Blyk Can Transform the Communications Industry – says Yankee Group

November 28th, 2007

Of course we wrote BB&AB Before Blyk and After Blyk And now the Yankee Group has done its own analysis of why Blyk is such an important part of the media revolution. There are no real more Ad $$$ for mobile so they have to come from somewhere else. There is no doubt Advertising $$$ are migrating to mobile

So this is what the Yankee report outlines

Blyk?s performance doesn?t concern only Blyk. The Blyk effect could transform the
world of mobile communications forever. If it?s successful, some industry players and observers will have to question every closely held belief they?ve ever had about the way this business works. Blyk will help determine whether access to basic mobile services can be made free to end users at the point of use. Blyk?s experience will help us to understand who will foot the bill for this, and how the balance of power will shift between some of most powerful global brands in communications and FMCG. Blyk?s launch is important?very important.


Giving Customers Something They Value

Blyk is different because it gives consumers something they value?free calls and texts. Providers of other mobile advertising services ask consumers to continue paying for their service as normal, but also to agree to accept targeted advertising, which is not a great deal for the end user. Why should customers play ball? The only reason Europeans have not yet adopted ad- supported payment models for mobile services is because it has not been offered to them on terms that are acceptable and attractive. This will change. Our most recent survey of European mobile phone users revealed that 26% would avail of ad- supported models for mobile entertainment services, and 19% for basic communications services such as those offered by Blyk (see the Yankee Group Anywhere Consumer: 2007 European Web/Data Survey). Demand for mobile advertising does exist. The industry just needs to figure out how to make the user?s experience tolerable, and preferably enjoyable.

We are going through a technological, social and commercial revolution. Successful economies are good for society. So Blyk wants to make money, that’s healthy but it also want to challenge the fixed orthodoxies of what advertising/media and communications is in today’s world. And that is a good thing too.

Tomi wrote in his post Blyk, Blyk Blyk, what makes it tick?

March of 2007 Vodafone UK spoke at the Mobile Youth conference, and revealed that Vodafone’s current segmentation model has 14 segments (for contrast, at the same event we learned that Tesco’s the UK supermarket chain has over 10,000 segments). Vodafone has under 16 million subscribers today, so it means that the average segment size is a bit over a million. That is also the level of granularity and customer insights that the Vodafone UK segmentation model could hope to deliver for any advertiser hoping to target and profile customers.

Consider these extremes. If Blyk was so weak as Vodafone UK in its segmentation, and able only to analyze its customer base to 14 segments, then out of its much tighter target customer base of 4.5 million customers, Blyk would have target segment sizes on average of 320,000 customers (already considerably more precisely targeted than Vodafone this year.

But what if Blyk has a totally modern segmentation system like Tesco’s and manages say 10,000 segments? Then the granularity brings us to segment size averages of 450 customers !!! WOW. How tightly could you make customization and personalization if the customer insight allows splitting into such precise groupings. Not “youth fans of rock music” vs “youth fans of rap music” and not EVEN of splitting customers by their fave bands – but actually splitting customer groups based on the TYPES of songs played by a given band or artist..

And yes, the boys who like skateboarding, the girls who are into mountain biking, the boys who like not only videogames, but specififically CounterStrike, versus those kids who play in World of Warcraft and so forth.

Yankee Group asks

There is uncertainty about exactly how consumers will respond to receiving up to six marketing messages per day. Some will tire of it and defect to another provider while some will accept it in exchange for their free minutes and texts. At least Blyk can be sure that all of its target customers will be able to engage with the brands. Mobile messaging works and it works reliably. Using an established and trusted platform as the basis for a brand new initiative, no pun intended, is smart.

And then we get the first response rates Blyk response rates are 12 to 43%.

According to the Direct Marketing Association normal response rates on mobile are 3 to 6%.

On the internet response rates are .2% says e-consultancy

What does that tell us?

On June 7th We asked What do, Cyworld, the iPhone, blyk, Admob, MyNuMo, Artists first, Moblog UK have in common?

And we answered They are all part of the 7th Mass Media: Mobile

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