When taking a look at ‘where’ Koreans consume contents, we notice a remarkable achievement from mobile media.
Mobile internet usage rates of Korean people in their 20s and 30s are 99.22 per cent, and 97.3 per cent due to easy access to WiFi.
Along with the strong infrastructure for mobile devices in Korea, numerous companies across various industries such as games, real-estate, and food delivery launched mobile app services and ‘M-commerce’ market showed a significant growth, taking 38.7% of the total online shopping market share in 2015.
The development of mobile market led to the increase of mobile ad spending which jumped by 52.6 per cent in 2015 compared to 2014, taking 11.9 per cent of the total advertising spending. And, the mobile ad spending share is expected to reach 14 per cent in 2016 with its continuous growth. At this point, some people may expect that TV market would eventually die and be taken over by the digital market. However, TV still shows a strong presence with its 39.4 per cent share of the total advertising spending. The reasons why TV is still beloved in Korea can be explained by low TV subscription fees and the quality of local TV content.
Crucially, content produced by the local TV broadcasters can be easily accessed on various platforms, increasing the total media consumption. Since 2015, the local terrestrial and cable TV channels formed an advertising sales rep consortium for online video streaming services called SMR (Smart Media Rep).
They ended the service of their contents on YouTube and joined a partnership with the local leading portal sites such as NAVER and Daum. As these 2 players dominate Korean market, this eventually led to an increase in ad spending on digital video, which jumped by 30 per cent in 2015 compared to 2014.
Additionally, the consumers are showing an active content following pattern, without being fixed on a device or a particular channel. On the other hand, the circulation of content created by semi-professional or one-man producers thru MCN at online broadcasting which started to become popular from 2014 slowed down in 2015.
Thirdly, in terms of ‘how’ content is consumed, ‘snack culture’ is most noticeable. It is a quick habit of consuming cultural resources such as short video clips and this has become inseparable from the busy lifestyles of Koreans. Two to five minute highlights of local TV contents distributed by SMR are now can be watched on Naver and Daum video platforms. Despite the non-skippable video ad format before the actual content get played out, SMR ad inventories are very popular among Korea advertisers and must be booked two to three months prior to live date.
Despite these trends, the desire to catch the premier of a TV programme has not died yet. 2TV’s recent mega hit drama Descendants of the Sun marked 34.8% of viewership despite the fact that general election result live aired on at the same time. The diversification of media consumption patterns like mentioned above have expanded the KPIs of media performance from TV viewer ratings to the number of video views, search queries, and shares.
It is found that the changes in media consumption habit have affected Korean advertisers’ preference by media. According to a recent survey conducted among 78 advertisers by Korea Federation of Advertising, online/mobile media platforms are expected to witness the biggest ad spending increase in 2016. Also, 65.4 per cent of the respondents see the most growth potential for online/mobile media platforms. There is clearly significant growth still to come.
Donna Kim is GM of Mindshare Korea