Matthew Keegan
Oct 9, 2023

Six things performance marketers need to know about South Korea

South Korea offers one of the biggest and most digitally engaged audiences in the world, with a huge gaming, influencer marketing and e-commerce audience keen to swap engaging experiences for their data—provided brands are transparent about its use.

Six things performance marketers need to know about South Korea
As part of Performance Marketing World's (Campaign's sister publication) Global Spotlight series, we delve into the popular channels, biggest challenges and recent success stories in South Korea to help performance marketers optimise their investments and plan future growth in the region.
Overview of market and consumers
With a population of over 51 million, South Korea is the tenth largest economy in the world and the fourth largest in Asia, with a $34,000 GDP per capita. Due to its wealthy and urbanised populace, the Korean consumer market is a lucrative one. 
In the 1950s, South Korea had a similar level of poverty to India. However, the country underwent a dramatic shift after the Korean War ended in 1953, which turned it into an industrial powerhouse and opened it up to foreign investment and trade.
Due to its wealthy and urbanised populace, the Korean consumer market is a lucrative one.
Today, South Korea is a highly developed consumer society where customers are brand conscious and tech savvy. Social networks are used to explore, review products and buy. Influencers and celebrities are influential in consumer decision making. Because of this, the Korean market is extremely competitive for brands, but it also presents a fantastic chance for new businesses to enter the market and establish themselves.
Given that the country has an internet usage rate of 93% among the population, it's not surprising that South Korea is the 6th largest market for e-commerce globally with a predicted revenue of US$101,774.8 million by 2023. Over 97% of South Koreans aged 20 to 39 use the internet to shop, making it particularly popular among those under 40.
Most popular media channels
Korea has a very advanced digital infrastructure, and being connected is an important aspect of everyday life, whether work-related or for personal reasons. 
Smartphone ownership is as high as 97%, and accessing the internet via a smartphone dominates PCs or laptops (over 30%). In Q4 2022, Koreans spent on average over 2.5 hours daily on their smartphones (with Gen Z spending nearly 3.5 hours a day on the device compared to 1.5 hours for Baby Boomers).
With Samsung being one of the largest corporations in Korea, it is no surprise that the Android mobile operating system dominates the market with 78% compared to IoS with slightly over 21% market share (GWI data, Q4 2022 data). 
TVs that can connect to the internet exceed 90%, and the number of OTT service users has already surpassed 25 million. According to e-marketer, the subscription OTT video viewers make up 13.6 million this year.
"OTT service platforms such as Netflix and personalised video content platforms like YouTube, which have become very popular especially since the pandemic, are still growing as the most popular media channels in South Korea," says Jaewoo Kim, executive media director, TBWA/Korea.
Gaming has a huge penetration of over 74% in South Korea and 9 out of 10 top paid apps and top grossing apps on Google Play store in the past one year are game related. 
Gaming has a huge penetration of over 74% in South Korea.
Regarding consumer behaviour, a staggering 25% of the population aged 16+ plays games daily, with many doing so on their smartphone (over 78%), followed by PCs (over 48%). 
Ad spend trends
Based on Statista, most digital ad spending is still driven by search, video, and banner advertising. While influencer marketing growth rates are declining since its massive growth in 2019 and 2021, double-digit growth of 15% is still expected this year
"As brands tend to shrink marketing spend and prefer performance marketing over brand marketing due to the financial recession, TV ad market shrank 30-40% in the first half of 2023," says Kim. "Digital media ad spend is in a relatively stronger uptrend, but equally, display ad focused on performance dominate the spend rather than video ad for branding." 
Based on Nielsen Korea, the biggest spenders on advertising across TV, radio, newspapers and magazines are financial, insurance and securities, followed by computer and telecommunication. Both sectors comprise 24% of advertising spending across 21 industries measured in 2022. This trend also continues in Q1 2023.  
"Overall ad spending in South Korea is rising across both digital and broadcasting media, reaching 8.023 trillion KRW and 4.242 trillion KRW in 2022, respectively," says Mali Wuestenhagen, senior director, strategy & planning at Assembly Korea.
"The rise is poised to continue to grow this year, with an estimated growth in digital of 10.2% and 6.6% in broadcast. The increase in digital is attributed to mobile ad spending investment, while desktop media across display and search has declined since last year."
Current attitudes towards digital and data privacy
Compared to the US and EU countries, government, corporates, and consumers in South Korea demonstrate less caution when it comes to digital and data privacy.
