NAR Acquires Ashley Madison, Plans New Consumer Ad Strategy

AshleyMadison

CHICAGO (April 1, 2014) – The National Association of Realtors® has agreed to acquire the online relationship website Ashley Madison (www.ashleymadison.com) from Avid Life Media for an undisclosed sum. Ashley Madison encourages extramarital relationships, with the tagline, “Life is short. Have an affair.”

As part of the acquisition, Darren Morgenstern, Operations Director for AshleyMadison.com, will join NAR as the SVP of Special Media Unit Team, reporting directly to CEO Dale Stinton. A spokesperson for NAR called the acquisition “strategic in nature” and that NAR plans to utilize Ashley Madison as the centerpiece for a new consumer-facing advertising campaign starting in 2015 tentatively called, “It’s Not Worth Saving”.

“We are thrilled to have Ashley Madison join the NAR team,” said Stinton. “We believe that the acquisition will really help accelerate the recovery in the real estate market over the medium and long term. The acquisition, and the new consumer advertising campaign, will help us deliver on the promise to our members to help drive their business forward during challenging times.”

“We were actually a bit surprised when NAR approached us,” said Noel Biderman, CEO of Avid Life Media. “We didn’t really think that our niche online dating properties had much to do with a real estate association. But once NAR explained the linkage between divorce and home sale transactions, we saw the light.”

Avid Life Media will retain its other web properties, but members of NAR will receive 25% discounts on all of its properties for the next 10 years. “Given the demographics of the average REALTOR, we thought the discount policy, especially to CougarLife.com, made perfect sense,” explained Biderman.

“Most people understand that household formation is key to the real estate market,” said Bob Goldberg, SVP of NAR who oversaw the acquisition. “But most people only think of marriages when thinking about household formation. Since Gen-Y is simply not marrying at the rate we need for a robust first-time homebuyer market, burdened as they are with student debt, a terrible job market, and odd dating market dynamics, we knew that the real estate market was in trouble over the next decade or so if we just rely on these twentysomethings to get married and have kids. What people don’t realize is that divorce also creates households — in fact, it creates two households from one. We aim to encourage household formation, one way or another.”

NAR’s strategy is to promote Ashley Madison to all of its one million members, on the popular consumer website Realtor.com operated by Move, Inc., and to all consumers through its members as well as local and national advertising. By encouraging consumers to use Ashley Madison, NAR believes that will increase the number of divorces throughout the country, particularly in the high-income urban and suburban markets that suffer from low inventory. NAR says that divorce is a major factor in driving inventory of for-sale listings, as the couple usually has to sell the house they have shared as part of the divorce proceedings. Furthermore, each former spouse usually ends up renting or buying his and her own residences, resulting in as many of three separate home sale transactions per divorce.

“If we can increase the number of divorces in the U.S. by 500,000, we estimate that will result in an additional 1.1 million existing home sales transactions,” said Lawrence Yun, Chief Economist of NAR. “By taking annual home sales from the 4.6 million rate we saw in February to 5.7 million we think we can achieve with this campaign, our REALTOR members should see a permanently elevated level of business for the foreseeable future.”

While conservative Christian groups were quick to condemn the acquisition, the deal has garnered praise from a wide variety of organizations, including the American Bar Association, National Association of Apartment Managers, and the American Association for Marriage and Family Therapy.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries, as well as online dating.

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Rob Hahn

Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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