Will It Improve When It Gets Colder?.. Advertising Market in the Fog

[Asia Economy Reporter Hwang Junho] It is forecasted that South Korea's advertising market may finally stretch its limbs with the arrival of the winter season. There is an expectation that companies will increase their advertising expenditures ahead of the seasonal transition.

However, tension is mounting as confirmed cases of the novel coronavirus continue to surge. The shift to level 3 social distancing and the spread of COVID-19 raise concerns that the consumption downturn could lead to a reduction in corporate marketing activities.

September Advertising Outlook at 110.8

The September Advertising Business Outlook Index announced by the Korea Broadcast Advertising Corporation (KOBACO) on the 27th stood at 110.8. Among 492 top companies based on total advertising expenditures across major media such as newspapers, if more companies plan to increase their advertising budgets, the index appears above 100; if more plan to reduce, it falls below 100.

In September, more companies responded that they intend to increase their advertising spending. In particular, the advertising outlook for the clothing and footwear sectors aiming to capture the winter season demand was 150. Marketing expansions were also expected in home appliances and daily necessities (128.6), as well as medical products and services (114.6).

Concerns over Negative Impact Due to COVID-19

The outlook index surpassing 110 is the first time since March. However, it remains uncertain whether companies will actually increase their advertising budgets.

In March, although positive forecasts were made, the trend index was only 97.4. Due to the rise in COVID-19 cases starting in February, consumption froze, resulting in a vicious cycle of declining corporate performance, reduced marketing activities, and decreased actual advertising expenditures.

Similar results are expected next month. KOBACO stated, "With the recent rapid deterioration of the domestic COVID-19 situation and the implementation of level 2 social distancing measures, there are concerns that the advertising market, which was expected to revive, may be adversely affected." This survey was conducted from the 1st to the 14th of this month. The spread of COVID-19 following the August 15th downtown rallies was not reflected in the index.

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