Blyk shows the way on advertising-funded phone calls

Stuart Corner
Monday, 04 February 2008 10:36

Opinion and Analysis

Hartley commented: "The most striking aspect of speaking to Blyk is the effort it places on describing itself as a media company, nowhere more prominently than when discussing advertising response rates. The headline figure of 29 percent is far above anything that online banner advertising or even traditional media can return. Blyk quoted figures for these media of well below one percent. Blyk also reported that some campaigns achieve a response rate of over 50 percent. As a result, it feels confident enough to increase its ad rates for 2008 by 10 percent for MMS and 40 percent for SMS."

Blyk also has the potential to earn revenue from customers who exceed their free download quota, but it wasn't revealing how much it is making from this source. One obvious threat to Blyk, as Hartley observed, is that attractive and cheap capped plans could easily deter users, especially Blyk's target demographic, from using its service.

His conclusion: "Overall, Blyk provided a positive outlook and encouraging signs that it is approaching mobile advertising in the right way - as a media company offering a profiled audience to advertisers, rather than a telco touting its subscriber base for sale. For that it should be applauded and it is certainly pushing the advertising model forward. However, it is still a very niche offering and without sufficient scale and flexibility it could become increasingly exposed to changing market conditions."

Those conditions will certainly include every cheaper mobile phone calls especially when carriers start implementing the long term evolution of 3G - which carries voice as IP packets - in much less bandwidth than today's cellular networks - in three or four years time.

Although Blyk might be trying to portray itself to the industry as a media company, to its mobile customers it is clearly a mobile phone company. But that's not to say that alternative means of covering the cost of phone calls, other an user pays, won't see this turned on its head by Blyk or somebody else: ie the phone service is not the primary offering or the main reason customers pick a service supplier: the calls are just part of a bundle of services and are not charged as a separate service..