'The Power of Video' Digital Advertising, 5 Trillion Won Industry Growth... Market Share Enters 40% Range

Cheil Worldwide "2019 Advertising Market, 2.3% Growth Compared to Previous Year"
Digital Advertising Growth on Both Mobile and PC Despite Economic Slowdown
Digital Advertising Grew 15% Last Year... 1 Trillion KRW Net Increase in One Year

[Asia Economy Reporter Cha Min-young] The digital advertising industry, centered on cutting-edge video technology, has experienced explosive growth, expanding into a 5 trillion won industry. The share of advertising expenditure has also surpassed 40% for the first time, outpacing traditional media such as TV, radio, IPTV, and print media, and continues to grow.

Cheil Worldwide announced on the 12th that the total domestic advertising expenditure in 2019 was recorded at 11.9747 trillion won, a 2.3% increase compared to the previous year. This growth is attributed to the high growth of the digital advertising market centered on mobile and PC, despite the economic slowdown.

The digital advertising market grew by 15% year-on-year, surpassing 5 trillion won for the first time in history. It took only one year to exceed 4 trillion won in 2018. The share of the total advertising market also increased from 37.5% in 2018 to 42.2% in one year. With the introduction of 5G technology enabling high-quality data transmission in a short time, video advertising increased, and advertisements incorporating high-spec technologies such as artificial intelligence (AI), augmented reality, and virtual reality (VR·AR) gained popularity.

A notable feature is the simultaneous growth of mobile and PC advertising. Mobile advertising expenditure grew 17.2% to 3.2824 trillion won. Search advertising grew 9.8% with the launch of various advertising products such as 'shopping search.' Exposure-type advertising centered on video ads grew 26.5%, supported by the expansion of 5G coverage. Conversely, PC advertising expenditure, which had recorded negative growth annually since 2014, turned positive last year with an 11.2% increase. Due to the continuous influx of advertisers in shopping sectors such as e-commerce, search advertising and exposure-type advertising grew by 7.9% and 16.6%, respectively.

On the other hand, traditional media such as terrestrial TV, cable and comprehensive programming channels, and radio continued a sluggish trend for three consecutive years. The market size shrank by 7% year-on-year to 3.6905 trillion won. Terrestrial TV advertising expenditure showed the largest decline rate (-15.3%) among all media, recording 1.1958 trillion won. This is attributed to the absence of favorable events like the 2018 Pyeongchang Winter Olympics and the Russia World Cup, combined with domestic economic slowdown and the failure to introduce mid-roll advertisements. Not only did the negative growth continue, but the share of these broadcasting advertising markets also decreased for three consecutive years, barely maintaining the 30% range. The share fell by 3.1 percentage points from 33.9% in 2018 to 30.8% last year.

The cable TV and comprehensive programming channel advertising markets, which had grown over the past two years, decreased by 2.1% year-on-year to 1.9477 trillion won. In contrast, IPTV advertising expenditure grew 6.7% due to an increase in subscriber households and expansion of real-time advertising product sales. In the print advertising market, newspaper advertising expenditure decreased by 2.1% to 1.3997 trillion won, and the magazine advertising market shrank by 8.1% to 283.2 billion won due to media closures. The out-of-home (OOH) advertising market was recorded at 1.038 trillion won, similar to the previous year. Outdoor advertising expenditure increased by 10.1%, while transportation advertising and cinema advertising decreased by 4.5% and 3.2%, respectively.

Meanwhile, the domestic advertising market in 2020 is expected to grow 5.5% year-on-year to 12.6284 trillion won, supported by the Tokyo Olympics and general election issues despite global economic recession and domestic economic slowdown variables. In particular, the digital advertising market is expected to see the launch of various advertising products incorporating advanced digital technologies. Mobile advertising expenditure is expected to record double-digit growth, with its overall share approaching 30%.

Along with favorable factors such as the Olympics and general elections, broadcasting advertising is also expected to turn positive due to increased broadcasting advertising expenditure caused by the impact of the novel coronavirus. The OOH advertising market is expected to see increased growth compared to the previous year due to the emergence of new digital outdoor media and the digital transformation of existing outdoor media.

This content was produced with the assistance of AI translation services.