Pajama Entrepreneur

I have written in the past about Blyk, a mobile virtual network operator in the UK, that offers free mobile phone calls to 16-24 year olds in exchange for receiving ads via SMS or MMS. According to this article in the The Times:

The response rate to Blyk’s advertising campaigns, which take the form of text and picture messages, is, it says, 29 per cent. That is more than double the typical response rate to direct marketing and a figure that independent analysts say is extraordinarily high.

Many people are skeptical about the free-calls-for-ads business model since it hasn’t worked in the past. Blyk, however, targets a particular demographic, young people, and they are focusing only on the UK (for now). I can only think of similar free-WiFi-for-ads models such as MetroFi’s and EarthLink’s. EarthLink pulled out of the metro Wi-Fi business and MetroFi wants cities to become anchor tenants; it seems they have abandoned their original business model which had 2 elements: (a) free WiFi with ads; and (b) WiFi with no ads, but pay a fee.

For a Wi-Fi service provider to succeed on the ad model, it needs a lot of people using the service and the “right” people, i.e. the users that the advertisers on the network are seeking to reach. There are a few ad-serving companies targeting ISPs that have launched recently: NebuAd, JiWire (although they’re not a startup, they launched their targeted ad serving business last year), and others.

Nonetheless, I think it is great that people are experimenting with different ways of delivering wireless services to people.