storm: Kids, phones, ads, free
June 30, 2008
The idea of offering free phone service in return for
putting up with ads has been around years. Marketers
tried it but no one could figure out how to make it
What was missing, it turns out, was kids. Lots of kids.
A British company, Blyk, has come up with a formula that
seems to work. It is now expanding into Europe, and
something like it will likely be seen in the U.S., and
Here's the deal: The target users, 16- to 24-year-olds,
get 43 minutes of free phone calls and 217 free text
messages a month for agreeing to view about six ads on
their phones each day.
Ads are even targeted, based on the 60 to 100 data
points users provide in a questionnaire when they sign
Blyk began offering its service in the UK just nine
months ago, and it says it's well ahead of where it
expected to be, with 155,000 customers, passing its goal
of 100,000 signups six months early. It has run more
than 900 campaigns already for advertisers who include
Coca-Cola, Buena Vista, L’Oreal and Penguin, the book
publisher. It claims a response rate to ads of 29
“They seem to be very successful in that regard,” says
Jessica Ekholm, principal analyst at Gartner, the
technology research group, in Britain.
It’s a case of offering the right consumer the right
product at the right price—free.
“People were a bit surprised by Blyk’s success, but it
fits the criteria for that niche group of subscribers.
They don’t have a lot of money, but they do have time.
And brands want to get their message to them,” says Tole
Hart, research director for Gartner in New York.
Blyk will launch in the Netherlands later this year, and
next year it plans to expand into Germany, Spain and
Belgium. It has an eye on Asia and the U.S.
There are a few other companies out there offering
customers free top-ups on their paid plans in return for
viewing ads, such as Virgin Mobile’s Sugar Mama’s plan,
but Blyk’s model is based on a totally free service.
Analysts on both sides of the Atlantic are not aware of
any other offerings on the same scale as Blyk in their
“They are pioneers,” says Robert Thurner, commercial
director of Incentivated, an independent full-service
mobile marketing and advertising company in London.
Yet there are still some questions over the business
model’s long-term viability. For one thing, the company
has yet to reveal anything about its finances or when it
will achieve profitability.
But the bigger issue is whether consumers will be turned
off by the ads over time. It is still too early to
assess the churn rate, but that will be important to
factor in when assessing the number of users later this
“If someone hasn’t used their SIM card in six months are
they really still a member? Not really,” says Steven
Hartley, senior analyst at Ovum, a telecoms research
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