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Summary:

Free cell phone service in exchange for ads — that’s the pitch of a new London-based MVNO Blyk that plans to launch service in the Summer. We’ve heard variations of this idea before, including the bizarre Xero Mobile, but Blyk seems like it is getting off […]

Free cell phone service in exchange for ads — that’s the pitch of a new London-based MVNO Blyk that plans to launch service in the Summer. We’ve heard variations of this idea before, including the bizarre Xero Mobile, but Blyk seems like it is getting off to a better start. The startup said today that Orange will be the company’s MVNO carrier partner, and Nokia Siemens Networks will provide backend services.

If the free ad-based mobile service manages to strike a chord with customers in the U.K., the company will have helped pioneer the ad-supported business model into the mobile carrier business. It’s already announced several brands like Coca-Cola, L’Oreal Paris and Buena Vista that will use the ad network when it launches. Google’s own CEO Eric Schmidt thinks that cell phones themselves could someday be free based on the ad model.

Carriers, media brands and content companies are all betting that mobile ads will grow into a substantial market over the next few years. Informa Telecoms and Media predicts mobile advertising will grow to around $11.3 billion by 2011.

While the idea of an ad-supported mobile operators does sound like a boom-time idea, many are convinced that the web-advertising model can be ported to the mobile world. (We think of it as telecos’ getting Google envy!)

At CTIA, the mobile convention last month, mobile ads were in almost every execs speech, including EMI CEO Eric Nicoli, who pointed to the company’s trial mobile video ad service with Rhythym NewMedia. Nicoli said 80% of users said ads were positive or did not take away from the experience.

With large companies chanting mobile advertising at every chance they get, it is hardly a surprise that investors are placing megamillion dollar bets on start-ups. Blyk is backed by private investors and Sofinnova Partners. Mobile ad startup AdMob took the CTIA opp to announce it had raised $15 million in fresh funding. Internet companies Yahoo and Google are trying to place their chips in the mobile advertising game, too. Yahoo announced at CTIA that it was expanding its mobile ad services.

If Blyk’s venture succeeds, it will be important to set consumer’s ideas about mobile advertising. It’s the dichotomy of free (or subsidized) service with ads, vs. paid without ads. The key being that consumers will likely balk if they are asked to pay twice, once through ads and again through a significant service fee.

  1. In 1999 it was free internet access and free computers in return for being overrun with ads. In 2007 it is mobile phone service.

    We’ve officially hit another bubble folks!

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  2. [...] the world that it is not flatfooted, firing off press releases by the dozen it seems. Yesterday they announced a deal with ad-supported MVNO, Blyck. Today NSN is saying that they will be building a nationwide [...]

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  3. Blyk will never have enough advertising to finance the calls, altough they will be probably cheap VoIP calls.

    The young people who need such a service are not attractive to the advertising industry. If they don’t even have money for cell phone calls why should they be able to buy the advertised products?

    Also they are smart enough to avoid the ads. Like they go to the bathroom when an advertising interrupts their favourite TV show they will find a similar solution for Blyk.

    Soon the advertisers will realize that Blyk’s calls don’t bring them enough clients. That’s what happened already in 1999 with free internet access and free computers in return for being overrun with ads.

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  4. [...] > Can Blyk, the U.K.-based ad-supported MVNO make it? Article [...]

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  5. [...] that than the launch of ad-supported phone services. In UK, Blyk, an ad-supported mobile service we wrote about eons ago launched. Given the high tariffs in Europe they might have a prayer of a chance, but don’t [...]

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  6. [...] that than the launch of ad-supported phone services. In UK, Blyk, an ad-supported mobile service we wrote about eons ago launched. Given the high tariffs in Europe they might have a prayer of a chance, but don’t [...]

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  7. [...] foarte bine ce zic ei. Pe aceeasi directie, legat de Nokia, asteptam sa vedem cum va merge primul MVNO bazat numai pe reclame. Posted in din telecom [...]

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  8. [...] Adnetworks de mobile aún no hay. Muchos de los actores de la industria cuando les pregunto por Blyck, todavía no la conocen. Los mobile mondays quizás ayuden a que siga creciendo. Para mi gusto, [...]

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