"Current regulations are also more focused on post management than prevention," says Kim. "However, with the attention ChatGPT  has attracted the focus has shifted towards reassessing legislation to protect personal information and privacy."
Regarding the exchange of data for free services, nearly 55% of Koreans are willing to do so. At the same time, the remainder are willing to pay for services in exchange for keeping personal data, with 39% stating that they prefer being anonymous. 
"Consumers' willingness to share personal data highly depends on what people get in return," says Wuestenhagen. "For example, for apps that track activities such as walking, sleeping, etc., nearly 30% are comfortable doing so."
"Cashwalk is a free popular Korean pedometer app. People earn money just from walking with the app,” adds Wuestenhagen. “It is designed to help users achieve fitness goals in an easy and fun way. On the Google App Store, it registered over 10 million downloads despite transparently mentioning that data is shared with other companies and may include using their device ID or other IDs for marketing or advertising purposes."
Are there any regulations and barriers (e.g. government laws, tech platforms) that marketers should pay particular attention to?
South Korea is governed by many regulations and policies regarding marketing and advertising. The Personal Information Protection Act (PIPA) imposes strict guidelines regarding collecting, using and storing personal information and requires marketers to obtain consent, provide notification and safeguard personal information. 
"Businesses must clearly explain the purpose of collecting personal data and obtain consent separately for each purpose," says Wuestenhagen. "Privacy notices that disclose the purpose of collection, types of information collected, retention period and third-party sharing are some details that need to be disclosed."
With the increase in the popularity of influencer marketing, it is essential to note that there are regulations in South Korea that require influencers to disclose any sponsored content or relationships with brands.
While South Korea is dominated by a handful of leading domestic walled garden publishers such as Naver and Kakao Messenger, the approval of 3rd party ad technology such as ad serving and ad verification is not explicitly supported.  
"This restricts 3rd party measurement to mainly click tracking only, which is often a significant barrier to international brands governed by internal measurement expectations," says Wuestenhagen. "Advertisers depend on publisher-provided data and available metrics that are limited compared to what is provided by 3rd party measurement."
Top 3 social networks
1. Kakao Talk 
2. Naver 
3. Instagram
"Naver and Kakao Talk messengers dominate the Korean market in market penetration, offering social and other functionalities," says Wuestenhagen. "When considering messenger apps as a social platform, Kakao Talk is by far the number one messaging platform in Korea, with over 76% of users using the app more than once daily."
"Regarding social media outside of messenger apps, Instagram is the number one platform with over 44% usage rate at least once a day, followed by Facebook with over 25%."
Top 3 shopping platforms
1. Coupang
2. Naver Shopping
3. 11th Street 
" is the largest player in the Korean e-commerce market, with over 124 million average monthly visits, followed by Naver shopping with over 70 million average monthly visits in the past three months," says Wuestenhagen. "Coupang’s dominance is mainly due to its fast delivery service, competitive pricing and a vast selection of products. At the same time, Naver Shopping, as part of the country’s largest search engine portal, allows consumers to find online/offline products, shopping information, conduct price comparisons and look for product reviews."
"The 3rd largest e-commerce player is 11th Street (11STREET), with over 42 million average monthly visits in the past three months and well known for being the best commerce portal providing video reviews and live broadcast. Amazon partnered with 11STREET to distribute its products and services on the platform through holding equity stakes offering more than 30 categories of products sold via the Amazon Global Store on 11STREET."
Top 3 apps
1. Raising a Girl Ghost: Light up the world
2.  Fantasy Master M 
3. Brides of Darkness
"The top 3 free apps in South Korea for the past six months are all gaming apps," says Wuestenhagen. "When it comes to the top 3 paid apps, gaming still dominates with arcade games such as Minecraft, Music games like A Dance of Fire, and sports games like Football Manager 2023 Mobile are taking the lead in the past six months in Korea. The top 3 grossing mobile apps are also within the gaming category, with Night Crows, Lineage M and Honkei: Star Rail dominating."
Examples of high-profile recent performance marketing campaigns
As demand for overseas travel this year has been booming, Korea’s top travel/accommodation booking service, Yanolja recently maximized their campaign efficiency.
The company focused their ad exposure to new audiences they found through prediction models based on machine learning, which led to a dramatic reduction of CPA.


Performance Marketing World

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