After a post before Christmas where I expressed a little surprise at the exceptional response rates which Blyk were reporting, I had an email from Jonathan MacDonald, their Sales Director - and today spent an hour or so up at their offices talking about what they're up to.
I've found Blyk unusually opaque so far - being outside their target audience (which is strictly 16-24), I've not been able to sign up or try out the service, which means that most of what I knew of them was gleaned from press releases, blogs, and a presentation at MEX 2007.
Some of what I was told I've agreed not to write about just yet - so in the interest of objectivity (as if you can expect any here - you can expect this site to reek of my personal biases), I'm not going to comment on any of that side of things, positively or negatively. As for the other stuff: all the stats quoted below are from Blyk; they seem acutely aware of the too-good-to-be-true nature of these and are getting them audited by an independent third party.
The business is much more about targeting than I'd previously assumed. Their offering to advertisers is the same thing which folks like Tomi Ahonen have been writing about for years, and which the mobile industry has largely failed to deliver on to ate: aggregating vast amounts of information about subscribers and using this body of data to deliver relevant advertising. To do this, they're gathering information in three ways:
- A lengthy sign-up questionnaire which is filled out when members first join; Blyk see a pattern of behaviour where members who've not initially signed up return once they see the coupons, ads and promotions which members who have filled out the questionnaire fully get;
- "House messages" delivered from Blyk to its members once or twice a week, asking simple questions ("what's your favourite band", that kind of thing). They reckon that responses to these questions (which get a response rate greater than 29%) are almost a form of vanity publishing or self-expression - but they deliver useful data for targeting purposes;
- "Dialogue" ad campaigns: i.e. those which don't just involve sending a message out to members, but asking a question and then delivering a message depending on the response. So "Do you want a cheap holiday" might be the opening message of a "Dialogue" campaign. If a member replies "yes" then two things occur: Blyk get useful information about that member for future targeting, and their advertiser can opt to deliver a useful, targeted promotion at that point;
As for commercials: 6 (according to their research) is the number of campaigns customers will bear per day (it feels high to me but with decent targeting I can see how that might work), and a campaign might consist of several messages. There's lots of possible variance here but I can see their argument that a campaign is not just a single message.
They don't seem to be being abused by their members. 75% of Blyk customers don't use their monthly allowance of (the bizarrely chosen) 217 texts and 43 minutes of talk time.
They do see a phenomenon that we've observed with services we've run in the past: a small (5%ish) percentage of responses to Dialogue campaign questions seem to be free-text answers, and Blyk see members messaging them directly and spontaneously with conversational texts. The geek in me is really curious to see what they do with this phenomenon - how they manage communication with these ardent customers... and whether they meet the expectation these enthusiasts have for human communication.
Overall: I have to say I'm less sceptical now, and once the figures they publish have some credibility (which could be achieved by a trusted brand backing them publicly, or via the transparent and open auditing they plan) I they'll get a warmer reception (and the rest of the mobile ad industry a bit worried, given their respective response rates).
If that happens, I'd expect to see other operators look to get their houses in order and start to do the same tying together of customer data that Blyk have achieved, in order to supplement their ARPU with revenue from the ad industry. After all, if Blyk prove the model there'll be an awful lot of mobile subscribers out there who *aren't* signed up with them.