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Where is ADULT heading at the end of 2017? (31)

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Hello again everyone!

I just returned from Prague the other day, where I attended The European Summit (TES) Conference. TES was the first conference I ever attended, and I keep on returning there ever since … been there like 5 or 6 times already. This conference started as an ADULT only event, but for the past few years, the organizers tried to venture out to more areas of digital marketing.

However, it still has the adult feel to it, with all the hot and barely dressed models walking around, and waste majority of the exhibitors are adult companies too. That's why I keep on attending this event from time to time, to stay in touch with the adult industry and to see where it is going.

SO WHERE IS THE ADULT INDUSTRY GOING AT THE END OF 2017?

For the past few years, the whole segment was dominated with MOBILE… it was everywhere, mobile traffic networks, mobile affiliate networks … mobile this, mobile that … And this has changed this year. No more huge booths from the market leaders, they been present still, but on a much smaller scale.

It's clearly visible that the regulations have hit the Carrier Billing Adult offers pretty hard. Large part of them moved to the mainstream side of things, where the regulations ain't that heavy yet. Or let's just say, mainstream offers can run in more GEOs than adult products – think about the Arab world or some large Asian countries.

I've seen the traditional, cover-all Affiliate Networks, trying to get some more business going with the adult crowd … companies like Leadbit, Terra Leads, Advidi, Adcombo … just to name a few, these were not present on these shows in the past, but more and more of them exhibit at adult events every year. And as you can guess, they are the strongest in evergreen offers that sell well on adult traffic … Dating, Nutra (especially male enhancement), Casino/Binary etc …

Dating is kinda dominating the adult industry for a few years now, along with Live Cams, which was another vertical with several companies presenting their Cam platforms. Dating companies had a significant presence too, many of the old-timers were there, but also a few newer ones like Xcash.Com for example, which is another operation launched by the BrokerBabe/Glize guys.

The trend in dating is clear, all the platforms are moving to Europe, even the eastern part of it, so not just EU … but also other emerging market. This is good news, since we all know the TIER-1 GEOs are pretty hard to work with, especially for the new guys. Whitelabel dating sites are still running strong too, I've seen several companies advertising this concept … HubPeople for example.

There is one newcomer in the pool : Adult Games … not that it would be a completely new segment, but it's been growing lately. It's actually one of the few niches that seem to be growing in the mobile Carrier Billing area too. This might be a good one to look at right NOW.

HOW ABOUT THE ROOTS OF ADULT – PAYSITES?

The extinction continues … I've seen only a few individuals representing production companies or traditional adult affiliate programs, that are still running paid content sites. There were more TUBE site owners than paysite owners … which is quite ironic as the Tubes cannibalize on the content from paysites.

Well, this has been the trend since like 2008 or so, I'm pretty sure nothing's gonna stop the tubes now. The paysite market has consolidated since, there are a few strong players remaining in the business, along with a still-decent amount of independent smaller productions. I'd say the market might be stabilized by now, so the paysite model is here to stay with us … the audience is still there. Especially for those who experiment with new technologies – 4K, virtual reality…

Based on the info I have, there are still 3 approaches that can sell paysites well – Review sites, Discount sites and HEAVILY niched sites. So if any of you plan to start some adult site, I would consider some kind combination of the above 3 … Niched review site with discount offers maybe? Sounds like a worthy plan

Regular TUBE or general FREE Site traffic is very hard to convert on any paysite, since the users already get it all for free on such sites … that's why Dating and Live Cams are the best selling products on such traffic … you simply cannot record and give away a dating or live cam experience for free

IS THERE BRIGHT FUTURE AHEAD?

It's bright for some, not so bright for the others Adult itself, as a vertical or niche, is definitely not going anywhere. People simply want to look at adult content, so the traffic isn't going to decrease, it will actually go up, since the worlds population is growing too… and so is the access to high speed internet.

Monetizing the traffic is a different story, it's getting harder now, because of the mobile downswing which has been driving large part of the industry for the past couple years. Right now we're waiting for the next big thing … hard to say what it's gonna be… VR maybe? Doesn't look like that for now, but hard to say just yet.

Anyways, since the traffic is there and the owners want to sell it, business is still thriving for the various traffic networks … Exoclick is still dominating and no other networks comes close in terms of volume. The other STABLE players are TrafficJunky, TrafficFactory, TrafficHaus, TrafficStars, JuicyAds … not much changes here either.

I've seen one change though, when it comes to traffic networks … mobile impressions are now cheaper, again because of the Carrier Billing regulations, since those offers were responsible for very high CPM rates in the past.

