Interview: Leif Fagelstedt, COO and UK MD, Blyk: Can It Ad Up?
Today sees the UK launch of Blyk, the newest MVNO to hit Europe (see post). The operator will target only one age sector — the 16-24 bracket much coveted by marketeers — but is betting growing acceptance of mobile advertising will justify its decision to offer no-cost calls and SMS. So far, it has racked up an impressive list of big brands including Coca Cola, Disney’s (NYSE: DIS) Buena Vista International and McDonalds. But can Blyk convert low-ARPU subscribers to big profit? At the launch event, COO and UK MD Leif Fagelstedt told paidContent:UK: “(Advertisers) are drawn to us because we will be touching our users six times a day. That means six commercial messages, nothing more or less.”
No handsets: “We will mainly supply SIM cards. Users will mostly have their their own handsets. All we require is that they are MMS-capable. You can also buy a handset from us but we are not offering that as a special deal. We will offer all the big brands.”
No retail presence?: “We are doing what we think is right for this market. We are starting with the freshers’ packs for first-year students at a third of all UK universities, which we think will help us reach a good portion of the people we would like to target. We are building Blyk on invitation-only membership, and we also have five other schemes — different marketing activities — we will be launching. We will have some retail presence. Users can go to 60,000 places to top up their SIM cards. The choice has nothing to do with revenue sharing. You need to do something when you start that marks you out — that’s why we’re using an invitation-only system for now.”
Advertiser revenue share: “It will be the same for all advertisers: £0.20 for MMS, £0.05 for text and text response, and £0.02 for tagging at the bottom of another message. We like to call these ‘communication fees’ rather than advertising rates.”
Other revenue streams: “We are also looking at top-ups for the SIMs but advertising will be the main part of the business since we expect 4.5 million current mobile users in the UK aged 16-24 to fall within the usage allowances we’ve made as part of the free service.”
Succeeding in unproven territory: “The market for mobile advertising is projected to be $11.35 billion (£5.63 billion) by 2011, according to Informa. There are a lot of advertisers out there that are still trying to figure out how to approach this. Should it be about creating loyalty? Driving sales? Do you use your traditional agency? An interactive agency? Direct marketing? But the advertisers find the media compelling and interesting. (With Blyk), they will always start with a question: ‘Are you interested in this? Yes or no.’”
Abandoning 16-to-24-year-olds when they grow older?: “No, what will happen is that, if you are an advertiser that’s built up a relationship early on, you will want to continue having that discussion with your customer even when she or he is 25 or 26. But we won’t be starting to allow, for example, 35-year-olds to join the service.
