company.
Poor Tinder performance. In this sense, the text adds that the causes of this reduction were due to macroeconomic impacts on the currency market, a decrease in consumption and a weakening “more than expected in the productive execution of Tinder” , which was intensifying as the year progressed. Therefore, the company communicated a new plan to improve the performance of the application.
More marketing. Match Group said Tinder will launch its first “global marketing campaign” this year. The company noted that the world’s most downloaded dating app grew quickly through word of mouth, so it never needed to set up a marketing strategy for Tinder.
For young people. Now, however, the situation has changed and the most popular digital matchmaker fails to convince the younger generations. Herein lies the challenge, persuading Generation Z, as Gary Swidler pointed out in an article published by the Financial Times last August.
Fewer people join. Furthermore, in this same Financial Times article, Swidler indicated that the number of new registered users had not returned to pre-pandemic levels. “New users are a challenge,” he added, noting that the company had to offer something new to convince them to use the app. That’s one of the reasons for this slowdown in Match Group dating apps: those who wanted to use them already have, and those who weren’t interested before are now not.
From the Guadiana effect to the economic crisis. Along these lines, Borja Adsuara, an expert in law, strategy and digital communication at the University of Villanueva, recently pointed out to Cadena Ser two other reasons for Match Group’s decline. On the one hand, “the Guadiana effect” in a context of generalization of the application in question, i.e. people who use this ‘app’ for a while and, when they reach their goal, stop using – it until they go back to look for a new one. to flirt On the other hand, the economic crisis that reduces the possibilities of users to pay for the improved version of the applications.
A tough opponent. And while Match Group expects to have losses by 2023 estimated at $6 billion, Bumble, the dating app founded by Whitney Wolfe Herd (co-founder of Tinder), seems to be on the right track. The firm’s latest financial report indicated that revenue had increased by 16.7% and that the number of users using the paid version increased by 14.4%. There is one goal of Tinder’s strategy for this year: to contain the growth of Bumble.
Love is not easy. In short, Match Group has found itself in an unexpected context in which, moreover, Bumble is taking a piece of the pie. Freddy Mercury said in ‘Somebody to Love’ that he wouldn’t give up. We’ll see if Tinder manages to avoid defeat.
Image: Good Faces Agency / Unsplash
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