A match made in heaven
In September 2020, ProSiebenSat.1 company Parship Group acquired US-based The Meet Group to form a strong company and leader in the dating market. The new ParshipMeet Group encompasses the full spectrum of services on the market: In addition to online matchmaking brands Parship, ElitePartner and eharmony, the portfolio now also includes some well-known social dating apps that are especially popular in the US, such as MeetMe and Tagged. In turn, the Lovoo dating service has a strong base especially in Europe. The ProSiebenSat.1 Group’s decision to acquire The Meet Group was driven chiefly by its USP – its expertise in live video streaming. This makes an exciting addition not only to the dating business but also to the Group’s entertainment segment. In short, the Parship Group and The Meet Group are a good synergistic fit, which in turn serves to further accelerate diversification at ProSiebenSat.1 and creates additional value for the entire Group. That is because online dating and video chats are currently very popular – and not just because of the COVID-19 pandemic. What’s more, the market is experiencing very dynamic growth. In other words, it’s a match made in heaven.
2020 was a very special and eventful year for us. Thanks to the combination with The Meet Group, we are establishing a leading global player in the dating market. In this way, we are expanding the breadth and international scope of our portfolio. And make it even more successful. We have also identified synergies in various areas, which we aim to harness profitably. Unsurprisingly, using the TV reach of the Group’s entertainment platforms to further raise brand awareness in the German-speaking markets is, of course, top of the list. Over the years, this has already proven very successful with Parship and ElitePartner. With that in mind, our next step is to launch TV advertising for Lovoo with a view to appealing to an even broader target group. As of January, we have likewise been testing cross-selling potential – for instance, in the shape of Parship offers for Lovoo users and vice versa. In addition, we have plans to push dating services even further into entertainment territory and establish links with TV programming. On that front, we are already in talks with our entertainment colleagues at ProSiebenSat.1 and things look extremely promising.
There’s another reason the past year was so exceptional for us – we were able to make a valuable contribution to people’s lives during the pandemic. With the necessity of social distancing, people turned to online video to feel less lonely. The COVID-19 pandemic has caused online dating, which was already a major trend, to snowball even further. I’m very excited to seeing how our new group and the market are going to develop.
Starting in 2012, every time ProSiebenSat.1 has given us a boost, it has translated into growth: The creation of ParshipMeet Group is a prime example of ProSiebenSat.1 Group’s “buy and build” strategy. As a result, Parship Group has in recent years evolved into a strong international player in the dating market. Advertising synergies with the entertainment segment, thanks to the initial media-for-equity investment in Parship, have generated unequivocal organic growth. By the same token, acquiring ElitePartner in 2015 and subsequently eharmony in 2018 allowed us to enlarge both our portfolio and our geographic footprint. By acquiring The Meet Group, we are now significantly expanding our positioning, tapping into a younger target group and above all honing our market-leading live video streaming expertise.
Combining two complementary business models, target groups and geographic markets opens up enormous potential for us: The new ParshipMeet Group is characterized by a highly diversified revenue model – spanning pure subscription models through advertising to fast-growing in-app purchasing. This is how we set ourselves apart from the competition. Plus, we anticipate significant synergies as these two businesses become more closely intertwined, which will further boost our profitability and growth. Based on this position in the dating market, we aim to go public in 2022, with ProSiebenSat.1 remaining the majority shareholder, thus allowing us to continue growing together.
The combination of Parship Group and The Meet Group lets us provide our customers with an even more comprehensive partner search service: An American user, for example, might start out looking for casual encounters on apps such as MeetMe and Tagged before seeking more serious dating prospects on Skout and finally finding a partner for life on eharmony. Singles in Germany can take the same path to love with Lovoo and Parship. Harnessing the extensive expertise at both businesses, we intend to join forces in further optimizing our platforms by not only making the most of Parship Group’s experience with integrations but also leveraging The Meet Group’s video know-how for the Parship Group’s apps.
This is the basis we are building on and we look forward to the exciting prospects for everyone at the ParshipMeet Group. We have ambitious plans for how we can mutually benefit from commercial, operational and technical cross-pollination. Eharmony’s successful integration is testimony to how rewarding such an intensive dialog can be. After acquiring the company in 2018, we moved the US service onto a joint platform with Parship and ElitePartner, which is designed for multiple brands and markets. The result? An enhanced matchmaking service coupled with improved user experience and consequently commercial performance. Today, eharmony benefits greatly from these cost savings and the enhanced attractiveness of its offerings.
