Blyk CEO on Shots uptake at Everything Everywhere, threats to messaging ad‑focus
10 February 2012
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Everything Everywhere (EE) MMS and SMS advertising partner Blyk issued a brief statement claiming “steep growth” in user uptake during 2011, as well as lauding its services’ impact on churn.
The company — which works with both of EE’s Orange UK and T-Mobile UK arms, as well as Maxis Communications’ Aircel business in India, and Vodafone Netherlands — said its total base grew from one million to four million during the twelve months. It also claimed to be aiding customer retention, saying that Orange UK had seen a “35% improvement in its brand perception with customers” that receive the companies’ Bright Stuff- and Shots-branded interactive mobile advertising service, albeit without going into more detail on how this had been measured (or achieved).
Eric Kip, Chief Executive (CEO) of Blyk, declined to split out its overall subscriber numbers for Deutsche Telekomwatch, but said the “vast majority” of the four million users had been built up through the company’s engagements with EE and Aircel (Orange UK’s Shots service had around 1.2 million users in September 2011, according to a report in Mobile Marketing magazine at the time).
Blyk formed the partnership with Orange UK in 2009, succeeding a defunct mobile virtual network operator (MVNO) relationship with the OpCo, which foundered on the pressures of running a wholesale, advertising-funded mobile service.
Shots was then launched in early-2010, delivering targeted, SMS and MMS messaging-based “media” (including “branded content” and, more recently, mobile coupons) to customers, based on user input with regard to their interests, and the firm’s profiling software (Deutsche Telekomwatch, #4). In December 2011, EE extended the partnership to T-Mobile UK, launching a Blyk-supported You Choose offering (Deutsche Telekomwatch, #6), but again Kip declined to detail the consumer response. He did, however, rule out a return to the MVNO model.
“ [MVNO is] investment-heavy, that’s one [reason]. Secondly, we can clearly see that the operators are much more interested in teaming up with us in a partnership, to work on their customer base, and that, to us, is also more appealing [in light of] where we are today and how we can… deliver our business. If you look at the MVNO [model] then you’re [adding] one extra leg to your business, which is the hard-core telco business, and we’ve said that we’re going to completely focus on [the] two legs that we have right now — one is media and the other one advertising sales. And I think we have our hands full. ”
– Kip.
No ‘Group’ relationship
The company’s operator deals have been single-market relationships so far — a strategy Kip says is down to Blyk’s desire for partners that “really suit our proposition best”.
“ If you talk about a Group, an operator may have a completely different position or a different challenge in one country versus the other. Therefore, we are looking at what is best for the operator, what’s best for us, and now we can get the best partners on board, so that’s how we’ve done it so far. ”
– Kip.
Partnership tweaked; more segmentation
Originally, the Orange UK-Blyk partnership was billed in the media as one that would see close integration between it and the OpCo’s ad sales teams, but Kip said the company acts independently in approaching media buyers.
“ Blyk are now the exclusive sales partner of Orange and T-Mobile… We have an independent sales team that represent EE in the market, but we are independent. We work with the big media agencies to drive revenue through the service. We also have a partner network that represents Blyk in the market for niche segments: education being one. ”
– Kip.
He also said the company no longer works with Unanimis, the online ad network bought by Orange in 2009, and which set out to incorporate Blyk’s services into its line-up when Shots was debuted.
“ [With] Unanimis, we had the partnership — yes, they were also selling [our inventory], but at the moment they don’t any more. One of the reasons is that they wanted to focus more on the mobile internet and we offered to just focus on the messaging. So there was a partnership, but that now has separated. ” – Kip.
Messaging and web competition extending to ads
Alongside this separation with Unanimis, Kip sought to draw a broader line between messaging and mobile web ad sales, saying that the way to sell each service is “so completely different”.
“ We’ve experienced already a couple of times that people say ‘Well, we can start selling messaging next to our online or mobile internet offer’, and then it shows that it’s such a different game. It needs a different approach, a different way of selling. The proof has been, so far, that whenever we take it on board ourselves the results are better than if done in an environment where mobile internet is also available.”
– Kip.
This appears to echo sentiments expressed by multinational value-added service providers, like OnMobile and RealNetworks, which are adamant that far superior results are achieved for mobile network operator clients when vendors play an active role in marketing and operating services, including locating staff in-country. Kip denied that pressure on operators’ messaging revenue from over-the-top, web-based rivals forms a threat to Blyk’s business model.
“ It’s a very interesting question, [and] I get it asked quite a bit. If you look at it from a customer perspective: there, you may say that… apps like WhatsApp are a threat to the business, and we’ve seen it, of course, with KPN [in the Netherlands] who was even claiming that WhatsApp had done a lot of harm to their business [Deutsche Telekomwatch, #2 and #3]. ”
“ If we look at it from our side, then the usage of messaging will remain just as effective as it is right now. The feature will always be there. Let’s assume that the usage of messaging will go down, then the number of messages coming in will also decline and therefore every single message coming in will be an even bigger surprise than it may be today. ”
– Kip.
[Further reference: Vodafonewatch, passim; Market Mettle interview with Eric Kip, Chief Executive of Blyk, January 2012; Blyk Media grows to 4 million opt-in subscribers globally -- Blyk, 19 January 2012.]
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