In a word: Yes. There are valuable lessons to be learned from Blyk and I have outlined these in my newly released mobile advertising white paper, Mobile advertising for newbies, which you can download here. (I am thrilled that the paper has been so well received, and even more pleased that my work has convinced avid readers such as Alistair Gillan to try it our for themselves. I hope others will follow and report their experiences back to MSG.)

Why did I include a section on Blyk in my white paper?

Because the company has had phenomenal success with SMS/MMS campaigns, reporting an average 25 percent response rate to campaigns that harness the messaging technology to enable a conversation with users. No doubt this success is linked to Blyk’s bleeding-edge approach to mobile advertising (no spam – no way) and customer profiling (drilling down to deliver the right ad to the right person). However, in my white paper I also argue Blyk stands as an example of what a well-executed mobile advertising campaign can achieve – and one that mobile advertising newbies should note.

The bottom line: Strategy matters. If we accept advertising is content, then it’s clear advertisers/publishers can get a long way if they use existing technologies (SMS/MMS) and focus energy on crafting creative (and engaging) messages. As my dearest and most disruptive colleague Jonathan MacDonald points out: Advertising is in need of a re-think. It’s not about selling hard; it’s about listening harder to what consumers want. Jonathan (ex-Blyk) has obviously left his mark because Blyk excels in delivering advertising as content in a two-way conversation with customers. (For more background on Blyk, please check out this earlier analysis on MSG.)

Against this backdrop, it’s excellent timing to continue with part two of the audio interview marking Blyk’s first anniversary, which I conducted during a recent analyst briefing with Leif Fågelstedt, Blyk COO.

A message that comes through loud and clear: Blyk is not about warm-and-fuzzy business models. It is a serious and successful company that systematically collects and wields analytics (customer data and feedback) to drive high performance. Mobile advertising is just one area where Blyk’s approach pays off. In fact, Leif and I mused that the real money may be in Blyk’s ability to reality-check brands’ preconceived notions about what youth thinks, likes/dislikes, and will likely recommend to their friends.

Listen to the podcast here.

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Before I deep dive into Leif’s views and my take, allow me to direct your attention to a recent research note from my esteemed colleague, Marek Pawlowski. (His thought-provoking analysis of mobile usability and user experience issues sets the bar, and his events attract some of the brightest minds in the business.)

We attended the same briefing, and have come to some similar conclusions. While I hint in my earlier post that Blyk should be considered as something other than an MVNO, Marek goes straight to the heart of the matter. He asks: Is it still appropriate to call Blyk an MVNO when the company’s real focus is on being a leading youth media?

While you’re making up your mind, some key figures tell us Blyk has long achieved this status. Some 100 brands have run some 1,000 campaigns on Blyk, reporting an average response rate of 25 percent. The response rate to some campaigns is much higher.

Seeing is believing (and also understanding why the campaigns struck such a chord with youth), so I asked Blyk to create a space where you can check them out for yourself. My personal thanks to Dan French and his colleagues who made this great graphic and the revolving carousel of mobile advertising case studies. Enjoy!

KEY STATS: ARPU isn’t relevant to Blyk and neither is CPM. The performance measurement that matters is Cost Per Response (CPR), which Leif says is “around 50p [pence] for Blyk. If you compare that with other media channels which our advertisers are looking at…[our] Cost Per Response is industry-leading.” Leif notes that other advertising channels cost much more if you want the same impact. The range is GBP1.50 (a figure he mentions in the podcast) to GBP2.20 (a figure Blyk presented during the analyst briefing). The point is: Blyk measures engagement (response), which is what counts on a personal device like mobile.

ADVERTSING MIX: Blyk sells each advertising SMS for GBP0.07 and each MMS for GBP0.22. “So the cost is 7 [pence] to send out the SMS and then 7 [pence] for every individual that is replying to your message.” The power of that two-way conversation is what allows Blyk to measure performance in CPR rather than CPM, a term “irrelevant to what Blyk is practicing.” Blyk assumed the lion’s share of pitches would be push-campaigns, but that has changed. “Probably 95 percent of everything we are doing right now is a combination of SMS and MMS, and [that] it can be linked to different websites….There are a lot of advertisers that have spent a lot of money creating their web portals and everything for mobile, and they want to drive traffic there.”

ROADMAP: Blyk is purposely targeting the countries where brands already spend the most to get their message across: Germany, Spain, Belgium, and The Netherlands. But prepare for some surprises from Blyk. “The first aim is to become the biggest youth media in Europe, and that is what we have communicated and that’s [what] we deliver. We are also looking to other kinds of opportunities outside Europe as well, but that’s not something I can reveal today.”

FREE SELLS: Blyk is ad-funded (hence, free to users). But it’s not an easy act to follow. Rivals would have to make significant investments in analytics tools and target the right growth markets. “We have invested a lot of money in profiling, ad engines, [as well as ways] to do booking and planning [of ads], and so on.” Leif also reports Blyk has “more partners than competitors right now in the marketplace.”

***

Shortly after this interview, Andrew Grill, MSG friend and frequent contributor, posted on a new ad-funded model called Tomato Plus from Croatian mobile operator Vip, a me-too Blyk model he strongly suggests we monitor moving forward. (You can check out the full post at London Calling here.)

By way of background, the brains behind this ad-funded model is global mobile advertising company Out There Media. The company has launched Mobucks, which it describes as a cross operator, cross advertiser marketplace, matching demand and supply for advertising over mobile phones. Mobucks effectively enables the creation of ad-funded tariffs for MNOs and MVNOs.

From the press release: “This mobile advertising marketplace enables consumers to sign-up, share their data, and receive targeted mobile SMS and MMS campaigns – which is exchanged for free airtime.” Out There Media reports response rates of “up to 75 percent.” Matthias Grundböeck, Vip Residential Marketing Director, is upbeat about his decision to launch an ad-funded sub-brand. “Mobucks AdFund by Out There Media gives us the opportunity to offer genuinely interesting, relevant and useful information to our customer base,” he said in a press statement.

I sent an email to Out There Media requesting a more in-depth briefing to answer key questions: What are the nuts and bolts of Mobucks and who is involved to date? How is customer data collected and what visibility does it provide into user preferences? How many ads, in what form (SMS/MMS) and from which brands? And the list goes on.

In the meantime, you may want to check out this related discussion at MobHappy.

My take: Blyk is a tough act to follow because it understands the business and the pivotal importance of customer analytics. Does the advance of similar models represent competition? Not in the markets that top the Blyk agenda. There, Blyk can protect its turf. However, the advance of ad-funded models such as Tomato Plus sends a clear message to mobile operators that they must choose their course.

To borrow from my esteemed colleague Chetan Sharma and his must-read mobile advertising book, Mobile Advertising: Supercharge Your Brand in the Exploding Wireless Market: Mobile operators must decide soon whether they wish to be access companies (pipes) or audience companies (media companies). If the goal is the latter, then they would do well to borrow a page from Blyk (and others) and focus on enabling an engaging advertising conversation with consumers (thereby gaining users’ trust and access to some key customer data) before other companies (search companies, social networks, media brands etc…) beat them to it.

Tags: bango, Blyk, MMS, Mobile Advertising, mobile analytics, MVNO, Out There Media, SMS

This entry was posted on Monday, October 20th, 2008 at 9:54 pm and is filed under Mobile Advertising, Mobile Content, Mobile Research, Mobile Social Networking, Personalization, Podcasts. 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.