The freemium model hinges on the concept where users can sign up and use the basic functionalities of the app for free, while the app generates revenue either via advertising or unlocking enhanced features for a fee. Without a barrier to entry, freemium dating apps often wait to build scale, loyalty, and active users until they introduce paid features. They typically use a combination of both options.
In-app advertising is a way for the app to generate shared revenue with advertisers from clicks, views or transactions. Certain apps and the “swipe left or right” mechanism seems particularly suited for native advertising, ads that match the look and feel of the media format that they appear in.
In paign for Budweiser, where users viewed a Budweiser video within a few swipes. Users could “swipe left” to pass and “swipe right” to like the advertisements, data which was tracked by Tinder for Budweiser. However, a brand’s approach to this audience must be strategic. For example, when movie Ex Machina was in its promotion phase, the film’s main character “Ava” was introduced to Tinder users as a romantic prospect (in the movie, she’s a robot). Many users who didn’t catch on to her questions like “What makes you human?’ often realized what was happening when Ava’s admirers were directed to her Instagram profile, which promoted the movie. The campaign went viral.
Though basic membership is free, users can pay for extra, enhanced features. As of , Tinder was the highest-grossing app on the app store among US consumers. In the same month, Tinder rolled out their Tinder Gold feature, which, for $4.99 a month, allows users to view others who have “liked” them already before they have to like them back. In its most basic functionality, Tinder only reveals users’ identities once they had both independently matched with each other. The Tinder Gold feature has been added on top of two existing features: the “Tinder Plus” upgrade that ranges from $9.99 to $/month, which allows users to like an unlimited number of people within 12 hours (basic Tinder is capped at 100 likes). Another perk of Tinder Plus its “Passport,” which allows users to adjust their geographical location before even arriving in a new city. It took Tinder about three years since its inception to start monetizing, as it was working to build its user base and loyalty before turning on the monetization engine. About 5% of Tinder users pay for these services.
In second place is female-friendly Bumble, which also only started to monetize in . Over 10% of Bumble users put forward $9.99/month for perks such as extra time to decide whether a prospect deserves a message from them. The perks include Rematch, Beeline, and Busybee. BeeLine will automatically match users with people who have already liked their profiles; Rematch keeps expired matches in a user’s queue (Bumble matches expire in 24 hours if no conversation is started), so users can try once more to get their attention; BusyBee gives daters unlimited extensions on the 24-hour time limit for contacting a new match. Bumble uses this in combination with hyperlocal, targeted advertising.
In , Coffee Meets Bagel, which raised a $7 million Series B a year later, introduced a $35/month premium membership. This membership includes the following features: