Blyk concept validation, if clone can make big success out of it, then..

We love the Blyk concept here at Communities Dominate for many reasons. And we were quite interested to learn of the first Blyk clone, Tomato Plus out of Croatia, which we reported on last year. Now our friend Russell Buckley at MobHappy has been giving an update on Tomato Plus, via their tech developer Out There Media.

First, Tomato Plus (on the Vipnet network in Croatia) is not limited to the 18-24 age bracket like Blyk, so they also undertstandably have attracted a wider age range in their users. Similar to Blyk the users agree to receive 6 mobile ads per day and they receive somewhat a smaller set of free traffic, 50 minutes of free calls and 50 free SMS text messages per month. The ads arrive as SMS or MMS messages.

So first, are the general all-age consumers in Croatia happy with this concept (as Blyk youth age consumers are in the UK)? Does this concept have end-user appeal. Yes yes yes. 92% of their users are happy. This concept is VERY strongly validated.

Secondly, do the advertisers get utility out of it? We don't have actual total response rates (Blyk after 18 months reports 25% average response rates to their customer base of 200,000 youth - an enormously powerful response rate; the internet gets response rates at one tenth of that rate, or worse). Out There Media (via MobHappy) says they get better response rates than Blyk and their range goes up to 75%.

So, secondly, is the Blyk concept independently validated for advertisers? If Tomato Plus gets "better than Blyk rates" and those are even only 26%, then YES, Blyk is validated. How much better than Blyk? is it 32% or 45% or 56% who knows. Lets monitor Tomato Plus and Out There Media to find out. Obviously it is not at or near 75% if they themselves say this is the peak. But yes, if Tomato Plus reports higher than Blyk rates, then yes, they are definitely a great success to the advertisers.

While interactive advertising response rates are an important metric, the by far more valuable finding is to isolate and identify a conversion rate. Actual delivered business, real purchases, made based on a distinct advertising campaign. Conversion rates are inherently less than response rates. We click on the link, we even take the coupon with the intention of making a purchase; but how many actually show up at the store to complete the transaction. Tomato Plus reports on a McDonald's campaign in Croatia that delivered a 12 % conversion rate !!!!!  One in eight who received the ad, showed up at McDonald's to redeem the coupon !  Think about it. Tomato plus gives you free minute and text messages. The ads are so good that you don't think they are bothering you, and then one in eight use one of the ads for a further discount at a fast food restaurant. This is total win-win.

And this is obviously prior to the added benefits of mobile as the 7th mass media, which gives far more accurate audience measurements (the 6th unique beneifit of mobile compared to legacy mass media including the internet) and that only moile can caputure the social context of our consumption (the 7th unique benefit).

So someone has to lose? If the end-customer gets 50 free minutes and 50 free text messages per month, and the advertiser gets high response rates and more than that, double digit level conversion rates, then someone has to pay. There is no free lunch. Who loses? The mobile operator has to be the loser as they are the only one left in this system. Logic dictates that this has to cost Vipnet.

Think again! Studies after studies of mobile teleoms have proven, that incentives to increase telecoms traffic, whether voice minutes, SMS text messages or MMS picture messages - always result in MORE traffic. Think about it. If you have a relative who recently lost a job due to the bad economy, and is now living very cautiously in a low budget household. And that relative gets suddenly 50 free minutes and 50 free texts. That person will use some of those free minutes to connect with you. Because the person wanted to connect with you but was restricted do to a low budget. Now, what happens. You receive a txt message - odds are that you send a response. Your relative's message was free - but yours was NOT. You had not thought of sending a text message to that relative today. Because of the free message given to the relative, YOU generated an extra message and extra revenue (and extra profit) to the mobile operator that your phone is on. If that is Vipnet, they get direct billable revenue from you. If it on another network, then Vipnet gets an interconnect (wholesale) compensation from the other operato. Either way, they get paid !

