Ashley Madison’s Noel Biderman on the Profitability of Infidelity

With 11 million members and counting (a new member every 6.5 seconds), the Ashley Madison website is hard to discredit—at least, in business terms. A dating service that specializes in extramarital affairs may seem morally dubious. But CEO Noel Biderman contends that those who get caught up in judging his members—and his methods—are missing the point.

After all, Biderman’s site will shortly be gearing up for their annual post-holiday traffic spike, when family members forced into close quarters for year-end celebrations are presumably compelled to seek out something new in the romance department. That’s where Noel Biderman comes in.

So where’s the growth coming from on
We’ve seen in the last 12 months some acceleration because we’ve entered a half-dozen new marketplaces. We just got back from Italy, for example. Unlike a lot of other websites that are globally available, we actually preclude people from logging in or registering as Ashley Madison members unless we’ve launched in their country — with that language, with that community, with the ability to transact in that currency.

Is that only because you want to have the local currency and language set up?
No. That’s a big part of it, but it’s also the nature of affairs and the way they play out — why expose myself to the risk of the wrong people from Russia or whatever logging into the servers, with no community, only to have them exploit my real community. So if you travel to South Africa, for example, you will not be able to get on to Ashley Madison.

Even if you’re already a member of the site in your home country?

You’ve also said that you estimate the site gains a new member every seven seconds.
I think it’s six and a half seconds.

Do you get a lot of traffic around the holidays?
Actually, what we tend to see is that the days following family holidays are some of the busiest of the year on Ashley Madison. So the Monday following Thanksgiving, or the day after New Year’s, or the days after Valentine’s Day, or even after Father’s Day and Mother’s Day.

What’s your male-to-female ratio?
You have to look at age.

It changes depending on age?
Right. For example, in what I call Viagra generation of 50 years old and older, the ratio is probably four men to every woman. But if you start looking at 30 and under, it’s one to one. There are a couple factors in play there. One, I think this younger generation is acting differently already. We’ve been doing this for ten years now and having a widely diverse age group. But we do allow single people into Ashley Madison, and 22-23 percent of the women are single, and most of the single women tend to be in their twenties.

In terms of how the business has worked over the years, what kind of big changes have you made, or tried to make, or foresee making?
We got out of several other brands and verticals we used to own, so I could launch what I believed were relevant market brands that hadn’t been addressed or weren’t being addressed properly. In terms of Ashley Madison, what I mean by that is … we can sit here and say that the world is all about dating so that you can get married. That‘s how eHarmony and and maybe even Jdate want you to believe the world is.

They present marriage as the successful end event to the online dating experience.
Yeah, marriage equals success, right — so success isn’t a six-week thing, or a vacation, or a hot date, sex on the first night, I don’t know. I think the rest of the world — probably a bigger market segment — sees it differently. So my view was that the road less traveled is actually traveled a heck of a lot more than people realize, and I address that whether it’s people in open relationships, people having affairs, older women who want to date younger men, or wealthy guys, overweight people, whatever, any marketplace that I thought could be defined, addressed, and marketed to that was probably being ignored by traditional companies.

You get a lot of press for attempting to advertise in places that won’t take your advertising. Yet the places which reject your advertising, which overtly caters to those looking to have affairs, will still run ads that are very sexual, salacious, objectifying, what have you. All of which seems hypocritical. Have you had these kinds of conversations with any of the people who have rejected your ads?
I have those talks all the time. The NFL is a great example. The NFL’s job is to produce a world-class entertainment product revered everywhere. And that’s what they do. People are huge fans of it. Their job is not, despite what they seem to sometimes believe, to guide our moral principles. If you just look at their poster boys from the last few seasons, whether it’s Brett Favre or Ben Roethlisberger. One was sending around pictures of his junk when he’s a married man, the other was accused of sexual assault. The NFL’s advertising partners include alcohol, which leads to disease and addiction; and if you’ve ever been to a professional football game, the amount of alcohol consumed there and the behavior pattern of the people watching isn’t exactly something fit for kids. Another one of their commercial partners is Viagra — the only function of which is to allow people to have sex. So it can’t be that they have problems with sex, or the notion that somehow their audience can’t tolerate seeing an Ashley Madison ad. It’s not 1940. They’re mistaken, and I actually think it’s an issue for all of us, because, you know, as an entrepreneur, part of my responsibility to society is to constantly help it evolve, the way an artist does, the way lots of people do. We’re not just in it to make money. What if, 25 years ago with that same organization, I wanted to propose an interracial dating service, and they said we don’t like that idea? Well, tough shit, that’s not good for society.

In the case of your ads getting rejected from NFL telecasts, is it your perception that was coming more from the NFL or Fox, or from both? Or does it matter?
Clearly the salespeople within Fox are the people that want to do the deal, and they say it’s no problem, and then you work on building creative — and again, I’m not being rejected because I’m producing an ad that has intolerable images, right?

Apparently not.
I could just have an ad that shows nothing, that just says “Shhhh, try Ashley Madison,” and they’ll still reject it. It’s the nature of my business they don’t like, and that’s pretty rare.

It’s hard to think of a precedent.
Right. So I can’t tell you where the rejection comes from. It feels to me that it’s at a very high level, that people are saying “No no no no no I don’t want this,” for whatever reason. I think that’s dangerous, if it’s one individual who has that much power. They do broadcast to millions of people, and if they start restricting other products and services from seeing daylight, that feels more like Saudi Arabia than America.

On the other side of the coin, these rejections themselves are turned into great press for the business … almost reliably so at this point.
I call it the plan A/plan B approach. I would love to advertise on Monday Night Football for the rest of the decade, wherever it ends up. If I try and fail, then I scream at the top of my lungs. But I assure you that coverage is very fleeting in comparison to the longevity of what a car company gets the opportunity to do, and so I believe Ashley Madison should and can be bigger than and eHarmony — maybe even both of them combined. I’m just not afforded the same luxuries. The only difference between us is the majority of their users are single, and the majority of mine are not.

