An Ad-Supported Mobile Plan Launches in the U.K.

The world’s first mobile phone network funded entirely by advertising was launched yesterday. U.K.-based Blyk will offer 16- to 24-year-olds free text messages and minutes in return for receiving advertisements on their mobile handsets.

The MVNO (define) will enable marketers to target their ads to specific groups of users, thanks to profile information provided by members themselves.

Jonathan MacDonald, head of U.K. sales, told ClickZ, “For brands, Blyk provides direct access to the 16- to 24-year-old market and enables them to create awareness, build relationships and drive sales to this hard to reach audience”.

In order to qualify for free call time and messages, members agree on sign-up to receive up to six advertisements a day, predominantly in the form of SMS and MMS messages. Users are under no obligation to respond to the ads, and do not sign a contract for the service.

Blyk claims the network will provide complete advertising transparency and guaranteed ROI. Although individual user profile information is shielded from advertisers, the service will allow them to target specific market segments, based on the users’ own expressed interests.

“If a member has expressed an interest in video games for example, advertisers could then use this information to inform them of new releases, or perhaps offer discount coupons,” said MacDonald.

It remains to be seen whether Blyk can strike a workable balance between advertising and free services. The current plan offers 217 texts and 43 minutes of talk-time a month, and MacDonald claims that this is in excess of what three quarters of consumers in its demographic use in a month.

“Users will receive an absolute maximum of six messages a day, but it is likely to be less.” he stated. “Our trials indicated that tolerance was not a problem, as long as the adverts were relevant to the user. The service links young people with the brands they like. Young people want to hear about the latest films or music releases. A large proportion of users actually claimed that they missed the service when the trial ended, and did not want to go back to paying for their calls or text messages.”

Thomas Husson, senior analyst for European mobile at Jupiter Research said, “It’s a good model and a decent free offering, but it’s difficult to see if it will be successful yet. It really depends on how clever they are with their ads, and if the members actually want to engage with the brands because of them.”

The concept of ad funded mobile networks is not a new one. Virgin Mobile launched a similar service last year, with users earning minutes by watching online flash advertisements and responding to customer surveys. A number of advertising agencies are experimenting with mobile advertising, with WPP, Aegis and Publicis Groupe all investing in, or acquiring mobile advertising firms recently.

The service itself will be marketed primarily through the use of viral invitations, passed on by existing users. New users can gain access to the service in a number of ways, for example through signing up for sponsored events, or through literature in university student packs.

Blyk is now live in the U.K., with other European markets to follow.