Podcast: Blyk COO Leif Fågelstedt On Mobile Advertising,
We have lift-off! Timed to all the buzz around converged messaging in Munich this week, I caught up with Blyk, an ad-funded MVNO that has built its business model on the belief that advertising is content and that enabling a two-way conversation (via SMS and MMS) between brands and users is the best way to drive the best results. In this two-part podcast with Leif Fågelstedt, COO of Blyk, I examine the company’s track record and the pivotal role of customer profiling in the scheme of things.
Why the focus on Blyk? For one, it’s a perfect fit with my passion to analyze all things mobile at the intersection of content and context. Blyk has honed its customer profiling to send its users (between the ages of 16 and 24 – the toughest demographic there is) only those advertising messages that they (the users) deem relevant and valuable. Blyk understands the requirement to conduct its business at these crossroads (where content and context meet) and that is rare. It merits a closer look, and I recently attended an analyst roundtable hosted by Blyk executives to find out more.
Listen to the podcast here.
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Before I list some of the podcast highlights, allow me to focus on one presentation slide that stood out during the roundtable – one I believe speaks volumes about the brand power Blyk has built over just one year. (No wonder esteemed colleagues such as Emeka Obiodu at Ovum speculate on whether a mobile operator might not just buy up Blyk to pull ahead in mobile advertising.)
At first glance, the slide documents that Blyk has the highest “net advocacy score” among mobile networks. (Translated: 40 percent of those polled would recommend Blyk.) In my view, the real story is the company Blyk now keeps. It trails the likes of YouTube and Facebook – and has pulled ahead of MSN, MySpace and Bebo.
My take: It may not have been Blyk’s strategy to be in the same league as social networks and Internet giants – but Blyk has made the grade.
And that without spending “a single pound on marketing.” Leif tells me Blyk has become a word-of-mouth brand with strong appeal among members of a choice demographic of trendsetters, early-adopters and lead users he calls “The Recommenders.” True to the name, these young people try new things and pass them around to their friends. (Little wonder why friend-tells-a-friend referrals are how 6 out of 10 Blyk users learned about the offer and joined up.)
Can Blyk cash in on this phenomenon to enhance its appeal to brands as a provider of mobile advertising (more correctly mobile social advertising) content to youth?
I put the question to Leif during the podcast. Blyk isn’t pursuing a wider strategy around providing content and enabling mobile social networking – but it could. For now, however, research and focus groups confirm his views that users can and will get content and services from other sources and other kinds of channels. “The evolution of mobile advertising will not go to [in the direction of] more content. It’s about dialogue …it’s not about [adopting] online business models or anything like that.”
During the roundtable, I learned that some companies have approached Blyk – a numbers-run company that takes customer analytics seriously – with a strong interest in purchasing a white-label solution that would get them up to speed and pave the way for them to engage users, collect and collate data, and so effectively advertise to empowered consumers. Will Blyk do it? There are discussions but the company will stick to its knitting – at least for now.
Other podcast highlights:
ADVERTISING & ENGAGEMENT: Combining the two is a core value at Blyk and a key competitive advantage that has allowed Blyk to chalk up some impressive stats, including a 25 percent response rate among Blyk users to mobile advertising campaigns. In fact, the campaign by Penguin to introduce the book Slam by author Nick Hornby resulted in a 67 percent response rate. Over half (51 percent) of users downloaded an audio clip (a preview of the opening chapters) to their mobile phone. Mobile advertising is in need of a re-think (as Jonathan MacDonald is quite quick to point out). Leif agrees and sees some encouraging progress in this direction. “The industry is starting to realize that mobile advertising equates to engaging young people. It’s a communication tool.”
MESSAGING & MESSAGES: Blyk messaging traffic is fairly evenly split between SMS and MMS. Interactive campaigns generally consist of 2 SMS text messages and one MMS. The first text message asks the user if they want to know about a specific brand or offer; the second continues the conversation; and the MMS comes as a follow-up. It’s more natural for someone in the 16-24 year-old demographic to receive and respond to an SMS as opposed to clicking through to a WAP link. (I learned during the roundtable that even if the user says “no” to the first SMS, indicating they are not interested, they will get a message back acknowledging that choice and asking them if they would be interested in something else. This advertising is a conversation.)
Will other forms of advertising, such as display and search advertising, be the “next big thing” in mobile advertising? Not if it’s a conversation. “People don’t want to be advertised to. They want an experience,” as Leif put it. “I think if I take the research …there was a lot of discussion about what would be the driving pattern in mobile advertising. With the [advent of] display advertising, it will be search advertising. [However,] the latest trend reports I have seen … talk about the lion’s share of all investments already now [and] moving forward is based on message advertising. This is for the simple reason that it’s the most common [communication] pattern and the way people use their phones.”
NO-BRAINER CAMPAIGNS: During the roundtable, Blyk asked the big question: Why has mobile advertising not been happening, and why is it happening now with Blyk? Clearly, the emphasis on engagement is part of the answer. But Blyk also has ambitious plans underway to make mobile advertising campaigns (planning, execution and measurement) a no-brainer for brands. Leif couldn’t disclose details, but it’s clear Blyk want to make this dead simple. A welcome change from the bureaucracy brands typically face when they put in a call to a mobile operator.
(Indeed, many advertisers with significant budgets have told me they threw in the towel after making dozens of calls around mobile operators and their ad partners. Even Shaun Gregory, Blyk Managing Director, UK, revealed his own experiment -posing as a brand with a GBP25,000 mobile advertising budget – ended up with him talking to “no less than 27 touch points” at which point he gave up.)
As Leif put it: “We have been working with a lot of big media agencies, and we have developed booking and planning tools that they can use. We also have a couple of frame agreements now in place with the biggest media companies in the U.K.”
CUSTOMER DATA & MORE: These are Blyk’s crown jewels. Users freely share their preferences (filling out customer profiles to qualify for the service in the first place) and freely share their opinions with Blyk on what they think is hot – and not. Case in point is this user response to the question: Are you proud to be British? ^Y/N
“Being British is about drivin’ in a german car 2 an Irish pub 4 a Belgian beer, then on way 2 ya home, grabbin’ an Indian curry or a Turkish kebab, 2 sit on a Swedish sofa and watch USA shows on a Japanese TV. And most of all being suspicious of anything Foreign. Oh and.. Only in Britain .. Can u get a pizza 2 ya home faster than ambulance. Only in Britain do banks leave both doors open and chain pens 2 the counter. Also Supermarkets make sick people walk to the back of the shop 4 prescriptions whilst healthy people get their fags at front of shop. We might be british but by hell we’re funny!”
Read between the lines and it’s clear that Blyk is doing more than delivering mobile advertising and recording the response. It has become a brand users trust with their ideas, feelings and personal opinions. As Leif pointed out: “People are opting in [and] we have a lot of insight into [youth] trends.” This unique position – between the brands and the consumers – is money in the bank, so no wonder Blyk is “accelerating” the development of this “inside piece” of the mobile advertising equation. Knowing why users think a campaign is off the mark is as important as understanding why it is a success. “There are many brands that – before they run a campaign – want to test the waters and know ‘do I have the right value proposition, do I have the right messages.’ It can even be that advertisers want to know what TV shows young people are watching.”
My take: Companies will no doubt try to copy the Blyk model (in fact, MSG has reported on a similar ad-funded scheme here). But it’ll take more than free services to convince consumers to offer frequent and honest feedback to ad campaigns.
Remember Blyk isn’t only delivering mobile advertising. The combination of analytics systems and solutions (supplied by Xtract, a pioneer in social advertising intelligence whose claim to fame is its ability to tap into social interactions, behavior data and other dataflow to create dynamic real-time customer profiles) and Blyk’s own conviction that advertising is and must remain a two-way conversation position at the center of the exchange and allow it to keep its finger on the pulse of users long after the campaign is over. And that’s a powerful place to be.
More in Part 2 of this podcast series – so check back!
May 14th, 2009 at 8:28 pm
[...] In the meantime, I invite you to listen in to this podcast from last year, one of MSG’s most popular series. (You can find the second in the Blyk series here.) [...]