Despite missing targets, Blyk remains optimistic

Blyk, Europe’s first advertiser-funded mobile phone network, has parted company with launch marketing director Jon Fisher (MW last week), as part of a management shake-up, and amid suggestions that the service is failing to hit targets.

Fisher’s role came under scrutiny in February, as Blyk announced it was bringing in Virgin Mobile’s Dean Merrion as director of member sales and marketing. The operator is thought to have wanted a marketer with more telecoms experience as it looked to expand its business. It also brought in Telegraph Media Group’s director of new media Shaun Gregory as its first UK chief executive late last year.

The service launched in the UK in September last year, offering 16 to 24-year-olds free phone calls and text messages in exchange for receiving targeted ad messages. It was the brainchild of former Nokia president Pekka Ala-Pietila and was expected to herald a new model aimed at an internet- and advertising-savvy generation. The virtual operator, which runs on Orange’s UK network, has signed up 100 brands including Coca Cola, Sky and L’Oreal.

Setting targets

However, critics point to too niche a model and say Blyk is not yet delivering its growth targets. One industry source claims Blyk only has 51,000 subscribers. Blyk does not reveal subscriber figures, but says it will achieve its target of 100,000 users by September.

Gregory says the operator is performing well and that campaign response rates have been “great”.

The service works by enlisting customers in the 16- to 24-year-old bracket, who are profiled upon joining. The profiles determine which six ads a day they receive and which are further targeted depending on responses. In return, they are given a limited number of free texts and minutes each day, and are able to pay for further usage – with no contract.

Gregory says Blyk allows users to get information from the brands they want to deal with and adds that the service’s simplicity differentiates it from bigger players. “There is no huge contract hanging over your head,” he says.

Building associations

Analysys analyst Martin Scott says that although Blyk’s draw is its free services, it is developing customer relations by building associations beyond these. It has partnerships and agreements with bands such as The Kooks, offering competitions and information on gigs.

Yet the service has detractors. One media buyer says that Blyk’s youth focus could be “problematic”. “That is quite a cynical audience, likely to ignore the advertising that Blyk sends,” he says.

Meanwhile, Mindshare business director Claire Valotti believes Blyk launched too early. “Numbers are small and we’ve been disappointed,” she says, adding that brands will only spend if they are sure of reaching people.

As Will Harris of Enders Analysis says: “Blyk says they offer the targeting, but they don’t have the critical mass. They cannot deliver mass market if they only have 100,000 subscribers by September. Mobile advertising is too experimental to draw conclusions from.”

The operator insists its response rates have been solid. A L’Oréal campaign for a StudioLine hairstyling product had a 40% response to the initial MMS. Of these, 66% received an additional MMS on a competition, with a further 70% response rate. Gregory says Blyk provides advertisers with “a difficult-to-reach target audience, as they are very transient”.

Blyk is confident that, despite criticism, its model is sound and its future secure. It has signed a partnership deal with Vodafone Netherlands to launch there, and is preparing a raft of new content – such as games, wallpapers and videos – towards the end of the year.