The Government body, which continues for the time being to control terrestrial television in the market, is offering advertisers prime-time advertising space across the country’s major channels, in particular KBS (Korean Broadcasting System), at rates that have been slashed by up to 40 per cent. The discount is accompanied by a free 15-second spot, as a sweetener to those who invest a sufficiently high amount in the medium.
An industry source in the market indicated that any significant investment by advertisers was likely to be confined to the first half of the year, with spend slowing in the second half in anticipation of a more fruitful 2010. The source noted that Kobaco’s measures had never previously been initiated in Korea.
It is unclear whether the promotion will continue past January. “Whether they repeat or continue will depend on how bookings go,” said Mike North, managing director of Starcom Korea.
The law giving Kobaco control over broadcast advertising rates, which has been in effect since 1981, is under revision, following a recent court ruling that declared the monopoly unconstitutional.
Observers believe the end of Kobaco would lead to a rise in ad rates, potentially generating increased revenue for the Government and broadcasters, but at the expense of lower-spending advertisers.
