Outdoor Advertising Thrives Amidst Economic Downturn in South Korea
On April 15, at 3 PM, a group of foreign tourists was spotted taking photos at Gwanghwamun Square in Seoul, but their choice of backdrop was unusual. Typically, visitors capture the iconic Gyeongbokgung Palace and Bukaksan Mountain, but this group opted for the massive digital billboard on the side of the Koreana Hotel. Amir, a 36-year-old from the United Arab Emirates, expressed his desire to have the enormous screen, measuring 22 meters wide and 60 meters tall (approximately 1,300 square meters), in his photo. He remarked, 'You can see the billboard from anywhere in Gwanghwamun Square. I've been to Times Square in New York, but this feels even more overwhelming.'
Despite a stagnant advertising market due to economic challenges, outdoor advertising is experiencing a rare growth spurt. This surge is attributed to advancements in high-definition displays and the successful integration of information and communication technologies like big data and artificial intelligence, which have transformed outdoor advertising into a dynamic medium. The government is expanding 'Free Display Zones' for outdoor advertisements, aiming to create landmarks akin to New York's Times Square, London's Piccadilly Circus, and Osaka's Dotonbori, which is expected to further accelerate the growth of digital outdoor advertising.
Since 2017, the outdoor advertising market has been growing at an average rate of about 7% annually. According to the '2024 Outdoor Advertising Statistics' published by the Korea Local Finance Corporation's Outdoor Advertising Center, the market size surpassed 4 trillion won in 2022 and is projected to reach 4.3 trillion won in 2024.
Digital outdoor advertising is particularly thriving, with revenues reaching 1.2862 trillion won in 2022, marking a 33.9% increase from the previous year and surpassing the 1 trillion won mark for the first time. In 2023, revenues further increased to 1.5072 trillion won, leading the overall growth of the outdoor advertising sector. This trend is mirrored globally, with Statista forecasting that the global digital outdoor advertising market will double to $16.6 billion (approximately 24 trillion won) by 2027 compared to 2020.
Traditionally categorized as 'legacy media' alongside print and broadcast advertising, outdoor advertising has evolved into an innovative new media through the adoption of programmatic technology, overcoming previous limitations in targeting and performance measurement. An industry insider explained, 'Programmatic technology utilizes machine learning and big data analytics to set advertising targets, employing eye-tracking analysis to gauge ad attention and dynamic creative optimization (DCO) to adjust ad content in real-time based on weather and traffic conditions. This allows for tailored advertising that fits the time, place, and situation (TPO).'
A marketing executive from a domestic cosmetics company noted, 'We launched digital outdoor advertising near our store in Hongdae, and it directly boosted customer traffic. The advertising costs are relatively lower than other media, and adjustments are easy, making it cost-effective.'
CJ ENM's Mezzomedia recently highlighted in a trend report that digital outdoor advertising not only provides entertainment through large screens but also allows for customized ads based on interests and foot traffic. By effectively merging online and offline advertising media, it can reduce ad fatigue while maximizing conversion rates.
The era of outdoor digital billboards is upon us, bolstered by the government's designation of areas like Gwanghwamun, Myeongdong, and Haeundae in Busan as the second phase of 'Free Display Zones' for outdoor advertising. This trend involves significantly relaxing regulations on the shape, size, color, and installation methods of outdoor advertisements to create world-class tourist attractions.
Since the first Free Display Zone was established in the Gangnam COEX area in 2016, over 20 diverse outdoor advertisements have been installed and are currently operational. However, concerns about 'light pollution' remain a challenge to address.
In Gwanghwamun, in addition to the Koreana Hotel, companies like KT, Kyobo Life, Dong-A Ilbo, Sejong Center for the Performing Arts, and Donghwa Duty-Free are reportedly installing or considering digital outdoor billboards. In a few years, this area could resemble a tourist hotspot filled with large digital screens like Times Square. An industry expert stated, 'This trend will not only increase outdoor advertising in designated Free Display Zones but will also have a ripple effect in other areas.'