Same about voice calls. Your relative wanted to call you and only because of the free calls is able to call. But you know the relative is in rough economic state, you may well ask the relative to end the call, and you call back, so that the call is put on your phone bill. We all do this, we know there are those among our close friends or relatives who dont' have the funds to pay for a long call, but we don't mind and are delighted to have the call, and dont' want it to be a financial burden to our friend or relative. Or say the relative calls you but you are unable to take the call. It goes to voice mail. Now you can see from your phone that it was your relative who usually doesn't call, who called. You'll call back at the nearest opportunity. Again, we shift the paid conversation to the other party.

This pattern is universal in mobile networks. Any kinds of promotions, from the sudden un-announced free texting day to the "everyone deserves to be a millionaire" campaign they ran in Switzerland a few yars ago when an operator gave all of its customers a milloin SMS text messages for one month (nobody was able to redeem all of them) to the one month of free MMS etc type of promotions. Every one of these when measured over time, shows a raised level of traffic after the promotion, and a sustained higher level of traffic, generating more revenue and more profit.

So how is Vipnet doing? Conventional wisdom suggests that giving the customers free minutes and messages will cut into their monthly revenues and their profits (to sustain the middle-man). but no. Mobile is the Magical Money-Making Machine! Magical. Vipnet the mobile operator host of Tomato Plus, reports a higher ARPU (average revenue per user). And when ARPU goes up relating to voice minutes or SMS text messages, that means higher profits too. SMS is the most profitable mass-market service in the economic history of mankind. Voice telecoms traffic itself has a global average EBITDA margin (gross profit margin) of 35%.

Win-win-WIN !!!! All of the players win with Tomato Plus in Croatia. Cool. Yes, if you had any doubts about Blyk, this independent copy-cat case study from Croatia is a very valid independent concept validation. The Blyk model (and/or the Tomato Plus model) does work. Expect many more copycats..

And is it just me? While the rest of the world is crashing and burning, big banks busting, car giants crashing, tens of thousands laid off from one industry to the next; yet the stories here at Communities Dominate Brands are increasingly POSITIVE on revenue and profit SUCCESS that is here with the advanced services around mobile? I get the feeling that the message is not going through? Hello Hello? This industry is GENERATING success. COMMERCIAL success. Look at the past few weeks - just at this blog we've discussed the NUMBERS of the enormous financial SUCCESS of Habbo Hotel, NTT DoCoMo, GrameenPhone, Flirtomatic, Cyworld, SeeMeTV. Meanwhile at my parallel 7thmassmedia.com blog, I've also added analysis of AQA Any Qustion Answered, M-Pesa and Sofia's Diary. Just these 9 services cover a global footprint, on 6 countries across 3 continents (7 countries if we add Tomato Plus and Croatia). This industry is THRIVING with success, about the only bit of bad news is Motorola, ha-ha, and even that has the chance of recovery, if they go to the true roots of mobile success (SMS text messaging) rather than pretending to be an internet player with an Android smartphone based strategy. 

Now, if you want to study Blyk quickly and get the stats and details and finer points, pick up my ebook Tomi Ahonen Pearls vol 1: Mobile Advertising which has 50 case studies on moble advertising excellence from 19 countries. It has 2 of its Pearls focusing on Blyk and uses 9.5 pages out of the 171 of the eBook on Blyk. For 9.99 Euros it is by far the deepest analysis of Blyk that you can get in one place for such a low cost, ha-ha. If Tomato Plus can turn that idea into a win-win-win in Croatia, YOU can do it in your market..

Comments

[Jonathan MacDonald]

Great post Tomi!

I am meeting up with the woman behind this service in an hour to congratulate them on their success!

The more examples of engagement marketing we have, the more companies will see the inherent, underlying value - as you say, win+win+win.

[Tomi Ahonen]

Hi Jmac,

Cool, give my very best to them, and if you do get any more numbers or user comments etc, let us know.

And yes, the more we find the evidence and success, the better it is for all.

Tomi :-)