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In today’s update, we bring you new developments in advertising from South Korea. Naver and SKT are upping their advertising targets to generate more income. The businesses are targeting direct foreign buyers to increase their sales while dealing with delivery bottlenecks. The advertising market in South Korea has grown amidst the Covid-19 while the government is working to reduce unjust advertising.
1. Naver Expands Its Advertising Lineup to Accelerate Search and Commerce Synergy
Naver, the South Korean search engine is rolling out new advertising services in an effort to improve synergy between Naver’s own search engine and e-commerce businesses. In the first half of the year, dynamic advertising solutions that reflect individual interests and purchasing intentions will be released as a result of combining commercial data and AI technology. Following this, full-page advertisements promoting brand recognition in partnership with Shopping Live will be launched.
2. Advertising and Subscriptions Are SK Telecom’s New Money Source
SK Telecom recently declared its transition from a telecommunication company to an AI and digital service company. Since the transition, the company stated that advertisements, data centers, subscriptions, and metaverses are going to be its future. The firm intends to establish an advertising platform using wired and wireless POCs from SKT and SK Broadband in the marketing sector. The point of contact where consumers pay for goods or services is known as a POC.
3. Active Ecommerce Marketing to Target ‘Foreign Direct Buyers’
According to the National Statistic Office, online overseas direct purchases hit a record high of KRW 5.14 trillion in 2021, up 26.4% from the previous year. Despite the fact that the global logistics crisis has worsened, direct purchase transactions have hit a record high of KRW 5 trillion for the first time in history. On top of that, as eCommerce enterprises are increasing their marketing efforts to attract more consumers, the long delivery time and high delivery prices that were previously obstructing the process are being addressed.
4. 20.4% Growth in South Korea’s Advertising Market in 2021
The total advertising expenditure in Korea rose 20.4% to KRW 13.989 trillion last year, according to Cheil Worldwide. It is the highest growth over the last few decades since counting total advertising costs were begun in 1973. COVID-19 caused the advertising industry to change rapidly and develop at a breakneck pace, according to the study. 2020, the first year of the pandemic, caused a decline in advertising, but by the end of 2021, it had grown exponentially.
The digital advertising market has grown to around 7 trillion won, accounting for 53.7% of the overall advertising market share. Last year, the digital advertising market grew by 31.5% to KRW 7.51 trillion, making it a lucrative industry in Korea alone.
5. WeMakePrice Stops Accepting Affiliate Fees
WeMakePrice announced that it will eliminate the partnership charge for Meta Shopping, a metadata-based shopping platform. Previously, WeMakePrice had teamed up with numerous shopping malls to provide services. Starting the new year, all of those associated malls that have previously subscribed will no longer be required to pay fees. In general, fees of around 2-8% are levied, but Wemakeprice has chosen not to charge associated shopping malls the commission from sales. It also intends to provide app access for the first time in meta-commerce. Affiliated shops can select between the web and the app to conduct their business.
6. Over 200 Instances of Unjust Online Advertising Flagged
In violation of the Labeling and Advertising Act, South Korea’s Ministry of Food and Drug Safety has discovered 208 misleading claims about hair and skin health in advertisements. The Ministry of Food and Drug Safety reviewed 413 hair and skin health-related product advertisements on the internet, which are becoming increasingly prevalent in the colder months.
Among the advertisements with major violations were 158 cases (75.9%) promoting general food as if they were effective in preventing and treating diseases such as hair loss. There were 38 ads, amounting to 18.3%, that misguide and confuse general food with health supplement food. The rest was made up of 12 cases that included 5 false/exaggerated ads (2.4%), 5 ads that deceive consumers (2.4%), 1 that misleads general food as medicine (0.5%), and another ad that differed from the previously mentioned content.
7. PlayD to Be a “Google Premier Partner” in 2022
PlayD (Play Dynamics) of KT was recognized as a “Google Premier Partner” in 2022. As a Google partner since 2013, PlayD has a strong relationship with the search engine giant. The top 3% of agencies that satisfy certain criteria in performance, expenditure, and accreditation are recognized as Google Premier Partners. Among Google Partner programs, it has the highest rating. Premier Partner companies will be able to take advantage of Google’s services, such as educational assistance and technical assistance.
Naver, South Korea’s search engine has started to diversify its advertising strategies to provide a more targeted service. While SKT has transitioned to AI and digital services and shifted its focus to advertisements and subscriptions to generate income. Foreign direct buyers are becoming a target for active eCommerce marketing with the recent increase in sales. When talking about South Korean companies going global, PlayD has become a Google Premium Partner in 2022.
South Korean Ministry of Food and Drug Safety is working towards reducing advertisements that misguide or confuse consumers and provide false/exaggerated information. WeMakePrice has decided to stop charging affiliate fees from its partner shopping malls. Amidst all this, South Korean advertising has reached an all-time high. We hope that today’s article brought you some exciting updates about South Korea’s advertising developments. We’ll be back with more insights soon. Stay tuned to Inquivix Insights!