As a company that has always been an early adopter of new technologies, The Meet Group’s core competency is live video streaming. Even before competitors got in on the act, we dedicated ourselves to the forward-looking topic of live video streaming, which makes us true pioneers in the field of social networks as well as mobile apps. Today, The Meet Group is a leading provider of live interactive video apps. We are very excited about the prospect of shaping the world of dating together with Parship Group.
At The Meet Group, we have by far the largest streaming community in the industry. What’s our secret to success? If there are only a few matches and responses, users might soon start feeling lonely on many dating apps. But live video turns those moments of isolation into moments of connection. That’s because it is possible to get in touch with several people at once via video. For every person who starts a stream, there are ten people who want to watch it. At the same time, we provide entertainment on our platforms and are constantly integrating innovative new live games. This gamifying approach is a powerful engine driving monetization. After all, while many people do not wish to pay for a subscription, they are willing to spend money on virtual gifts. Plus, sales of our proprietary vPaas live video streaming technology is evolving into a lucrative business. All in all, we now have a level of monetization per user that is unmatched in the industry.
Making TV smarter
TV advertising is essential to high-impact campaigns. Advertisers are fully aware of this and honor it. After all, no medium reaches more viewers than TV. Nevertheless, the advantages of digital forms of advertising, such as the ability to automate the “programmatic” display of video advertising and target specific groups, have long been indispensable to the advertising industry, while offering a high return and value potential. That is why our sales subsidiary Seven.One Media is striving to break down the barriers between video advertising on online platforms and on TV. In other words, the aim is to make TV smarter – for the benefit of advertisers and viewers alike. In 2020, the Seven.One team took important strides toward that goal, once again making the case for the ProSiebenSat.1 Group’s pioneering role in advertising technology. Here is a roundup of the innovations.
On introducing the dynamic spot in 2020, our sales team has unlocked completely new possibilities for TV advertising – a form of real-time advertising that can be inserted into the station programming at short notice and without a long lead-in, thus allowing up-to-the-minute advertising. To achieve this, Seven.One Media developed a function that extracts the relevant data, such as current betting odds, sports results, flight or hotel prices, from the customer’s system and integrates them into a chart created in advance that is superimposed over the last few seconds of a traditional commercial. By bringing the digital world’s rapid-fire pace to TV, we are making the medium even more attractive to our customers. The first advertising customer to take advantage of the dynamic spot was the betting platform Unibet. As a result, the company was able to feature live betting odds in its ads at precisely the right time around German Bundesliga football games on match days.
Thanks to the launch of the CrossDevice-Bridge in December 2020, we have reached a new milestone. Our advertising customers are now for the first time able to manage TV and digital advertising campaigns across devices. So how does it work? Using a home’s WiFi router, our technology is able to link each device to a unique household identifier. Based on the household ID, advertising campaigns can be scheduled to run on all end devices – from TVs to smartphones – instead of just one, as was previously the case. It also means that, from now on, advertising customers can optimize their TV campaigns with additional digital touchpoints. The upshot is that TV forms an active part of the digital campaign and vice versa. For advertising customers, a long sought-after functionality has finally become a reality. Already today we can address a total of 37 million households via the CrossDevice-Bridge, thus covering the lion’s share of digital media usage in Germany.
The advertising industry has long expressed the need for a comparable level of quality in the measurement and evaluation of TV and video campaigns. While our customers can be sure of the highest standards with TV commercials – their TV ads are always visible on the entire screen, for example, and cannot be skipped by the viewer – things are different in the digital world: On the Internet, video ads have so far often only had to be visible for two seconds and the audio track not necessarily heard in order to be considered "successfully played out" and a person to be considered "reached”. It is uncertain whether the advertising message will reach the target group under these circumstances. In short, the media qualities of TV and digital contacts are too different, and their lack of comparability makes meaningful campaign evaluation impossible. With CFlight, we have been able to remedy this situation since spring 2021 and, together with licensor Sky Media, are offering transparent criteria for cross-media campaigns based on the highest media quality for the first time. The most important three criteria: Video advertising must be seen and heard in its entirety and may only be billed if it is actually played to the booked target group. In this way, we make advertising in both genres directly comparable and support our customers in measuring the success of their campaigns. In the USA, CFlight has already been successfully established by the media company NBCUniversal. In Germany, together with Sky Media, we are among the pioneers.