You think the obstacle to growing your membership is purely based on your access to a new audience via these advertising channels?
Absolutely. I didn’t create infidelity, and it happens. Unfortunately it happens in environments where there is collateral damage. I’ll give you an example: An affair that happens in the workplace — and listen, more affairs happen in the workplace than on Ashley Madison. Someone gets an unfair promotion as a result. There is a victim there that wants nothing to do with the affair and gets roped into this nonsense. Someone loses their job, and then investors suffer from that whole kind of thing. Or an affair happens on a singles dating site – imagine you’re a single who meets someone on a singles site, gets involved with someone, sleeps with them, only to find out they’re taken. They didn’t realize that’s what they were getting into. They were lied to, to the nth degree. That’s a little different than saying I have a nice job or whatever. That’s saying, I’m available, and let’s see where this can go, only to find out you were never really available. So not only is society a little better off from the presence of Ashley Madison, in the sense that I can clean up this behavior pattern, but my job in advertising is not to convince people. I could never do that. I can’t convince people to be unfaithful. Even one to one, let alone with a TV commercial – what I can convince them is, if they decide to have an affair, not to do it in the workplace, not to do it on a singles site, not to do it on Facebook. To do it on Ashley Madison.

There have been high-profile cases of people being exposed on dating sites — celebrities or notable people behaving unwisely because they think they’re anonymous. Have you ever had a problem with exposure?
Ten years, no problems. Unlike a traditional dating site, I’m so focused on what I call “digital lipstick.” I realized early on that my role in this was twofold – create the connection, and help you not get caught. That’s what the perfect affair is. And so I did my research. How are people getting caught in this era? They’re not getting caught because they’ve got lipstick on their collar — they’re getting caught because they’ve left digital lipstick behind. They’ve left a text message behind, a voicemail behind … so the entire way I built my platform, from the moment you sign up anonymously, to the way you put your photos under lock and key, to the ability to not just delete your profile when you’re finished, but to actually remove historic messaging that you sent to somebody else’s inbox, to the way our apps function, the billing records that we create … the entire service is all catered to and designed around discretion.

Unlike some sites, Ashley Madison users aren’t charged a subscription, but rather pay for contacting other members. Why?
It’s pay as you play. If you want to join, it’s free. If you want to communicate with another member, that’s when you need credits. But once you open a line of communication with someone, it’s free forever. You can talk for ten years, and I’m never going to charge you another credit.

And why did you design it that way?
It’s about not just the connection, but keeping it permanently on Ashley Madison. There’s no reason, if you have connections open and you’re not being charged, to take it to a personal device, to take it to your personal email. And that to me was a great way to mitigate potential exposure.

So of those 11 million members, how many are paying?
Fair question. Almost 95% of people who purchase credits end up being men. Despite my attempt from day one to make this a female-focused brand and build something — from the color scheme of the TV commercials to the nature of the customers attracted … I still have more men than women. It plays out the same in every demographic, in every country, city, province, or state that I’ve ever launched in. It plays out the same way as it does in human nature. Women like to be pursued.

So women wouldn’t have to pay at all, necessarily.
Exactly. So to answer your question, 6 to 7 million people have purchased credits.

You also “guarantee” your affairs. Do you get a lot of requests for refunds?

Eleven? Total?
Eleven in the history of Ashley Madison.

How long have you been offering the guarantee?
Almost three years.

You also offer same-sex connections. Are you seeing material numbers there?
We have 350, 000 women who are married seeking relationships with other women, and about 250, 000 men seeking relationships with other men. I think it is significant that more than a half million people who see themselves as heterosexual, or to some degree are in heterosexual relationships, find that their partner can’t even fulfill their sexual desires. They’re of the wrong gender. And so how do we address those people? Does it mean they shouldn’t be married and raising families? It’s complicated, and that’s part of the reason why I do this. It’s just not so clear-cut, not so cut and dried. I suppose in a perfect world it would be really great for those people to communicate with their partners and try and find a way forward, but it’s not always doable.

Being married yourself, you’re often asked what your reaction would be to finding out your wife was having an affair, and you’ve said you would be devastated. So in the context of what you’ve said here about not getting caught, and how your business is focused on that, would it be fair to say that your philosophy of affairs is “what you don’t know won’t hurt you”?
I think the argument has a bit more complexity. You also have to believe in free will, you also have to believe that inanimate objects don’t cause people to do things, that people choose to do things because that’s their prerogative, and thankfully we live in a society where they’re allowed to do those kinds of things. I’m not there to judge how people get through the day. Some people need a drink at night, some of them might need to view pornography, and many need to take a lover. I suppose we only see it as a problem because we’ve created a context. But truthfully, we see in 2011, we get divorced more often than we stay together. Infidelity rates, if you follow the economics, speak to people like me or the strip clubs or massage parlors, where attendance has tripled that of Broadway and the opera combined. We can’t fake those economics at Ashley Madison — we couldn’t be in business and keep the lights on. When it comes to marriage, we have a broken paradigm. We tell people that you should be monogamous, and we have to be like this, but we mostly fail at it, and we find these couples who have the courage to talk about it, changing their lives, getting into open marriages — and their divorce rate plummets. Though it’s a shame to call merely not getting a divorce a success.

NOEL BIDERMAN LIKES: Harbour Sixty Steakhouse

Photo by Hugo Arturi. Styling by Raul Geurrero. Grooming by Joanna Pensinger for Exclusive Artists/Dior Homme. Location: Raines Law Room, New York City.