Fintech - The Business Model of Influence

foreign [Music] office first of all I would like to thank you all for being here to at the atrium with with to what I would like to call that the fun part of adfw after the stunning of course and the most amazing opening ceremony I've witnessed in a couple of years don't you agree it was fantastic and the Drone show the Falcon fireworks are dead yeah it's all about drugs very true very true um with me I'd like to welcome on stage and Sasha koletsky co-founders of creative Ventures um an early stage Venture Capital firm focusing on companies advancing how humans interact welcome thank you so would you like to tell the people I'm sitting here yeah so yeah I'm Casper I'm originally from South Africa but I I live in mostly the UK at the moment and I built an audience over the last 10 years on YouTube it's over 7 million subscribers um and and and and then also did Twitter Instagram and so on and along the way discovered that 90 of the revenue that creators make was through brand collaborations so co-founded a company called influencer.com that connects Brands and creates that scale and that was about five years ago which then led me into Venture Capital with Sasha my partner and also happens to be my cousin so very excited to be here today yeah perfect I'm Sasha Catherine as you mentioned the cousins I was working in private Equity at a firm called Bridgepoint it's like 30 billion AUM kind of large cap and growth investor we started investing together in 2019 uh alongside a Syndicate other social media creators celebrities athletes kind of people with large large followings and we shared all our deal flow with them free of charge we just invested with them that's what we got out of it we did that as a side gig for a few years we got some good returns we invested in some great great companies and then we've now raised the fund which we closed in March of this year uh to invest in consumer internet businesses session today who and how influencer marketing actually affects all of us now like most of us here today and um considerable amounts of time browsing some like social media consuming absorbing processing information and often opinions social media has become As Natural to our daily lives as brushing our teeth or having our morning coffee which is usually accompanied by browsing the internet of what have we been missing for the past 12 hours and with more and more people across the world social connecting through digital channels on an hourly basis perhaps we ask ourselves number one is social media continuing to hit the bullseye or is there something missing in the equation number two how sustainable is the current economic for influencers and advertisers and finally social media starts positioning themselves across platforms to move markets and products according to an article published by influences marketing Hub the value of influencers marketing Grew From 9.7 billion dollars in 2020 .8 billion dollars 2021 and is due to expand to a whopping 16.4 billion dollar industry with almost 15 billion dollars during the highest on record now in Feb 22 the media monitoring company meltwater published an article on the importance of of influencers Market cluster marketing stating that 2022 influencer marketing Hub survey found that a massive of 90 percent of marketers believe that influencer marketing is effective 72 percent of marketers thank you agree that influencer marketing provides higher quality customers and 49 of consumers depend on influencer recommendation now you guys are two of the world's top personalities when it comes to both media and business I'll ask you this why is influence such a valuable commodity I could take this yep yeah I mean I think this should work this should work just fine but it's almost like we could just drop the mic right there after that beautiful intro to to our space I really appreciate it we don't have to do any selling now which is great thank you very much but yes so why is info is valuable I mean there's there's the long-term reasons then there's what's happened in the immediate term the long-term reasons is that like you said people are spending more and more time on social media and what people are doing on that social media is browsing content and if you give them content that is native to the experience that they're already enjoying that's going to convert much better so people can experience ads effectively ads that they don't really fully realize their ads right which sounds dangerous but it also can really convert convert for Brands the reason the last six months has been such a good period for influencer marketing as Casper's business is found is that Apple earlier this year introduced something called iOS 14.

