Ad-funded model takes new steps
Blyk is currently getting the headlines for its impending launch of a “free” MVNO service. With an impressive sounding roster of advertisers, plus the strong rumour that Orange UK is to be the first host operator, the MVNO is looking at plenty of nice publicity.
Yet how will ads be served? What services will Blyk itself actually offer? Who will the host operator be? What does the launch tell us about the ad-funded model for other services and operators? A lot of questions remain only partially answered.
Blyk’s spokesperson has said that the original intention was to have the host operator named by Monday 26th march, but that in fact confirmation should now come within the next couple of days.
As for services, Blyk has said it will offer voice minutes and texts to customers willing to look at ads. There are no plans to provide content and media services so far, the spokesperson said. Yet aren’t those just the sort of services the teen market being targeted by Blyk is interested in? The spokesperson said that it could be that if a user expressed an interest in a service available from a particular advertiser then that advertiser could be the one that provides the service.
And if only voice and text are available as services, how will ads be served? Again, the spokesperson said she has “not seen” the formats so far, so doesn’t know what form the ads will take.
The important part of the business, the spokesperson pointed out, is that users will only get ads from companies they have agreed to, with an interactive element to them, allowing a response of some kind.
The company responsible for this “clever” part of Blyk’s business – the insertion of ads into media streams in real time, and the interaction with the operator’s own customer systems to make sure only relevant ads are served – is First Hop.
Speaking to Mobile Europe, First Hop’s ceo Timo Laaksonen said that Blyk had developed its ad-based solution on top of FirstHop’s existing service delivery platform (SDP), to add to the SDP’s existing ability to create and control services on a sponsored or ad-funded basis.
Laaksonen said, “There’s complexity in the real time ad insertion algorithms. We have been working very interactively with Blyk, talking about how the system should work, how the ad insertions should interact with Blyk’s customer segmentation model.”
Laaksonen said that there would be nothing to stop other operators using the technology to create their own packages based on ad or sponsor subsidies, but he thought that Blyk’s customized ad-only approach had cleared a few barriers.
“On the mobile side, there has been a lot of talk about advertising, but it has not really taken off well. There have been too many parties protecting their own revenues. Now here’s a player starting from scratch, so I think they need to do things differently to make a splash. I think they will teach a lot of people whether this is the right way to go about it or not, and in the next year or so we will see if this is the right approach for the mass market,” Laaksonen said.
Advertising revenues and sponsorship is going to be important going forward, and the more we go into internet-style services, the more difficult it’s going to be to avoid it, Laaksonen counseled.
That said, given the number of services that people have proposed would lend themselves to ad-funding (IM, social networking, TV etc) is it a little ironic to see the first player come to market with a voice based “free calls” model?
“I wouldn’t say ironical is the word,” Laaksonen said, “It’s a different approach and we needed somebody to shake the market up a little bit.”