SelectAlternatives, CEO Andy Sutcliffe Interview

OPW INTERVIEW -- Aug 23 -- You’ve heard of People2People. Have you heard of Select Alternatives? They also work with newspapers and offer them dating sites. Here’s the founders story. - Mark Brooks

What is the founding story of Select Alternatives?
Back in 1988 I was working for the Boston Phoenix, which is a weekly alternative newspaper in Massachusetts. I helped to develop the first 900 telephone response personal system that we were then able to leverage into a $100 million company, by offering very local personal services to newspapers in the US and Europe.

With the advent of the internet, the 900-personals business started a very precipitous decline. As I saw the major players in the internet dating space emerge, I thought there was still a great opportunity for people to meet people based on their psychographic interests. They already had an affinity for local alternative newsweekly and I thought we could create the next generation online dating and personal product by being hyper local.

So the basis of Select Alternatives is that it is a series of local sites (currently 27 local sites), each one engineered specifically for the demographics and psychographics of a particular alternative newsweekly or newspaper’s readership.

What is your favorite partner site?
My favorite is a newspaper in Seattle, Washington called The Stranger. It’s a very hip newspaper and has done extraordinarily well in transforming their readership from strictly print to an online readership. They call their personals site “Lovelab”.

What is the proposition to a newspaper? What cut do they take and how does it work for a newspaper?
Typically, there is an initial licensing fee. Newspapers then receive 50% of the revenue from memberships and 100% of local advertising that they sell onto the sites.

What do you charge for membership?
One of the things that really differentiates our sites is that we welcome users to surf throughout the site instead of putting up a “join now” barrier. That’s why we average over 16 pages per visit and we convert 35% of registrants to paid membership. We let people create a profile totally free and if somebody contacts them it’s totally free to respond. However, if they wish to initiate contact we then ask them to buy a membership. The prices vary because it can be determined by each individual newspaper. But typically the membership is $10 for 7 days, $20 for 30 days or $40 for 90 days.

Another way at looking at membership revenue and comparing it to advertising revenue is to divide the membership revenue into the total page views, divided by 1,000, in order to arrive at an average CPM. We average over a $7.50 CPM, with some sites as high as a $12 CPM.

What do the newspapers do in terms of promotion?
The personals link is on the main navigation of the newspapers’ home page. Secondly, on that home page we always put out a teaser ad that has a photo of an actual local member with a direct link into their profile and into the site itself. So those are the basics in terms of standard promotion. Different papers then create different programs. For example, The Stranger came up with a marvelous way of linking their readers to their advertisers by creating “Friends With Benefits card”. The Stranger contacted their local advertisers – coffee shops, restaurants, spas, etc. and said they were going to drive traffic to their establishment in exchange for a discount for their members.

How would you say you compete with the likes of a Match.com?
What differentiates our product from those big national players is that it is strictly local. Match.com is the “Wal-Mart” of dating. They have a gazillion products at a low price but if you’re looking for that particular person and you’re willing to pay a little more for quality, you’ll go local.

Finally what are your plans for 2008 through 2009? Are there any particular business development plans you would like to mention?
Clearly this model has worked in the U.S. This year I’m offering the product in Canada and I am looking for partners around the world – especially in Europe – who would like to represent the product to publications in different countries.