We interviewed the Head of Yeahmobi South Korea, Hanjoo Lee, on the South Korea digital market.
eMarketer, the market research company, named the top 10 fastest growing digital economies worldwide: India, China, Mexico, Russia and South Korea were on the list. The ranking is based on multiple criteria, including number of Internet users, number of mobile Internet users, digital retail buyers, ecommerce sales, etc. In South Korea, thanks to its booming digital economy, the mobile marketing field also sees a robust growth.
From 2015 to 2016, mobile ad spending in South Korea has grown 31.3%.
Would you please share your opinion on the current development status of South Korea’s mobile industry?
I think from the very beginning, Korean mobile content boom started with Kakao platform. With Kakao messenger and game platform rapidly gained popularity in the market, many entrepreneurs wanted a piece of the hot pie and dived into mobile content development and creation.
On top of this popular mobile platform, the hardware infrastructure was built to connect more users with best speed. Combination of a great platform and infrastructure allowed Koreans to build business for monetization. Mobile phones are particularly famous in Korea and abroad. Samsung Galaxy phone are well known brand, as they have invested heavily for long term business.
However, I do believe that Korean market needs to take more risks and broadens imagination. I believe we focused too much on what makes profits and not what makes life better in the long term. I strongly believe we have much to learn from other great nations such as China, United States and Japan. China is making great progress in mobile payment, ecommerce and shared economy and United States also pioneers in great areas to make world a better place, for a better life.
What about Mobile Internet in South Korea?
Korean mobile internet stems from online/PC internet connectivity. The internet connectivity in Korea is very strong and widely available, thanks to great efforts by telecom companies. With great infrastructure as a foundation, Korean companies were able to adopt new technology and speed early in the cycle, resulting top speed when it comes to data throughput. Korea had 4G LTE when other countries were still in 3G, and now KT(Korean Telco) has recently announced they’d adopt and commercialize 5G by 2019, which would be the first country to commercialize 5G, about a year ahead of competition.
With multi-band LTE widely available, stream watching videos and movies are commonly witnessed in subway trains, buses, and taxis. People consume music, games, mobile shopping, business conference calls and so much more. Anywhere + Speed allows such a rich internet experience, and this has big implications in people’s lives, both good and bad.
People being born in 2017 may not use and understand what PC is. Mobile devices are getting smarter, faster to replace many of the functions handled by the PCs in the last decade. Technological advancement has changed so many things in our lives, and more will come in the next decade. I believe Korea will still be in the top league when it comes to having rich mobile internet experiences.
Mobile marketers at a meetup event Yeahmobi recently organized in Seoul
Is the mobile marketing business mature in South Korean? What are the major models of mobile marketing there.
Mobile marketing business has close ties with mobile app economy. In Korea, much of mobile marketing focuses on gaming, as the ad spend for games has been on the rise. Unfortunately the mobile games industry suffering from a huge gap between companies who generate revenue and companies that doesn’t. Big name developers and publishers are generating big revenue, while small to medium sized developers are losing money.
Big companies continues to developer RPG games with “gotcha” elements, as these types of games generate the most amount of money especially when combined with well branded IP. The problem is that creating well branded RPG games requires substantial upfront investment, so small to medium developers are not able to deliver, creating the vicious cycle of ever growing revenue gap.
Mobile marketing has grown to fit the needs of those big companies with big flashy titles. They need volume traffic, in hope of catching big whale players. About 1% of the players tends to spend a lot of money, accounting for about 50% of the total revenue in some cases. So in hope of catching the whale players, big companies try to saturate all available marketing channels.
Typical scene with game launch include but not limited to, subway display banners (big monitor displays), subway screen door (another big montor display), Video trailers for cable and main TV channels, and performance marketing on social media marketing (Facebook, Google) and other AdNetworks.
In terms of the methodology, I think the mobile marketing business is maturing, as the app economy also matures. I’m not sure the app economy is “healthy” by any chance, but that’s how it’s grown to be: app discovery is very difficult, and requires big budgets to gain great volume of users. There are a few cases where small to medium sized developer see success when launching their title, but it’s very a rare case. Those game title tends to be very unique, with well crafted user experience that is boosted by viral activities but in any case, they don’t compete with big name RPG titles.
From 2016 to 2017, what are the trends of mobile marketing in Korean market? Is there any difference between Korean market and markets of other countries, like US, China, India?
I believe for 2017, performance marketing will continue to take a big role in acquiring volume of users in Korea. With tracking tools and analytics, mobile marketing is becoming more transparent and clients are able to measure more detailed in-app data. With more accurate measurement and reporting, the performance marketing continues to be a very efficient way to acquire the right users.
As for difference between other countries, I believe the gap is becoming smaller and smaller. As indicated above, Korean players spend a lot of money on well branded RPGs, so developers only tries to make those titles, skewing the categories and genres. However, I see much more variety outside Korea, in terms of type of genre and style of the titles which may have originated from cultural differences.
How will Yeahmobi conduct business in Korea? Who are the customer groups and what they need? How will Yeahmobi cater those needs?
Yeahmobi has started mobile marketing business in Korea just since last year. We have begun to work with companies that needs volume of traffic that engages well in their apps. Since a large part of the needs come from gaming industry, we’re serving those needs at the moment, but we’d like to expand into other verticals such as ecommerce and utilities.
We currently work with marketing agencies and some medium to big size developers, as the need for traffic volume is there. Fortunately, our clients are very happy with our performance and we hope to engage and expand Korea market with long term business approach. We will continue to provide the best quality of users by focusing on optimization and operations. To serve the needs better in the future, we also hope to acquire Korean local traffic to expand our presence in Korea and abroad as well.