Influencers in Future: “We don’t believe that organic rapid growth can last forever”

What are the changes waiting for the YouTube market? And what is the future of influencer marketing in general?

Mikhail Bychenok CEO mediacube || Photo by Alexey Rybalko, Office Life

More than 400 hours of content are uploaded to YouTube every minute, and 6 billion videos are watched every day. YouTube is the second most visited site in the world after Google. In some countries, YouTube has overtaken television in revenue, while leaving traditional media far behind in terms of content creation, new experimental formats, and capabilities.

Today it is an efficient fast-growing business that provides YouTube, creators, and partnership networks the opportunity to earn money. A partnership network, a group of unsung heroes who provide technical support to creators, help those on youtube monetize their content, protect their copyrights, and so on. In fact, partner networks are the copyright holders of video content and they allow creators to work more effectively and earn more.

How does the partner network business work? What challenges do companies face today? Can a partner network become a global company? And what is the future of influencer marketing in general?

We talked about all this with Mikhail Bychenok. Mikhail is the founder and CEO of mediacube, one of those partner networks. Mikhail’s company started working with YouTube in 2015. Today, mediacube works with creators from 68 countries. From a small startup, the company has grown into a sustainable business with a team of 150 people. In the last year alone, mediacube paid its partners $25 million. And recently, Mikhail launched a new product for those who work in influencer marketing. It took $300,000 to develop this new IT solution.

Mikhail Bychenok shares his thoughts:

– All the processes that are taking place in influencer marketing today can be compared to the atmosphere of the Wild West during the “gold rush”. There’s a lot of potential, a lot of money out there, yet the sphere itself is not fully regulated, and there is a lot of freedom. In short, today’s new media — and YouTube, an important part of this new media — is a fast-growing, global market. This is a market that is growing by at least 50% each year. Experts predict that in 2020, the influencer marketing will reach $9.7 billion. And mediacube is in the midst of these processes. This drive is very motivating.

I have always wanted to create something global, a company that would have the potential to develop something not only for the CIS countries, but also for the international market. Today, we are not only in the TOP 20 partner networks, but also work all over the world. If we talk about geography, most of the influencers we work with are creators from the CIS countries mainly, soon followed by Latin American creators.

Last month, the total number of views of our partners’ videos was 4 billion — it’s as if more than half of the world’s population watched us.

Mikhail Bychenok CEO mediacube || Photo by Alexey Rybalko, Office Life

Do you have restrictions on connecting to the network?

– Of course, we have some limitations. For example, we require channels to have more than 10,000 subscribers and their content to comply with YouTube’s rules. But if we believe in the product and the creator, and if the channel seems promising to us, we can connect it, even if the YouTuber does not have 10,000 subscribers.

Vlad A4, Artemiy Lebedev, Slava Komisarenko — these are the youtubers who joined us when they did not have the required number of subscribers. But we believed in them. We started working with them from scratch, helped them grow then and we still help them grow.

I often say that we do not take small channels, because, in fact, they do not need us. They can solve their problems on their own. We take channels with a large audience, because big channels are known to have big problems. And we, as a company can solve these very problems.

One of our tasks as a partnership network is to solve any technical issues. The average response time of our community managers is 30 minutes. Most of the technical problems, about 90% are problems that we can solve on our own, and the remaining 10% we solve with the help of YouTube office in London. They are also very helpful people, since they respond and solve problems within 24 hours. We had a case when YouTube blocked the channel “Pleasant Ildar” (the channel of the popular video creator Ildar Khabibullin with a 3.2 million audience. The channel is famous for its show “the Worst”), but our technical support managed to defend it, to prove that there were no violations of the platform’s policies. And the channel was quickly restored. If the channel had contacted YouTube support directly, it would have taken a very long time to get a response. But because we guarantee priority, our company works on the creator’s side and help solve their issues.

For example, we develop our own software, can change and build new business processes to give creators more money, and even help export their content to China.

How did a company from Belarus manage to break the mold and build its business on an international level?

– Usually partnership networks are developed using the principle of offline presence. They direct their efforts to create a friendly community by increasing human communication and interaction, spend large budgets on offline events, parties, hangouts, etc. That is, they promote themselves through the image of a bro-ducer. This is an attractive work model, but it has limits, because the offline presence is very limited geographically. And of course there are risks: first and foremost, they are related to the human factor. It is difficult to expand the staff of community managers and not lose the quality of service.

We work a little differently. In some sense we can’t be called a proper partnership network, as we are more involved in IT. We think of mediacube as an IT ecosystem and try to be high-tech. Mediacube can’t offer all creators cool parties, endless hangouts, and trendy shindigs, but we can offer services and products that will help youtubers earn more. Moreover, we have services that not only other networks, but also Google itself, cannot offer to content creators.

