Feb 3, 2021
Korean Online Video Ad Trends
Online advertising in South Korea is a multi-billion dollar industry that grows annually with the rise of new digital consumers. According to Korea Online Ad Association, online advertising spending increased by 21% in 2019, and it accounted for 48% of total advertising spending.
In 2020, as businesses struggled to keep afloat amidst the pandemic, spending on advertising became more strategic. The mobile online advertising became more popular in order to target the users who spent time at home looking at their phones, while spending on outdoor advertising fell swiftly and sharply.
Online video advertisements have become an effective way to reach users during the pandemic. Brands in South Korea have taken advantage of new market environment and increased spending on online video ads.
Keep reading to see why, where and how top brands spend money to promote themselves in South Korea.
Korean Online Video Advertising Market Size
In July 2020, the number of COVID-19 cases was relatively low and generally believed by the population to be “under control.” After the initial outbreak in March when peak number of cases reached 851 in a single day, aggressive tracing mechanisms began to take place.
Throughout the summer, cases hovered at around 50 per day until the “second wave” hit in mid-August, continuing towards the end of September. After a worrisome fall season when numbers were lower yet still fluctuating, the most serious “third wave” occurred in the winter with daily cases reaching up to 1,000 cases per day.
During these “waves”, restrictions were put into place in and people began to spend an unprecedented time at home. If we look at the graph below, we can see that the number of cases correlates with the amount of money spent on online video ads.
The chart shows a lower amount of spending on advertising in the summer compared to the following months. Following the first wave, online video advertisement spending increased from 94.1 billion KRW in August ‘20 to 101.4 billion KRW in September ‘20.
During the winter season, this amount of spending increased even more- as brands sought to profit off of all the time that people were spending on the internet.
At the end of 2020, spending on online video ads has increased to 112.5 billion KRW, up 18 billion KRW from July 2020.
The Top 10 Media for Online Video Ads
YouTube, Facebook and Instagram are the most popular media platforms in South Korea. A KISDI report has shown that in 2020, 52.4% of Korean people owned some type of social media. The usage of the Internet and social media applications was further exacerbated by the COVID-19 outbreak.
Based on data from the country’s 33.7 million Android smartphone users, users spent 53.1 billion minutes on YouTube in September, compared with 44.3 billion spent on the app the previous year (20% increase).
The chart below shows a comparison of the spending on online video ads on major medias, between November and December.
In December, Tving, a Korean platform streaming service, comparable to Netflix, recorded the highest video ad revenue growth among top 10 media companies, with an increase of 18.1% from the previous month.
Facebook, Daum (domestic search engine), and GOMTV (live streaming platform) also recorded an increase in video ad revenue in December.
The Top 10 Spending Companies for Online Video Ads
The chart below shows data of South Korea’s companies that spend the most for online video advertising. The list includes not only largest Korean conglomerates but also fast-growing unicorn startups.
All advertisers except LG Electronics and Samsung Electronics increased online video advertising spending compared to December.
Megastudy Education recorded the highest growth rate (272.8%) in the top 10 Media due to increased execution of existing campaigns such as “elihigh”, an interactive education platform for children. The transition to online and remote learning can be attributed to this sudden spike in usage of education applications.
Other brands, like Nexon, Korean–Japanese video game publisher, had a 166.6%-increase on advertising spending. This is due to the fact that usage of games skyrocketed during COVID-19.
Dyson and Pulmuone also both saw a higher spending in advertising for online video ads in December due to increase in product demand.
The Top 10 Spending Industries for Online Video Ads
Out of the 10 industries in Korea which spend the most on online video ads, advertising spending increased compared to the previous month for five industries, and decreased compared to the previous month for the remaining five.
Among the industries that increased spending on advertising was Education and Welfare, which recorded the highest growth rate of 61.8%.
Pharmaceutical and medical, on the other hand, decreased its spending on advertising significantly, as people needed less convincing to buy products related to this industry during the COVID-19 era.
The Future of Online Video Advertising in Korea
South Korea’s multi-billion dollar online advertising industry is one of the biggest in the world, and it has grown nearly every single year in the past two decades. Since 2015, online ads on mobile and dekstop have surpassed all other methods of advertising, like print and outdoor advertising.
Online video ads specifically, are becoming more and more important to brands looking to make a lasting impression on consumers. With more advances in technology, online video ads are more clever and popular than ever before. For example, users are 3 times more likely to watch YouTube ads vs. TV ads.
Both big and small companies in Korea were seen branching out and spending more for online video ads. When looking at the top 10 industries and the trends on online video ads, it was observed that half increased their spending, and the other half decreased their spending on advertisements. This is a prime example of how COVID-19 has affected industries in drastically different ways.
Brands that are looking to expand to the Korean market should most definitely explore options to incorporate a video ad on YouTube.
To watch some examples of Korean advertisements, check them out here. To learn more about advertising and marketing trends in Korea, check the AJ Marketing Blog.
Read Next:
Top 17 Korean Instagram Influencers — A Deeper Look
South Korea’s Social Media Trends in 2020
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