Blyk launches ad-based mobile network

Blyk, the mobile virtual network operator offering free phone call minutes and messaging in return for sending customers advertising, launches in the UK today. Renting airtime from France Télécom’s Orange network and targeting only 16-to 24-year-olds, the network will target the ads based on a detailed profile customers will fill out on their website. It’s ironic timing. MySpace is today announcing an ad-supported mobile version of its site to get on the new mobile advertising bandwagon.

As I wrote earlier this month, the Blyk launch is timed for the start of the new school term in the UK. It’s a smart move but it’s not surprising. Blyk has a very experienced team, headed by backer former Nokia president Pekka Ala-Pietila and Antti Öhrling, a branding veteran.

Blyk is giving itself 3-4 months to make an impact on the highly competitive but mobile-obsessed UK market and will use real-time feedback on what “the kids” are doing to help brands with the targetting process. To make sure the audience is the right one, only 16-to 24-year-olds will be allowed on it, with cross-checks for age in place. Advertisers, including Buena Vista, Coca-Cola, I-play Mobile Gaming, L’Oreal Paris, StepStone and Yell have already confirmed that they will be among the first advertisers.

Blyk isn’t selling handsets, it’s sending out SIM cards, so customers will need an unlocked phone capable of MMS. Every month, Blyk users will get 217 free texts and 43 voice-call minutes as standard, on condition they opt in to receive up to six ads to their phone a day. It’ll cost 99p per megabyte to browse mobile sites.

Meanwhile the MySpace news coming out of Fox Interactive Media is just part of their overall plans to roll out mobile versions and start picking up ad revenues., the gaming site IGN, AskMen, Photobucket and its local TV affiliates will all have mobile versions in the coming months. Right now MySpace has subscription-based version of of the service with AT&T and Helio, but the new mobile sites will work on all US carriers.

The new mobile Fox sites will allow users to send and receive messages and friend requests, comment on pictures, post bulletins, update blogs, and find and search for friends. Initially, advertising will taker the form of sponsorships and banner ads, but the company says it plans to move into more targeted advertising based on registration data and local ads based on a user’s location via GPS.

The concept of using mobile advertising to subsidise calls and thus win market share is not new. Virgin Mobile in the US recently reported that 330,000 of its 4.8 million subscribers have agreed to view ads in exchange for free calling minutes. But basing an entire mobile service on this business model is to date untried, and it’s fairly obvious why. Mobile operators generate billions upon billions in voice and text revenues, yet mobile advertising is estimated to only generate $1 billion to $2 billion in revenues worldwide this year.
However, voice revenues are flat or falling (messaging never goes out of fashion, it must be noted) and the mobile ad market is expected to surge from from $5 billion to $11 billion within five years, generating much needed growth, says the IHT.

The UK market, in particular, is poised to get very, very busy in mobile advertising terms. Last week reports began to circulate based on a Guardian story that Google – a dead cert for a mobile ad play – was considering a move into the UK wireless market after the regulator Ofcom said it would auction off older 2G spectrum currently allocated to Vodafone and O2.