Techno Finn chases mobile youth

Blyk co-founder Antti Ohrling talks to Kim Benjamin about the idea behind his free mobile service for young people and explains why the business model is different from other mobile marketers.

Blyk co-founder Antti Ohrling
Blyk co-founder Antti Ohrling

Antti Ohrling's interest in all things mobile goes back almost a decade, when he was a founding member of the Mobile Marketing Association in the US at the tail end of the 1990s.

It hasn't taken him quite as long, however, to launch a business in the mobile space. Together with Pekka Ala-Pietila, the former president of Nokia, Ohrling founded Blyk in 2005 and the service was rolled out in the UK just under a year ago.

Blyk's premise - a free mobile service for 16 to 24-year-olds run across the Orange network - sounds like every parent's dream. The catch? In order to take advantage of the 217 free texts and 43 voice minutes a month, users (dubbed "members" by Blyk) have to opt in to receive up to six ads per day on their phone, which are delivered via SMS, MMS or picture messaging.

The ads are targeted based on data compiled from likes and dislikes detailed by users at the registration process. All responses and user interaction are tracked for advertisers, while Blyk generates its revenues from the ads.

"I was puzzled by the fact that mobile marketing was not really going anywhere," explains Finnish-born Ohrling. "Other media such as television, the press and the internet can be accessed for free as they are supported by advertising, but there was no equivalent for mobile."

Natural choice
Having made London his home for the past 10 years, Ohrling says the UK was the natural choice for launching the service, with its high levels of mobile penetration and significant growth in digital marketing.

Blyk's headquarters are also based in central London, with a smaller office in Helsinki.

Appropriately enough for a brand targeting the youth market, the office is lively, buzzing with 50-plus employees, and the logos decorating the walls have been designed by Blyk's members.

The business model is a simple enough concept, but it's one that other major networks such as Vodafone and Orange have tried and struggled to make work, generating only minimal revenues. So what makes Blyk different?

Ohrling does not deny that the youth market is one of the hardest to crack and that the mobile medium is becoming increasing price-sensitive, leading to low levels of customer loyalty. But he believes that 16 to 24-year-olds are perfectly placed to understand and benefit from Blyk's model. "They don't perceive the messages to be advertising, but see it more as part of a service," he says. "They value something for free if it's relevant."

Financial backers certainly have faith in the business, with funding from a consortium of private investors and venture capitalists, among them French-based Sofinnova Partners and, most recently, Goldman Sachs.

Ohrling remains tight-lipped about exactly how much has been invested in the business, but Blyk boasts impressive subscriber figures so far.

Customer acquisition is based on an invitation-only process, either via existing members or through promotions at events designed for the target audience, such as concerts. In its first year, Blyk aimed to recruit 100,000 members, but it achieved this target six months ahead of schedule and now has more than more than 150,000 users signed up to the service.

The majority of revenues are funded by advertising, but a small percentage come from top-up charges - once users have exhausted the free text and talk time, they can top up for 10 pence a text or 15 pence a minute.

Blyk has launched more than 1,000 campaigns from brands such as Boots, Lucozade and NatWest, and Ohrling claims these have a 29% rate of user interaction.

One of Blyk's most successful campaigns to date was run in conjunction with Penguin Books, to promote the launch of Nick Hornby's novel, Slam. Seven out of 10 members engaged with the advertising and 51% downloaded an audio clip to their phones.

Different model
Ohrling is keen to stress that Blyk's service is different from that of existing mobile network operators. "The price of mobile phone calls and texts is coming down all the time, so a different model is necessary to compete in this market," he maintains.

"We have an additional revenue stream from advertising and our user profiles mean we can offer members targeted and personalised content, delivering a much richer media tool. Mobile is a ruthless medium - we know within a couple of hours whether a campaign has worked or not."

However, not every user has been converted. According to Ohrling, a handful of users delete the messages and have never responded, while figures to April show that just under 100 users have abandoned the service altogether. Still, this appears to be a minor blip in Blyk's aim to redefine the mobile marketing medium and, as Ohrling puts it: "If users are unhappy with the service, they can go elsewhere."

While Blyk is not an entirely new concept - competitors exist in the US and in the Philippines - there is plenty of scope for expansion into Europe, an area already earmarked by Ohrling.

The service will launch in the Netherlands later this year and in Belgium, Spain and Germany in 2009. While such plans may seem ambitious, Ohrling is exercising a more cautious approach towards mobile technology.

"We will be pushing new mobile technologies when the market is ready and when the audience size makes sense," he says. "We will always put user behaviour before technology."

2005: Co-founder, Blyk
1994: Founder and chairman, Contra Group
1990: Managing director, film and TV division WSOY
1987: Senior vice-president, magazine publishing group Yhtyneet Kuvalehdet
1984: Sales director, retail chain Rautakirja

Music (playing and composing), winter sports, jogging, golf and cooking
Football club: Liverpool
Car: Lexus Hybrid
Mobile phone: Nokia N95.

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