5 something called ATT within that which basically if anyone has an iPhone they've experienced when it asks you whether you want to your app to track your behavior and other apps and most people about 80 to 85 of people say they don't want the app to track and what that's done is it means that one app doesn't have your information from another app so for example Instagram doesn't know what you're browsing in Google Chrome and so digital marketing has become much much more difficult so what a lot of brands are finding is the only way to connect directly with their consumers is via influencers because they already have all the relevant all the relevant audiences so this year has been a huge huge year for influence marketing and we think that's going to continue for the long term um you told me backstage that you are kind of like delving a little bit wider on theinfluencer.com um platform basically going into different markets and whatnot so can you kind of yeah so you know I I started the company with a guy called Ben Jeffries we were in our early 20s when we started it um and uh yeah we knew that this this was happening because as young people you kind of see everyone you know who you know how they're consuming content uh and how the next generation will consume content so in the beginning it was very difficult to convince Brands uh to do this because uh you know at the time they had their budgets and it would be an afterthought it would be something like you know if they had extra PR budget at the end of the year they might come to us now it's become a line item on the media plan uh and as you said 90 of marketers see it as a value add especially since this iOS change so yeah we work with tourism boards in the region which has been incredible we you know we said 300 creators um to sta Saudi tourism authority over the last year and it's stuff like that has been you know huge for us um and yeah it's just interesting to see how you know it's not only brands that you would expect like your social first brands that are doing it it's also just your more mainstream companies as well who are now doing it so it's finally mainstream which is very exciting and we you touch base a little bit on it but from what you're saying is that we're looking at a learning curve with an entire Market because as you said people we don't usually put a social Media influencer budget within the marketing communication plan that's the pain of my existence personally when it comes to budgeting but um but yeah but right now the learning curve and how do you see that kind of expanding across the regions that you're you're with is it still a small amount that is directed to influencers or is it kind of like taking over that marketing Communication in that budget so it's it's I mean it's becoming huge uh in the US it's already basically there it's I it's it's and then the UK is probably about three years behind and then the rest of the world is behind the UK but I think what we're seeing is influences aren't only being used these days just to reach Their audience uh as a platform so so for example this iOS issue it's hard to reach an audience right so you can use influences through each other audience but what Brand's also realizing is that influencers also have a higher brand recall so when you see a Creator within a piece of content that people are remembering that content and and so they're using creators within the wider marketing mix so you're seeing creators on billboards you're seeing them within movies you're seeing them everywhere and as that happens it closes the gap between traditional celebrities and influences um and so yeah we no longer distinguish so for example you know we're doing a campaign right now and uh it's you know we work with Google pixel on that and they're they're a big client of ours and you know we're working with people like Mason Mount who's you know playing football at a high level and we're working with the Creator and they're in the same advert and they no longer even look at each other at different levels that they almost like it's quite funny how some of the footballers are big fans of creators and they get excited when they're in the same room so it's been very interesting to to see from this side of the table because originally was the creator now on the business side it's been been fascinating so on on that note so how do you see the new business model of content evolving the traditional methods of communications and marketing and how our influencers seen as key to the success of the new era I mean one way to look at it is that one of our big Theses as eventual Capital fund is that brands are having to become content creators so often that that involves hiring an in-house content creator or getting really up to speed with memes you know often you have like one brand attacking another brand kind of for jokes online which is can be quite enjoyable but yeah we think that's probably the most important part of it is Brands themselves becoming creators and and part of that process just like a content creator grows up with their friends and makes content with their friends we think brands have to start working with collaborated groups of creators that they pay to engage with so yeah I mean I don't know if you guys have ever flown with Ryanair do you know the the very the low cost Irish uh okay it's a really boring horrible brand right I mean it's it's when you're on they're the airline that decided to um say they were going to charge people to use the toilet yeah so the horrible horrible Airline but they've used social media to become a really kind of uh you know uh looked up to Brown by a lot of gen Z because they're just so funny they're so self-deprecating and they're constantly uh in the in the conversation and that's a