Media News

Orange partners with Blyk for mobile ads in UK

* Mobile ads to be offered to Orange UK customers

* Blyk gives up standalone virtual operator ambitions

* More partnerships to come after Netherlands deal last week

LONDON, July 27 (Reuters) - Mobile operator Orange plans to be the first to bring advertising to handsets on a mass scale by partnering in Britain with Finnish mobile-advertising specialist Blyk, which will give up running its own service.

Orange, a subsidiary of France Telecom FTE.PA, said on Monday it would offer special tariffs to any of its 16 million British customers willing to accept targeted ads via SMS and MMS text and picture messages.

It will not automatically inherit Blyk’s 200,000 British members, who will be free to go where they please.

Marc Overton, in charge of Orange UK’s wholesale, business development and partnerships, told Reuters that Blyk’s expertise would enable Orange to send ads to customers’ phones without alienating them, which has been a key challenge for operators.

Advertisers have long seen the appeal of mobile advertising, with the personal nature of the handset and the potential to know where it is at any time -- but have been held back by the small screen size and potential hostility from customers.

Blyk's model was built on inviting 16 to 24-year-olds to sign up to receive a maximum of six advertising messages a day from brands such as Coca-Cola KO.N or l'Oreal OREP.PA in exchange for free texts and call minutes.

Blyk customers had a measure of choice as to which advertising they received, and the company said its research showed that they largely welcomed the messages, which they regarded more as information or entertainment than advertising.

“There has been a lot of talk in recent years about mobile advertising,” Overton said in a telephone interview. “This is a very much more targeted, intimate method. You’re actually having a conversation with your customer.”

Overton said Orange aimed to bring mobile advertising to a broader customer base than the youth market in which Blyk had proved its model -- although the two-year-old business was not yet profitable.

Blyk’s co-founder and Chief Executive Pekka Ala-Pietila said working in partnership with operators rather than being a carrier itself would make it faster to market and allow it to concentrate on its core competencies.

Blyk had originally planned to launch more of its own services in the Netherlands, Germany, Spain and Belgium.

“The aim with our partnership strategy is to roll it out faster in every single market, so that we can have even greater audiences by size and roll out in multiple countries,” he told Reuters by phone.

Blyk also announced last week a partnership with Vodafone VOD.L in the Netherlands, and Ala-Pietila said the company was talking to operators in other countries in Europe and Asia. (Reporting by Georgina Prodhan; Editing by Rupert Winchester)