Over 1,000 advertising hours for promising start-ups
For over ten years, ProSiebenSat.1 has supported emerging businesses with customized growth strategies that simultaneously create value for the entire Group. The start-ups in the ProSiebenSat.1 portfolio focus directly on end consumers and impress with compelling, innovative business models. As a result, there is one thing above everything else they have in common: TV advertising is a crucial lever for them to make their brands known across a broad audience.
In response, ProSiebenSat.1 has put together an unbeatable package: reaching millions of viewers in front of the TV as well as further offerings provided by the Seven.One Entertainment Group. Through the media-for-revenue and media-for-equity investment models, SevenVentures, the Group’s investment branch, offers media services to promising young companies that cannot yet afford their own TV advertising budget in return for revenue or equity shares. In this way, we support growth companies with our advertising expertise as well as our powerful digital and TV offerings. These deals are a vital part of our growth strategy – and they create value for the Group: once a partner company successfully reaches a new developmental stage, we take a joint decision on whether to extend our investment or participate in their growth to date by exiting. Thanks to synergies with the entertainment business, this approach has not only yielded some of the investments in the present-day NuCom Group’s portfolio but is also generating growth potential for the Group as a whole. As a result, more than 80 companies benefited from over 1,000 advertising hours on our platforms in 2020.
Many start-ups approach us because they want to boost growth and put their names on the map. In most cases, however, they have gone as far as they can with pure performance marketing. This is where we step in and support growth companies with our reach and brand-building expertise. TV advertising helps them reach new target groups and builds trust in brands that are still largely unknown or even offer completely new products. With our unique investment model, we at SevenVentures have already helped companies such as Zalando, Lieferando and AboutYou to succeed while at the same time creating value for ProSiebenSat.1 – a classic win-win situation.Managing Director and Chief Investment Officer at SevenVentures
flaconi: A growth story enabled by ProSiebenSat.1
Advertising works. The flaconi growth story is a prime example of how value is successfully created in ProSiebenSat.1 Group.
In 2012, SevenVentures invested for the first time in the online beauty shop as part of a media-for-equity deal. Claas van Delden, now Co-CEO of NuCom Group, has accompanied the ProSiebenSat.1 investment from the beginning: “Right at the start, we got the ball rolling with the brand’s first TV campaign on our Group’s channels and subsequently expanded our involvement step by step.” ProSiebenSat.1 has been the majority owner of flaconi since 2015, and in 2018 reorganized the company under the umbrella of the commerce group NuCom Group. “With our TV and advertising expertise, we built the brand and, together with the flaconi team, transformed it into the leading online store for beauty products in Germany,” van Delden explains. “In these six years with ProSiebenSat.1 as majority owner, flaconi has recorded a revenue growth by more than eight times.”
With our TV and advertising expertise, we built the brand and, together with the flaconi team, transformed it into the leading online shop for beauty products in Germany. In these six years with ProSiebenSat.1 as majority owner, flaconi has recorded a revenue growth by more than eight times.Co-CEO NuCom Group
“Today, the company stands out for its loyal base with large numbers of return customers”, adds Florian Tappeiner, Co-CEO of NuCom Group. “And the shift in shopping habits from offline to online has further spurred flaconi’s success. While many competitors have their roots in brick-and-mortar retail, the company has embraced both an online-first and customer-first approach to the beauty business since its inception. The COVID-19-related lockdown has further accelerated online demand.” Unlike in physical stores, customers can pick and choose from the full range of over 800 brands on the platform. As a one-stop shop that provides both luxury and everyday drugstore items, the future potential is tremendous. “The online business accounts for only around 10 percent of the German beauty market, which means there is plenty of room to grow”, says Tappeiner. “And we also expect a further boost from flaconi’s increasing expansion into markets abroad, such as Austria and Poland.”
While many competitors have their roots in brick-and-mortar retail, the company has embraced both an online-first and customer-first approach to the beauty business since its inception. The online business accounts for only around 10 percent of the German beauty market, which means there is plenty of room to grow.Co-CEO NuCom Group
But already today, over 1.4 million new customers in 2020 alone and more than 100 additional brands in the product range are the best proof: flaconi is a growth story enabled by ProSiebenSat.1.