Blyk launched their youth-oriented, ad-funded MVNO into the UK market just over a year ago with much fanfare. Since then it has generated a lot of discussion in the industry about the viability and potential success of the “Blyk Model”.

As a year has now passed, we took the opportunity to talk with Shaun Gregory, CEO of Blyk UK, to hear about their first year of operation, what they’ve learned, and to get some insight into the new products that Blyk is working on.

When Blyk was first launched, it caused a lot of commotion in both the mobile and the advertising industries. Founded by Pekka Ala-Pietilä (ex-President of Nokia) and Antti Öhrling (co-founder of global agency Contra Advertising), it seemed a great mix of mobile expertise and marketing communications expertise. For more about the concept and design of Blyk, read the MobAD interview with Marko Ahtisaari.

The Member Base
One year later, the numbers are looking good for Blyk. Their publicly stated first year target for the UK was 100,000 “members”, but they actually attracted more than twice that number during the year.

Shaun comments, “I think the real story is not just the number we’ve grown to, but more importantly how we’ve grown. With Blyk, the growth of the member base has been driven predominantly by word of mouth. Six out of 10 members on the network are there because they heard about it from a friend. And our ‘Net Promoter‘ score is great, much higher than most mobile operators and social networks.”

The Advertising
In the early days, Blyk was reporting response rates in the high-20% range, and many wondered if this mostly due to the novelty of the service. Now, having run over 2,000 campaigns, typical response rates are still in the mid-20% range. “It’s holding up better than we ever imagined, and certainly better then when we first forecast the business,” Shaun adds.

Another key question was which sectors would be most successful on the Blyk network. Shaun responded “It’s very broad base, but the basic shape of the advertising sectors on Blyk mirrors what you would expect for a youth audience. For example, music and entertainment are really strong. I would say that we are in line with most youth media opportunities.”

“Equally there are some developing sectors – such as retail. We did some phenomenal campaigns for House of Fraser, which were very targeted by city, very local activity built around stores.” A full writeup on the House of Fraser campaign will be posted next week.

2,000 Campaigns
Having run over 2,000 campaigns in the past year, there are a lot of examples to talk about. Blyk has been especially good about sharing campaign examples and results. “Whenever we enter a new sector or do something really interesting we put the case study on line.”

One of Shaun’s favorite campaigns was run by SKY to promote the a recent Ricky Hatton fight. “The reason I like the Sky campaign is that it shows the power of the question. You’re targeting people interested in sport, and you target them at a specific time of the evening just before the fight. It’s super targeted.” The campaign shown below was sent to selected members at 9pm on the evening of the fight.

And here is the animated MMS video that was sent out with the initial message.

For a good example of a campaign in the very important Music & Entertainment sector, see full details on the Dizzee Rascal campaign.

Blyk Direct Marketing
Not only have the product categories evolved, but during the year Blyk’s advertising offer has grown as well. Shaun explains, “When you’re zigging and everyone else in the industry is zagging, you need to think long and hard about the advertising products you offer.”

Originally all Blyk ads were priced on a per message basis – every time a message went out to a member or the member responded, the brand paid a fee. However, Blyk has recently added a more “direct marketing” approach as well.

“In response to what the ad community has been asking us for, we have developed a number of direct response mechanisms. For example, we have a product where a brand could super-target a range for members in our member base, and then ask them if they are interested in a some specific subject or product. The advertiser would only pay for the interested audiences.” Essentially this is a PPC option for advertisers.

Market Research
Another recent innovation from Blyk is a research product to take advantage of their ability to communicate with the hard to reach 16 to 24 year old segment.

“At Blyk, we have over 200,000 members, all profiled, all opted-in and fully engaged. So you’ve got the opportunity to research brands or products or services with a very influential and impactful audience.”

As an example, Blyk recently ran a test for a TV ad campaign to get feedback before the campaign went national. The ad was sent out via MMS, and then members were asked to send in their opinion of the ad by SMS. Blyk received responses from 14% of the members targeted. A second part of the study involved asking members if they had seen the ad on TV, and then sending it to them if they had not. Interestingly, a much higher percentage of this group – 34% – eventually sent back their comments on the ad.

Another interesting example of this research capability was a survey that Blyk ran for the Department of Children, to understand how teenagers spent their time. Full details on the Department of Children survey will be posted soon .

The Second Year
Moving forward, the next big area for Blyk is a content service called On Blyk. This is scheduled to launch in 2009 in partnership with mobile marketing platform company Velti. “What we are doing is launching the first content strategy that is underpinned by messaging,” says Shaun. “In Blyk we have fully profiled users, and we’ll be combining that with messaging to make an intelligent content proposition.”

Rather than requiring a member to surf the mobile internet to search for content they might like, Blyk will use the profile information they have to send targeted messages about content to their members. According to Alex Moukas, CEO of Velti, “The more a Blyk member uses the content portal, the more insight we have to work with. This means we can provide more targeted and valuable content as the relationship grows.”

Blyk will work with several content partners for this service, and the content offer may include music, games, videos.

Also during the coming year, we can expect to see Blyk expanding into additional markets. Already they have announced plans for Belgium, Netherlands, Germany and Spain. Beyond that, look for Blyk to enter further markets using more of a partnership model, utilizing some local infrastructure combined with Blyk’s know how. Blyk has apparently been “inundated” with partnership requests, and sees this as a means to rapid growth but with lower investment requirements.

Overall, it seems that things have gone very well for Blyk during their first year of live operations – rapidly growing and satisfied user base, an expanding array of advertising products, and opportunities for rapid expansion into new markets. Given the current economic climate I’m sure there will be challenges to come, but it looks like the “Blyk Model” is proving to be a winning formula.

Next week, we will cover two additional Blyk campaigns:
• House of Fraser – Relaunching Retail Stores, and
• Department of Children – A Survey on “What do teenagers do with their free time?”

Stayed tuned!

Links to other Blyk campaigns covered in MobiAD News: