Overview and a case of Blyk Karl Mikael Henriksson Helsinki University of Technology
Overview Methods for advertising Value chain Mobile Internet Blyk
What is mobile advertising?
No clear definition; several synonyms:
wireless advertising mobile marketing messages mobile advertising
dotMobi Advisory Group definition:
”The usage of mobile devices such as cell phones and mobile web browsers to deliver promotional messages.”
Sources: Haghirian & Madlberger 2005, dotMobi Advisory Group 2007
”More sources of information has led to more fickle audiences with short attention spans.” Marketing perspective: the mobile channel has a far wider reach than the PC‐based Internet or TV. Mobile advertising offers a broad reach and the oppotunity for instant response, thus capturing audience attention. A mobile phone provides a specific targeted communication channel to the consumer. The mobile channel delivers excellent effectivines for marketing campaigns.
Sources: Bamforth et al 2006, Mobile Marketing Association 2007
Directed to existing customers. To improve and keep up the customer relationship. Typically SMS and MMS notifications.
Selling ad space:
Ad space can be sold by operators. Currently SMS mostly used, MMS also growing. Mobile Internet ad revenue highly anticipated by the industry.
Sources: Anttonen 2008
As a part of a larger marketing campaign:
Mobile advertising is used in conjunction with other media. The mobile as a return channel provides the means for measuring the success of advertising campaigns.
Customer profile collections:
Matching the advertisiment with the target audience
Increases the response rate.
Important to keep the profile base clean and up to date.
Sources: Anttonen 2008, Ahopelto 2008
In the present and in the future
Presently typical methods include customer marketing and mobile marketing as part of a larger marketing campaign. Analysts expect mobile advertising to increase dramatically. Google entered the mobile Internet domain when the market for ad space started appearing.
Sources: Anttonen 2008, Brad 2007, Levy 2007
Finding the right customer
When advertising by mobile advertising, the advertiser knows at minimum:
The phone number The phone model The operator Which country
If no profiles has been gathered, the advertiser can still cross‐reference with demographic data.
Sources: Anttonen 2008
Three distinct industries are taking part: the advertising industry, the content industry and the telecommunications industry. The value chain is fragmented.
Traditional promoting channels
Sources: dotMobi Advisory Group 2007, Leppäniemi et al 2004
PC‐based Internet penetration is high, and companies want to move some of the Internet experience to the mobile domain. PC‐based Internet is completely open. The mobile Internet is expected to surpass the PC‐ based Internet in the future. Mobile Internet adoption has been slow in Europe, due to:
Technological difficulties Attitudes Expensive flat‐rate
Sources: Bamforth et al 2006, Edwards 2006, Ewing 2008, Ferris 2007, Anttonen 2008
Mobile Internet is a convenient way to quickly access information. As the mobile Internet evolves and users start using it, it’ll become a vast resource for ad revenue. The challenge of operators is ’how to open the mobile Internet in such a way that ensures the level of user experience is maintained and customer value increased’
Sources: Levy 2007, Edwards 2006
Blyk is an invitation‐only mobile virtual operator funded by advertising that links young people with brands they like and gives them free text messages and voice minutes every month. Launched in the UK in 2007, expansion to Dutch market announced in 2008 and later Pan‐European in 2008. Has a target of 100.000 subscribers in the first year. Positioned as a media company.
Sources: Ahopelto 2008
Operator business model innovation
Sources: Ostenwalder 2007
Blyk ‐ a media company.
Acquires new members through member‐ get‐member, online advertising and street teams. In addition, Blyk partnerships with artists which adds value to fans. SMS cost 0,07£ and response rate of 41%. MMS cost 0,22£ and response rate of 22%. Exceptionally high response rate due to focus on making the ads relevant to the member. In return, members get 43 minutes voice and 217 SMS.
Sources: Blyk UK, Ahopelto 2008
Blyk ‐ effectively a monopoly
Blyks competitors include magazines such as She and Loaded, which have a monthly circulation of 169000 and 115000 respectively and a single digit response rate. Blyk considers itself to compete with no‐one due to their exceptional return rate, 29%. First move advantage: technology, brand & user experience, advertiser relationships, no one else imitating in Europe. ”Ensuring the relevance of all advertising to members is the most important business aspect”. Sources: National Magazine Company 2007, IPC Advertising, Ahopelto 2008