Blyk And Xtract Promote Advertising
Despite the difficult times, Blyk and Xtract are promoting advertising (at least in a sense) as a revenue model. Blyk's business model is built around advertising as a source of revenue. Blyk confirmed they are going full steam ahead with internationalisation in a recent blog post about entering the Dutch markets in the first quarter of 2009.
In the blog post Blyk refers to an IAB research which states that consumers are sceptical about receiving ads on their mobile but become strongly willing to accept ads on their mobiles when they are incentified. Furthermore the willingness is increased by relevant ads. Something that shouldn't really be all too shocking when you use common sense.
This thinking is confirmed by Xtract in their most recent white paper titled Brands Need People and People Need Brands. Xtract argues that when ads are positioned correctly at the right touch points - they work, and people actually want to see them.
The problem with business models based on advertising usually is that the companies don't understand the difficulties the advertisers face. In SIME Helsinki, organised in September, I had multiple talks with advertisers that all these new innovative startups don't really understand the needs of the advertiser and thus only bringing about banner advertising - is not very appealing. What do you think, are the advertisers up tight or is their discontent acceptable?
Photo by trialsanderrors (CC:BY).
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It also goes the other way - The advertisers not understanding the possibilities of new (or even old:) technologies. And when they start to get it, they get it wrong.
Advertising in mobile should be about strengthening the existing customer dialogue, and not that much about reaching into new customers.
I agree with Karri here, the new age of marketing is not based on carefull calculation and tightly controlled messages and end-results, but rather on dialogue - which we know can go both ways. That is to say that the ad is either well received or badly received. In the example of Blyk, an advertiser might find that the youth loathed his adverts, or that his brand image was not what they thought it would be. Is this bad for advertisers? No, it allows them to learn (and if they do; and tweak it and make it better, maybe even earn ;) what the consumer really thinks. can you do that with focus groups? Yes, but nowhere near to that scale of reach that these new medias are offering, and usually at a fraction of the cost. Technological inertia has always been the window of opportunity in both the advertising world and media, so let the new brooms (and fearless advertising agencies) sweep the market, they will do good given time :)
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