great example so if you have Tick Tock or if your children have Tick Tock take their phone and follow Ryan and you'll see what I'm talking about all right so um I'll go a little bit into the economic side so a little bit of serious talk when it comes to these so what does it take to break through the Clutter from economic and financial influencers there we go so I mean I I think it's not so different from all creators they have to follow what I call the three C's uh which I heard someone talk about the three C's yesterday but this is my three C's um so it's a consistency creativity and collaboration so they gotta you know you've got to upload in a consistent level as consistent Pace uh you know creativity is important you've got to have something that is actually interesting and what I call thumb stopping content so something right now you're competing with so many people and the algorithms are so difficult you have to have a lot of watch time watch time is basically the amount of time someone spends looking at a picture or watching a video so it has to be thumb stopping content and then collaboration is so important because it widens your net so it means that if someone does discovers anyone in your network they might also discover you so it doesn't matter what level you're at if you've got a hundred followers just find like 10 people with 100 followers and then your net becomes a thousand and then you guys can grow together so it's very very important because there's a lot of um misconception in regards to what social media stands for and how you're supposed to approach it um not a lot of people understand it is actual science that goes behind it there's a lot of numbers there's a lot of strategy and tactics for you to actually be able not to only post content but to make influential proper content and someone who epitomizes this as a guy called Mr Beast again a show of hands how many people have heard of Mr Beast that is incredible Mr Beast has a 111 million subscribers today he uh you know his his business was valued at over a billion dollars and he turned down the offer for someone to buy it he just overtook PewDiePie uh most influential person of his generation uh and he he employs about I think he said six data scientists full-time working on what makes a big YouTube video work uh this person is turning over huge revenues and so it's so important uh and he's I think he's like 22 years old about yourself all right so what are your views Sasha on the platforms currently serving the social media influencing Community do you view some are better than others or do they provide a cohesive ecosystem to successfully influence opinions Inspire change and for influences to be heard what are the few factors that ensure the needle is moved yeah so I mean I think there's definitely a use the word ecosystem that's definitely how we view it as an ecosystem I mean one way to view it is almost like on a Continuum from platforms that are focused on content to platforms that are focused on followership so on the extreme followership side of things um you have platforms like YouTube and to some extent Twitter where um a user will will follow a Creator and open the YouTube app to look at what that creator has posted so on YouTube for example when Casper was growing up his fans would have got a notification when he posted they'd instantly watch it and and check it out straight away that's because they were following Casper on the other side of the platform on the other side of the Continuum you have content platforms which is basically where the the user's addiction is not to the or the user's um familiarity it's not to the Creator but to the platform itself so a great example of that is Tick Tock or Instagram reels where you open up the tick tock app and you as Casper said scroll scrubbing content you keep scrolling but you don't really look up specific creators you just take what you can get it's more like a lucky dip and so the trade-off there is on the first category of platforms where the loyalty is to the to the user it's much more attentive it's much easier to monetize it's a much more engaged fandom but it's much slower to grow whereas on the other type of platform you can go very viral very quickly and very easily but do you really have an audience or do you just have people watching your individual videos so what what we like to recommend to creators is to start with Tick Tock start with Instagram reels start with some of these viral platforms and then slowly start to bring your audience and this applies to Brands as well but slowly start to bring your audience into those more retentive platforms like Twitter like Instagram and like um like YouTube and then and then podcasts of the Holy Grail if you can get someone to listen to you for an hour you've got a fan then you got it done you got it made um so Casper art influencers able to create a sustainable financial model for themselves in the long term and how can they actually accomplish that yeah I mean it's very difficult to say all can do it because there's just so many there's something like 50 million people who consider themselves influences but let's just talk about the ones who are doing it full time um you know there are a number of ways they can do it at one way which is still the most popular is brand collaboration um and that's great and I definitely advise creators do that because you can you can you can create enough Revenue to create better content to get more of an audience and so like Mr Beast again who I spoke about earlier is a great example he took all of the money from Brand collaborations and reinvested it into his content to to grow his audience uh but you can also you know launch a business I think there's no better entrepreneur than someone firstly who's