Blyk Offers Free Calls In Exchange For Ads

A new mobile service scheduled to be unveiled in the coming weeks is making headlines worldwide because of its unique concept whereby customers receive free calls and text messages in by accepting advertisement banners on their mobile phones.

While the service, Blyk, is being heralded as a revolutionary idea, the concept is actually a modernized version of an already established service. Virgin Mobile in the United States started a similar compromise last year, offering a designated amount of free calls in exchange for advertisement. But the introduction of Blyk is being regarded as an entirely different challenge because the European mobile industry is said to be more competitive and technologically sophisticated than in the United States. This translates into a more cut-throat race for advertising dollars overseas. (Source: nytimes.com)

The real question is whether or not mobile advertising is worth giving away free calls and text messages. It is estimated that the average mobile operator generates hundreds of billions of dollars from callers and text message users alone. Analysts estimate that mobile advertising will likely result in only about $1 billion to $2 billion in revenue this year. Using these numbers as a plausible gauge, mobile operators are set to lose billions of dollars with this exchange.

So why make the deal?

Industry observers are estimating that the mobile advertising market will eventually surge to anywhere from $5 billion to $11 billion annually in the next few years. Those companies who are quick to jump at these advertising opportunities while the concept is relatively new will likely reap the rewards once the industry booms. (Source: tuscaloosanews.com)

Another reason for the growing interest in the mobile advertising market is that many companies are expecting these elevated levels of incurred fees from callers and text message users to soon dwindle as consumers continue to find other carriers and services that cover their communication expenses. In many markets, the numbers are falling so rapidly that network operators are scrambling to find new sources of revenue.

Mobile advertising is a very real option for companies worried that their hundreds of billions of dollars will stop flooding in sometime down the road.

The mobile advertisement craze has sent the technological industry into an international frenzy. Google recently announced a system for sending ads to mobile web pages, similar to its AdSense online advertising program and just last month, Yahoo acquired Actionality. Actionality is a company based in Munich, Germany that specializes in inserting ads into mobile games and other forms of online entertainment. (Source: nytimes.com)

The sad part of the mobile advertising war is that the large companies like Google and Yahoo are viewing this challenge as a hobby, with no real repercussions should they lose out in the end. For the smaller start-ups, defeat in mobile advertising could result in the demise of their company.