Perhaps, like most partnership networks, we would have developed offline communication. But we were lucky that, firstly, our office is in Minsk, and not in a large metropolis like Moscow, and secondly, we entered the market quite late, when the CIS countries already had their own leaders. And that forced us to look for other ways to be competitive. We had to be better, so we opted for creating a variety of IT products.

We strive to ensure that the creator after connecting to our network can go to their personal account and automatically get access to a large number of different services that will help make their channel better. If we’re talking about specific figures, large channels on average will have an increase of the revenue twice per year after connecting to our partnership network. I think this is a great result.

Mikhail Bychenok CEO mediacube || Photo by Alexey Rybalko, Office Life

So now you work as an IT company?

– Yes, we rely heavily on technology, we want to be global. Today only 50% of creators in our network are from the CIS countries, the rest are creators from different countries of the world: Latin America, India, Turkey, the USA, etc. And we are actively increasing our presence around the world. It is expensive, time-consuming, and inefficient to open an office in each new country of the world, organize master classes, training seminars, hangouts, and parties there. It is much more promising to invest this money in software development, and thus compete with companies from absolutely any country. And give creators what others can’t.

In addition, we understand that we need to grab our piece of the action in this fast-growing market. According to research, the market for partnership networks will grow from $3.8 billion in 2018 to $10 billion in 2025. In other words, the market will grow rapidly in the next 5 years, and we must use an expansive growth strategy, but at the same time be prepared for times when our sphere will slow down its growth.

The future cannot be fixed, and just like our sphere, partnership networks will change, as will their prospects. And we believe that the creation of new products will be a turning point in the market development. This is why we are developing primarily as an IT company.

Today we have several products in our bag of tricks that we provide to creators. For example, the express payments system. This is a kind of bank crediting but for creators. The product is built on factoring mechanics, where a YouTuber can use the money before it is actually received from Google. You can briefly describe express payments as follows: this is financial backing for creators at 3%.

We have a great product, Stats, a system that contains data on 35 million channels, thanks to which we can provide great analytics, successfully target advertising campaigns, etc.

We recently released a new Anton product that helps both marketers and creators with their issues. In general, influencer marketing is a complicated path. Most marketing specialists and business owners understand that this is the future of marketing.

Just think: in 2019, on average, for $1 invested in advertising from an influencer, the company received $5.7, and in some areas, even $18 of revenue. Few spheres can boast of such figures.

But at the same time, this is a completely baffling area for many: it is not clear how to search for a creator, how to evaluate efficiency, how to manage document flow, how to settle payment issues, there are no strict regulations, etc. An Influencer Marketing Hub study found that marketing experts find working with opinion leaders to be difficult and incomprehensible. 23% of them said that finding influencers and building communication with them is challenging, and 62% rated this task as “medium — difficult” or “difficult”. What does this mean? It means that we have a very promising market, yet most brands representatives do not know how to approach it.

Our new product Anton solves this very problem. It works as a base for searching for creators — AI engine searches more than 5 million YouTube channels. Anton simplifies document management, since the system itself generates an agreement based on the selected terms of the transaction, plus there is an electronic signature option. Finally, one of the most important features that eliminates one of the main problems for marketers and creators is the payment system. Factually speaking, our system allows the company to make a payment in a way that is convenient for them, and the influencer to get money in a way that is convenient for them. Now there are more than ten payment methods that work in almost all parts of the world. This includes PayPal, Payoneer, Wire Transfer, and bank card transfer. In other words, we offer a product where the very role of the partnership network is built differently. This is not manual management, but the creation of an IT ecosystem that solves the problems of both brands and creators. And most importantly, this ecosystem works globally. We don’t care what country the influencer is from or what language they speak, and it doesn’t even matter if they work with us as a partner or not. They can use our product even without being connected to the mediacube network.

Mikhail Bychenok CEO mediacube || Photo by Alexey Rybalko, Office Life

Why do you believe in this model more than the community model?

– As I said, we don’t believe that organic rapid growth can last forever. And today we are already thinking about what challenges we will face tomorrow. What can we offer that no other partnership network or YouTube itself can offer? Perhaps it is because from the very beginning we’ve been developing within a small Belarusian market that we had an urgent goal to expand outside the country’s barrier and enter other markets, markets that have been already occupied or divided between our competitors. In this sense, building an IT ecosystem for creators and brands — that is, creating products that will solve their problems — means opening up new opportunities for them to earn money. And I see it as our nearest future.

In addition, these products provide an opportunity to think and develop globally. No matter what country a particular influencer or brand is located in, everyone can use Anton equally effectively in Belarus, Canada, and Brazil. Unlike most partnership networks, we keep our creators connected not with strict legal restrictions, but with our cool, useful products.

In a sense, we challenge the current market and offer completely different rules of the game.

YouTube multi-channel network that generates over 5 billion monthly views, and a development IT-product for influencers