Blyk Is Back With Ad-Funded Service In The Netherlands; Will Social Media Marketing Make The Difference? » mobilegroove

In brief: Details of this week’s commercial launch in the Netherlands from Pekka Ala-Pietila, CEO and Co-founder of Blyk, PLUS an update on activities elsewhere and a look at the social media marketing approach that the company has chosen to stand out from the crowd.

Blyk — the company that launched the world’s first ad-funded MVNO in the U.K. in 2007 and then moved to operator partnership model in 2009 – is back with its first commercial launch and consumer-facing service. The direct-to-consumer, pre-paid mobile services offer is branded Blyk and offered in partnership with Vodafone in the Netherlands.

Following the blueprint of the business model it pioneered in the U.K., Blyk offers free text messages and calling minutes (1,000 SMS and 1,000 free Blyk-to-Blyk minutes) to youth (and then some since the demographic is 16- to 29-year olds) in return for accepting a set number of SMS/MMS mobile ads per day. Once again, Blyk requires users to opt-in from the start and chose the advertising channels they want to receive.

To ensure that users aren’t just opting in to receive perks, the Dutch service requires users to top up every three months and update the information. This permission-based approach – delivering users advertising related topics such as fashion and sports that they agreed to accept in the first place – helped brands achieve high response rates on campaigns they delivered to Blyk’s profiled audience in the U.K. Overall, Blyk says it delivered campaigns on behalf of over 2,000 brands and reached an average response rate of 25 percent.

As Pekka Ala-Pietila, CEO and Co-founder of Blyk, explained in this earlier interview, the only part of the puzzle missing back then was scale. Put simply, media buyers wanted to reach more youth than had signed up for Blyk’s service in the U.K. This is why Blyk made the move from an MVNO model to a partnership model where it now focuses on providing mobile operators a managed mobile advertising service and delivering advertisers a greater reach.

BLYK IN NETHERLANDS & BEYOND

I caught up with Pekka following the launch to get an update on the U.K. services (offered in exclusive partnership with Orange) and the overall outlook for mobile messaging and advertising.

Here is a summary of the key points:

Mobile advertising formats: Predictably, Blyk is bullish about the outlook for advertising delivered using a mix of SMS and MMS. However, Pekka sees opportunities beyond messaging that spill into app advertising and notifications. “We believe messaging is the paradigm. It will win and find its way into other multiple formats such as notifications in apps, which are also push, and instant messaging.” No matter what flavors of messaging emerge, Blyk will remain “platform and transport agnostic.” He adds. “We can use W-LANs and email to give us the breadth if we need it.” As far as formats go, messaging will dominate, followed by search and in-app ads.

U.K. and beyond: Pekka was tight-lipped about stats and details, but has promised to update MSG at a later date (together with Orange) on progress in the U.K. That update will include APRU numbers that Blyk achieved during its time as an MVNO. Meantime, Pekka is “very pleased” with the partnership with Orange (where Blyk is not a consumer-facing service) and Orange’s overall strategic view of mobile advertising. The Monkey offer, the Orange service that draws from Blyk’s mobile advertising model, is a “different offer and constellation” but the results to mobile advertising campaigns are similar. “We are seeing similar results although the set up and model are different. We anticipated this. So, we can report the results and response rates are at the high level we reached at Blyk – as MVNO – and now as partner to the mobile operator [Orange].

Increasing competition: Blyk may have been one of the first, but – as I show in my upcoming report on permission-based for GigaOm PRO — a slew of companies have since staked their turf delivering, enabling and brokering permission-based advertising. How will Blyk continue to differentiate? Pekka said the rise in the number of rivals confirms that messaging is where the action – and the business – is. “We are rolling out the right services in the right sequence of countries and this will generate results, allowing us to move up the learning curve quickly and ahead of the competition.” India, the largest youth market, is next on the list.

Blyk proposition in the Netherlands: In addition to the free texts, “attractive rates for mobile Internet, roaming and other benefits” are planned. One example could be a members program that rewards members for recruiting friends/peers to use Blyk. The service is branded Blyk and the focus is on growth through minimal marketing budget and maximum impact. Pekka noted that Blyk’s grassroots marketing campaigns in the U.K. had achieved a net advocacy rate similar to Facebook and YouTube. It plans to follow a similar blueprint to recruit members in the Netherlands.

RANDOM ACTS OF FREEDOM

Which brings us to my chat earlier today with Eric Kip, MD for Blyk Netherlands. He couldn’t give me numbers but he did let me in on the details of the company’s “random” social media approach designed to deliver very deliberate results. As Eric put it: With more than 50 MVNO brands jockeying for position Blyk had to go for “small events with big impact.”

The motto: “Blyk Likes Freedom, Do You?” (and how can anyone disagree with freedom??)

Eric tells me the Blyk team brings together two Blyk employees, a small agency and “students and advocates who just like Blyk,” to commit “random acts of freedom” to reward people for just being – well – alive.

Timed to the launch Blyk took over a store selling sneakers and sporting apparel, closed the doors and then offered the people inside a free pair of sneakers. “The idea is to enrich people’s lives with actions and excitement they wouldn’t expect.”

For the twenty-something crowd, the Blyk team plans to reward people in coffee shops with lunches and perks. “We’ll just pop up and pay for their lunch.” Other campaigns will revolve around free movie tickets. Eric is even mulling over whether to make it all into a game and encourage youth to guess where the band of Blyk do-gooders will show up next…

My take: Reams of research (including the research I conducted for Mobile Advertising Research U.K., a research project endorsed by the Interactive Advertising Bureau (IAB) and the Mobile Marketing Association (MMA) to expertly document the state of the mobile advertising industry in the U.K.) suggest that permission-based advertising is at the center of a virtuous cycle for all stakeholders. People opt-in, choose their advertising and – in the process — volunteer personal information. Brands and advertisers then use these insights to deliver advertising the people who most likely want to hear their message in the first place. It’s early days, but high response rates speak volumes. Display advertising appears to be different because it is one-way not two-way. Permission (in the form of opt-out) may quiet privacy concerns but the principle lack of a brand conversation (a text exchange that asks people if they like what they see and factors their answer into the marketing response) doesn’t let brands get quite as close to people as they would like. More about that in my upcoming GigaOM PRO report on permission-based advertising models.

In the meantime, Blyk’s launch shows progress and proves the permission-based model has benefits. But even more interesting is Blyk’s decision to go for small “events” with big impact. Because the business is people-focused (as permission-based advertising is), it makes good business sense to connect with people directly at the grassroots level. It is not social marketing – it’s the way all marketing of services in this space (and beyond) will have to be.

Disclaimer: Blyk is an MSG supporter and has authored a series of sponsored thought leadership columns examining mobile advertising strategies and business models.

This entry was posted on Thursday, May 6th, 2010 at 3:58 pm and is filed under Mobile Marketing, Mobile Social Media, Personalization. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.