Dating, LiveCam and Nutra affiliate networks should be fine too, just as the affiliates working with these verticals. Also anything that has to do with LeadGen and is “compatible” with adult products, should do just fine.

Judging by just this one conference, I'd say the adult industry has passed the worst years and it's climbing back up slowly… there were more attendees again, more exhibitors too … BUT there was less affiliates.

This was another trend that I noticed for the past few years already, the adult business is moving more to a B2B form of cooperation, there seem to be less and less of the individual affiliates. So offer owners are looking to form in-house media buying teams and work directly with the traffic sources, for example…

The good thing here is : underpaid media buyers will hardly come up with better optimized campaigns than a seasoned and dedicated affiliate. Those who are qualified enough, will start working on their own most likely. So I'm not really afraid of this at all.

BUSINESS AS USUAL …

Yup, that's how I'd sum this experience up … no major changes going on, except for the mobile decrease maybe … but no doomsday at sight either The major players are still in the game, stable verticals are still generating millions of dollars and there is still a large part of the pie up for grabs

Dating, Cams, Adult themed Nutra, Casinos … plus the growing Adult Gaming segment … these are the areas to focus on at the end of 2017 and probably a good part of the next year too. It's still a competitive game, and it's most likely going to increase again as the pressure from the B2B approach keeps on rising.

But for those, who're willing to dive in and give the business what it needs … adult is still a very viable option to generate lot's of revenue from the affiliate model, and it's gonna to stay that way for quite some more.

Thanks for reading

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Great share Matej!

Since automation is becoming a trend that is evolving quickly, I was planning to start an Adult follow-along to split-test Manual vs. Automated optimization.

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If you guys can develop one that is solely for Adult Banner traffic will be really awesome, especially those big ones that are missing such as Exoclick, TrafficFactory, Ero Advertising, Traffic Junky, etc.

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Thanks

Automation is really gaining ground lately, it could be of good use in adult too ... especially pausing banners or whole placements based on pre-defined criteria. Could help to stay away from some BOTs too

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Hey @matuloo , Thanks for your post.

You say the adult dating is still profitable, but for me, i run muti-verticals in Popunder. And nowaday, dating is much more difficult than other vertical(eg:sweep).

So i wonder do you run dating in Pops? And does banner are easy than pop for adult dating?

and one more question, I read that in your other thread:"in us,dating Cr has to be around 10%, and the epc around 0.3 ".

so in your case, the us dating offer payout is around $3, but in my case , I can hardly find a soi dating around $3, almost are 1.2-1.35. So in that case,

Are u talking about doi or my payout is too low?

Thanks again

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POPs isn't generally the best traffic type for dating, there are too many quality problems with that.

Regarding the numbers that I posted in other threads, please take them as ROUGH numbers that I posted because the OP wanted to see some numbers. It's not possible to give ONE conversion rate or EPC that would suit all campaigns, traffic types and offers. Those numbers were a rough AVERAGE of what I was seeing at that time. It goes up and down, there are so many factors to consider.

DOI offers are a bit harder to convert, but when done properly, there are less quality issues with them.... so yeah, I focus on DOI mostly.

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Awesome post. The European paysites seem to be doing quite well despite the tubes seeing as they're constantly launching new brands.

I wonder if it's perhaps people are treating their porn subscriptions like they treat their Netflix subscription. Sign up for a month, binge watch what they want, cancel, and move to the next brand to binge.

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There are a couple of strong EU productions for sure, DDF, 21 Sextury ... those who were able to put their shit together did survive ... even with tube capital like DDF for example who is now owned by the same guys as xvideos.com

It's quite possible that some studios try to fight the saturation with launching new sites all the time, hard to say what's their motives ... but it's still good to see that there is some market left for them.

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where recommendations to buy adult traffic/dating? and pretty much the prices, because I would be interested to move something, if you have other tips are welcome!

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Great report Matej, thanks for sharing the latest info from TES with us!

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Great overview - thanks! Very interesting stuff.

I can comment on one small area of your overview from my own work. VR porn seems to be growing pretty rapidly and profitably from what I've seen in the VR space. Still small numbers, but the people who are into that content have the available cash (after all, they just shelled out $2k+ for a VR rig) and the willingness to pay for it.

It's mostly a fight over high-quality content at this point. Picking a winning offer and targeting it intelligently with media buys won't make you rich, but it could be a decent campaign.

