South Korea is one of the largest advertising markets in the world, with over $10 billion spent annually on advertising. Korea is the leader in digital transformation and this it is reflected in brand advertising spending.
As for consumer habits, Korea is focused on purchasing items for not only primary needs, but for image and status reasons as well. Luxury goods, for example, are often used as a measure of wealth for many, if not the majority, of Koreans. This phenomenon of “buying to impress” applies to other goods and services too; from the latest LG vacuum to the newest phone from Samsung.
Products and services must be marketed to meet changing consumer trends: digital transformation and desire to boost social image. That's why winning brands in Korea are choosing YouTube and Instagram as preferred channels to market to their audience.
This article is intended to help get some insight on the advertising market in South Korea and what the trends suggest for 2021 and beyond. Keep reading to learn more about what works and what doesn’t for these tech savvy Korean consumers.
1. Broadcast Advertising Market in Korea
The size of the broadcasting advertisement market appears to have decreased by 5.7% (approximately $193.6 million) compared to ’19 in all markets, especially in terrestrial media (TV, Digital Multimedia Broadcasting or DMB, radio).
Terrestrial television is a type of television broadcasting in which the television signal is transmitted by radio waves from the terrestrial, or Earth-based, transmitter of a television station to a TV receiver with an antenna.
Other platforms like satellite broadcast of Internet Protocol television (IPTV) saw noticeable yet not-so-drastic changes.
In addition, after 20 years, the overall trend of broadcasting media has been on the decline as more companies choose newer and more effective methods of advertising- such as using artificial intelligence and influencer marketing.
2. Online Advertising Market in Korea
Online is a medium that shows steady growth every year, and it is estimated that in 2020, online advertising expenditures have increased by 11.5% (about $670.4 million) compared to 2019.
The upward trend is expected to grow by about 9.4% in 2021.
Mobile advertising in particular showed a sharp increase every year, and as of 2017, it has surpassed the advertising cost of the Internet. This can be attributed to the fact that more people than ever own smartphones in South Korea.
In fact, in 2020, the smartphone penetration rate in South Korea was 95.42%. Smartphones are rendered (almost) useless without applications, and the applications that we use cleverly monetize our usage through heavy exposure of paid advertisements.
It is estimated that in 2020, mobile advertising will reach about 3.2 times that of Internet advertising, and about 3.4 times by 2021.
3. Outdoor Advertising Market in Korea
In the outdoor advertising market, advertising expenses in 2020 are estimated to have decreased by 21.2% (about $241.1 million) compared to 2019.
In the case of the outdoor advertising market, in particular, it is the media that was most affected by COVID-19 as less people spent time outside. With more people staying home, less money was spent towards advertisements that are visible in public areas, such as subway stations or freeways.
Among outdoor advertising, entertainment advertising decreased by 55.2%, which is estimated to have decreased by more than half.
Entertainment advertisement includes product placement, celebrity endorsements or event sponsorships. Since the outbreak of COVID-19, there have been far less opportunities within this sector to advertise in. However, with lockdown restrictions slowly beginning to lift and in-person events being introduced again, entertainment advertisement is expected to recover.
4. Print Advertising Market in Korea
It is estimated that the advertising expenditure in the print advertising market in 2020 decreased by 5.0% (approximately $106.8 million) compared to 2019.
Newspapers increased slightly (1.9%) from the previous year in ’19, but decreased by 5.0% from the previous year in ’20. Print advertising has been steadily becoming less and less popular for a decade now; so the decrease in market size does not come as a surprise even with the economic damages caused by COVID-19.
5. Gender Distribution of employees in the Advertising Market
An interesting report to analyze is the gender distribution of employees within the advertising market of South Korea. Like the United States and many western countries, there seems to be a majority of men in this particular field.
There are a total of 25,082 advertising workers in the media, and it was surveyed that there are about 10,000 more men than women.
By media, newspapers have the largest number of workers, followed by magazines and outdoors. Generally speaking, advertising is a male dominated field in most countries, including South Korea.
However, more women have been entering advertising and PR field in the past 5 years and the trend has been steadily increasing.
Advertising trends have changed over the decade and suffered through various crises (most recently COVID-19).
Although the size of the broadcasting advertisement market appears to have decreased significantly, online advertising has taken its place as more and more people spend their time online. Mobile advertising in particular has seen a huge success for many brands.
The outdoor advertising market is expected to make a recovery as the COVID-19 vaccine rolls out in South Korea beginning February. For other markets like print advertising, the trend continues downwards; as people spend less time on print media.
South Korea is a major consumer nation; and for any brand wanting to make expansion in Asia, this country should not be overlooked. If you are interested to start your own advertising campaign in Korea, you will find useful these articles: