[Market&Industry] Why Did Korea's Mobile DA-only Spending Shrink?

South Korean advertiser’s spending on mobile display ads (DA) accounted for about 79.6 billion Korean won (65.7 million USD ), up 1.7 percent compared to May, according to the latest Research Ad’s July 2019 Report.

The amount was 51.3 billion won in June 2018. That’s a huge leap in one year. But it gets more interesting. Last year in June, there were advertisers who spent only on mobile DA and the amount accounted for 13.8 billion won, making up 26.8 percent of the whole mobile DA spendings. This year, the amount fell to 12.9 billion won, accounting for only 16.2 percent.

Here are some ideas on why this may have happened:

“Fraud is the biggest dragon to slay in the mobile marketing world and the enemy is getting stronger each day,” Jianna, marketing manager at Buzzvil, said. “With the attribution tools getting better, marketers are using them to fight the enemy. They are spending their money wisely. These tools help them to test on multi-channels and optimize their campaigns to get higher returns.”

Heizel, ads operator at the Softbank-backed startup, also had a theory. She said, “Between 2017 and 2018, it was a really good year for the game industry. And advertisers were spending almost all of their budgets on mobile display ads and they didn’t find the need to advertise on television or other media. But if you see the numbers, the game companies in Korea are spending less on mobile DA recently.”

Stephan, global business development manager, added, “As the game industry lost its mojo, the 3Ns (Nexon, NC, Netmarble) were the major ones who survived. They have enough resources to aggressively pursue influencer or celebrity marketing and video ads that are recently dominating the market. Now I turn on the television or go on YouTube, I see popular actors selling new games every day. It wasn’t really like that before. Advertisers used to 30 to 40 percent of their budget on NCPI campaigns, but now that is not the case.”

What insight can we earn from this? We can learn that in order for the adtech industry to survive we have to make sure our partners and advertisers get accurate figures from us so marketers can make good decisions to find ways to connect with users.

Meanwhile, the Research Ad report stated that among the mobile platform players this month, Softbank-backed Buzzvil ranked in fourth place in terms of how much advertisers spent and in fifth place in terms of how many brands spent on the platform.