Dynamic enough to start a channel that does well but then they also have an audience of consumers who might uh purchase whatever it is that they're selling so that's something that they can do I reckon men though that they don't build products just using their own name because obviously you're only as relevant as your own name so if you can build a product that people can discover Beyond you and you can promote it that's really good personally I've built B2B companies and that's been quite different you know we did a study uh that I think about 60 of influences created fashion and Beauty type companies and only uh five percent were doing B2B and the good thing about B to B for influencers is like most people don't get the opportunity to sit in front of this sort of audience who can be incredibly instrumental in helping my business grow and so as a Creator I'm welcome to these sorts of events so it makes sense actually that B2B can work so yeah those are some things I definitely advise people to do work with Brands but also build up your own revenue streams and then going forward there's also an opportunity to have pay Ward content um so yeah there's a number of platforms including patreon where you can monetize directly your your followers and you only need a thousand fans to make a really good living but in the future I do think there's going to be a struggle for creators after you know 10 20 years of creating content there's burnout and things like that but I also think that they'll be able to work for either other creators who need editors and videographers and and creators to work for them or they could work for Brands who need to start creating content as creators all right so you not looking at the Future How can you tell me how the business model of influence has changed in the past five years um yeah I mean it's similar to what Casper was saying so uh creators the the business model has basically been created in the last five years really I mean five years ago there was a few brand deals happening here and there but really it's become really professionalized yeah and now there's a scale scale campaigns taking place there's influences starting business of their own which you know we often like to invest in um so yeah I would say it's kind of there wasn't really an industry then and that there is an industry that's quite it's very funny um my lovely grandmother um used to not take what I did very seriously uh and asked me when I was going to get a real job and I I was able to I was invited to Buckingham Palace to meet the queen and that's when she finally took it seriously so I think what I'm saying with that is um you know within the first five years last five years institutions governments Brands everyone's now taking it seriously and so when you you know when you if you ever get chatted up at a bar and someone asks you what you do and you say you're a Creator they no longer laugh so survey of children and they asked them they I think they quite consistently ask them what their favorite job to be when they grow up would be and it's been astronaut for about 20 years straight and I think two years ago was the first time that YouTuber overtook um and took the number one spot which I I don't think is a good thing by the way I would rather people want to be honest it's a very very fine line I would say because it's it's important to kind of look at content creation not from a trend standpoint it is what you are you actually contributing to the community this is the way I see it call me old if you want to but um it's not about jumping on the trend and doing what's the latest thing that's happening it's actually what are you giving the community back when it comes to Information Technology people influencers Etc so how are we creating um the the future Generations because there's a lot of kids who are watching these platforms that require um I would say valuable content like thought-provoking content yeah for sure so that's your favorite subject right now we're going to be talking about is chat Bots chat Bots how dangerous are they in influencing Minds yeah I mean it is pretty scary uh I mean it's a broader topic around I'm sure generative AI is going to come up a lot today but you know you can see these advances happening with the quality of um human impersonation I think in the last 12 months what we've learned is I think people used to think that the the human element the kind of Soul of Being Human in creating content was going to be the least reproducible bit but I think what's happened with gpt3 and and other platforms mean that it is very becoming much easier than we thought to basically very well impersonate human writing and even drawing and and photos um so I I think it's too early to tell exactly what the dangers are going to be but I think when it comes to both regulators and Brands and even people using social media themselves I think the best option is just be very careful about about how you use your phone and how you use Ai and just when you're texting somebody just keep in the back of your mind there might actually be AI talking to you all right on that fearful note um any last words you would like to give our audience before we release them from their chairs just just thank you so much uh this has been incredible incredible week for us so far the the beautiful stage is is is something definitely something you should take a selfie yeah oh sorry that's what you're trying to prompt I'd love to take a selfie please all right so before we do take the selfie again thank you all for being here my name is and it was an absolute pleasure so everyone I need you to smile because that's okay uh and come to me afterwards if you need me to blow your face out or something there we go okay awesome thank you thank you all