In just a few months, the MDK has turned from a marginal humorous community, which it is customary to speak of with disdain, into a permanent defendant in news about the Russian Internet. Not only specialized publications, but also the federal press write about the news of their business — the launch of the mobile application in first place on the App Store, cooperation with Odnoklassniki and blocking on VKontakte. Advertising market players are already sounding the alarm that publics are killing SMMs and threatening creative agencies. And judging by an interview with the founders of MDK H&F (in addition to Panchvidze, Dmitry took part in the conversation, who is not yet ready for deanonymization), the advertisers' fears are justified.
Co-founder of MDK
About Internet Advertisers
Initially, advertisers came to us with their materials. We looked at them and understood: they are not so raw, they are not suitable for any Internet audience, and not just for MDK. Maximum - they could be published in newspapers. Typically, customers say: "We need something youthful, cool, for the Internet, but at the same time, within the framework - no mat, no boobs, nothing like that." Not every brand dares to stand next to the word "dick." We agreed - just pay, place. For example, for Renault they made 20 shooting pictures with a hard peppercorn. They all rejected them and chose the most disgusting option that would suit only the TV. The result is 2,000-3,000 transitions. This is the worst conversion in public history.
Another thing is when we are completely trusted. One of the first successful projects is the Subway Surfers ad. It was a dead toy, which a year after the appearance everyone forgot. We just made pictures without links, giving the impression that this game is so popular that memes are already made from it. The game took a second wind and then kept on top in the App Store for another month.
Then came Game Insight with the "Natives" and Surfingbird. They fully rely on our decisions: mate, satire, and black humor. It goes fine. With one post about Surfingbird, there were 14,000 registrations per night - that's very cool. We realized that we need to lobby our thoughts, our ideas and form an understanding among advertisers that the Internet is a different environment.
About business development
Advertisers are gradually changing, but in their view we are just guys who make pictures. There are agencies that create, like Smetana, Hungry Boys. Clients trust them - they have an LLC, they have an office. We think, why don’t we do the same, as they say, they are greeted by clothes. At first, we expected that we could turn mountains without an office, showing that such cool guys just exist. But in the end, they decided not to break the system. Now we will create a creative agency with our own production. We will continue to sell part of our advertising space through advertising agencies, but priority will already be with us.
Many people think that MDK is
it is only a community.
But behind it is a whole content production system.
We collaborate on video production with third-party studios, but in the future we want to open our own, as well as invest in startups. Already there are preliminary agreements: in the fall we will buy a minority stake in one Internet project, a mobile messenger. In general, they are ready to invest up to $ 100,000; mobile and video are interesting. We want to cover as many areas as possible. Many creative agencies, people who invest in startups, are unprofessional in their approach to this.
Many people think that MDK is a community, that's all. But behind this lies a whole system for producing content. There is a network of publics, about ten in all, from 20 to 30 people, some session editors, some come and go, some permanent. There is own production. There are mobile applications. Representation in Odnoklassniki.
The blocking and restrictions on advertising slowed down the growth of our income a bit, there were more expenses for new projects, but we expect to bring the turnover to 4 million rubles a month by the New Year.
About VK Advertising Policy
The exchange of advertising posts was promised by the summer, but there is no news of it at all. If earlier we met, asked how to make it more convenient, but now, it seems, everything has rolled back. Maybe they didn’t even start to do it. We still do not understand why these restrictions exist - three advertisements per day. Why exactly three, not two and not ten?
There are people who believe that with the advent of the exchange, publics will die, and others - that you need to take the highest position in order to row to the maximum, because the average price of a post at the MDK will be about 100,000 rubles. Having learned about this, many wanted to either remove their competitors or build their own. A big wave of bans poured - over a week dozens of public millionaires were blocked.
We were unblocked because we generate such traffic that we unscrew somewhere around 20-30% of all VKontakte banners. Without us, they lose a significant share of income. One MDK has a monthly audience of 12 million unique visitors.
The administration rewrote the user agreement, this is an unprecedented case - our ban helped open their eyes. Now communities do not ban at all, they only deprive of their rights. But the new main limitation is that links cannot be published. Now we have one hidden advertisement, now we don’t even recognize where the advertisement is and where not. We can joke about Coca-Cola, and no one will understand that this post is actually paid.
About Pavel Durov and copyright holders
VKontakte has recently become an increasingly closed company, fewer people understand what is really happening there. And the situation with Durov is very strange. Perhaps all these stories with copyright holders and other scandals are his business. He is a rather extraordinary person, he has a non-standard way of thinking, he could very well initiate such things himself. How can copyright holders start filing complaints for no reason? He probably just allowed it. Before, roughly speaking, he didn’t give a damn about it, because Russian legislation allowed him to do it.
If copyright holders could offer something in return, then there would be some sense. So far it looks like complete nonsense. What was deleted has long been returned. Nothing will change. You cannot delete as quickly as it is downloaded again. But if the system works, when the user is punished, as it happens in the States, then maybe something will move. But in the next five years nothing will change.
For example, we deleted interview materials with Sasha Gray. We had an agreement with the photographer that we have exclusive rights. We showed it on VKontakte and they started taking these photos from other communities. It is very slow, very difficult, and you cannot block it, you can only delete stolen content. If they took off today and hanged again tomorrow, then we must write again in support.
We want more independence from VKontakte itself, so we started working with Odnoklassniki. We studied the audience, and we realized that nothing new was needed there. New to them is evil. They love template content. If young people are sitting on VKontakte, then in Odnoklassniki there are women after 30 years old, children, and there are more schoolchildren than Durov and adult men. Plus a large percentage of users from regions. We also got to the moment when Odnoklassniki needed monetization of the video.
Display advertising has a very small conversion, it dies, only hidden, stylized advertising works
In test mode, we started to launch video channels. One is dedicated to car crashes - this is Fixter, the second - "Toy Library" with reviews of games. Each channel collected a total of 50,000 views per week. Now we want to scale, reach more communities. The advertising there will be from Odnoklassniki in the form of prerolls - short clips in front of the main video. Our income will depend on their number - for viewing one social network, we are ready to pay the ruble.
About mobile apps
After the release of the MDK mobile application, we received a huge number of offers - people wanted to see investors in us. But just like that, we cannot give someone half a million dollars. Rather, we can give not money, but marketing, promotion. Based on the experience of MDK, we realized that we are able to provide at least 600,000 installations on iOS and somewhere around a million on Android. For many developers, this is a very good start. Many start-ups went like this: they took three advertisements from us in the evening and got into the top of the Russian App Store. At that time it cost about 50,000 rubles. This is very cheap, given that the "Application of the Day" can be for 100 or 200 thousand downloads.
In our application, we first went the usual way - we placed third-party advertising through advertising exchanges Tinkoff Digital, WapStart and others. But they all showed their complete inefficiency, for the customer, for us, and there was no profit, and there were no installations. Therefore, we made our own advertising system. Perhaps we will scale it, include it in third-party applications. There are no banners, no other intrusive pictures, all advertising is stylized as main content, it is possible to immediately go to the App Store and install the application. We just turned it on, and now it is 20 times more effective than exchanges.
These exchanges have very backward functionality - our application runs 10 times faster than their ads. Banners appear almost when users scroll through all the pictures and exit the application, they are so slow. All of our calculations for banner advertising revenue flew down the drain. Plus, users reacted very negatively to this banner ad - everyone was unhappy. Display advertising has a very small conversion, it dies, only hidden, stylized advertising works. People begin to repost, comment, share with friends, and no one even understands that this is the order of advertisers.
Photo: Sergey Patsyuk