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Good point, those with proper VR equipment definitely could be solid clients for VR porn producers. However, I saw that most companies try to use the "headset" for phones approach thou, even giving away paper or plastic headsets to their subscribers ... but the experience is nothing special to be honest - not sure if this is the best approach. I guess time will show

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These are questions that there is no answer for, no matter how much I'd love to give you an answer. Especially the prices ... it depends on traffic type, format, network, GEO ...

If you want to try dating, I would recommend to take a look at banner traffic on the large networks such as trafficjunky, exoclick (not RON), trafficforce, trafficfactory ...

The best bet now, if you want to do anything in adult, would be to read this article of mine : https://stmforum.com/forum/showthrea...here-you-start!

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Thanks for the answer, the traffic that I wanted to try like geo: italy, traffic type: mobile

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I assume that you are looking for 3G/Carrier traffic, exoclick has the largest volume.

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Thanks Matej,

Very insightful and interesting.

I think its about time we get a proper VR headset to "test the merchandise" in conferences :-)

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Could be true, I tested the "plastic phone holder", not saying it wasn't a fun experience ... but nothing groundbreaking either I might change my opinion when I test "the proper" setup.

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I really appreciate the insight from you Matej, and working as an internal media buyer for a company on the adult part of the coin only, I couldn't agree much more with all you've said

Adult is live and well and will keep on making money because people will always find a way to (and actually do) get laid The art of monetizing those people..

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Yup, the traffic will not go away, so it's always about finding a way to monetize it

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great post @matuloo i've been in the Sitges event 6 months ago and felt very similar to what you mention.
traffic in adult is limitless, it's all a question on how to sell it to dating/cams
(or maybe a smart mix of the two)

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Yes, the traffic is there and always will be ... the ways of monetizing it are changing over the years, sometimes it's easier, sometimes harder ... but there should always be a way to make that happen

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Matulo I read before about some correspondence forum members did about cams, and it's kind of appearant Dating (flirty+adult) is rulling the space and Cams are a bit trickier to sell.
did you personally ever had some success yourself with Cams?

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Yup, I did quite nice numbers with cams, but my approach was to build organic traffic : part was based on whitelabels, part on custom built sites targeting related keywords. I also tried paid traffic, but stopped doing it after a while ... the real $$$ in cams lie in revshare, which means waiting months to really see what the lifetime value of a customer is, which can get costly.

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What is this carrier billing regulation you've mentioned? Can't seem to find info on it anywhere
And how does it affect such that it lowers mobile cpm prices?

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Carriers define more and more strict rules in order to provide the billing part.

When it all started, they didn't even care if the price of the subscription was properly displayed on the offer page. These days it has to be clearly visible without the need to scroll down, for example. Same with creatives, they didn't care what banners or LPs were used back then, these days it's all regulated and toned down from the most part.

This results in lower conversion rates, lower income per 1000 clicks ... so naturally it also lowers the CPM bids, cause people are making less $ from the same amount of traffic, so they have to bid lower too.

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Say, got a quick Q to append to this thread:
in today's market what's a decent average you see from free tube traffic
to LP and from there to the dating offers?
What’s a solid benchmark to shoot for to know the campaign is on the right path?

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This is really hard to say, since it's different from one GEO to the next, from desktop to mobile ... some banners send visitors that click through better ...

I know you would love to see some numbers, so i'm gonna give you some rough numbers, but please, take them for what they are... ROUGH AVERAGES!

Banner CTR needs to be above 0.10% in NTV spots, otherwise its almost impossible to make profits with it. 0.15% is doable too, in good spots, you can go up to 0.50%.
LP CTRs have to be around 20% and higher sometimes, you can profit with lower numbers, but it's hard. 30% is still quite normal to have, going higher is hard and usually a result of some misleading elements.

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Also, in dating offers, rough estimates of course, what's a reasonable CR to get from a dating offer?
to see also that the offer is a solid one, what's a minimum CR (for optimized traffic) U shoot for?

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This is one of the questions that there is no answer for, check the screen below, it shows some of my dating campaigns, all of these are profitable.



To give you some ballpark figure ... I try to aim for 8-10%, depending on how well they click through the LP. As you can see in the screen I shared, with higher LP CTR, the final CR is usually lower and vice versa.

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Thanks for sharing matuloo very kind of you. I guess they're scattered through multiple GEOs so as you mention they vary

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Yup, it's a mix ... but even in one GEO, it looks pretty much the same. It all depends on the placement, creatives, LPs ... there is nothing like an average that would actually have some "value".

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