As corporations focus on optimizing marketing budgets amid a recession, the advertising market is also freezing. The case of the comprehensive advertising agency D'Blent, which was among the top 10 in the country but fell into bankruptcy, illustrates this point. However, the outdoor advertising market, which is being reborn with technology, remains vibrant and is attracting attention.
According to the '2023 Outdoor Advertising Statistics' published by the Korea Local Finance Association on the 27th, the domestic outdoor advertising market is estimated at 4.2 trillion won (based on 2022).
The outdoor advertising market is growing at a compound annual growth rate (CAGR) of 7.3% since 2017, merging with digital. In particular, the digital outdoor advertising market reached 1.2 trillion won in 2022, illustrating significant growth.
This trend is similarly observed globally. According to the global market research firm Statista, the global digital outdoor advertising market is expected to grow nearly twofold from 2020, reaching $16.6 billion (approximately 24 trillion won) by 2027.
Until now, outdoor advertising has faced challenges in exposing one-way advertisements to an unspecified mass, making targeting and performance measurement difficult. However, with the advent of the endemic era, it is experiencing a transformation through programmatic technology.
Programmatic technology automatically connects advertisers and sellers, allowing for the setting of targets and displaying ads at suitable locations and times. This is achieved by applying technologies such as machine learning and big data analysis.
Unlike mobile or web advertising, outdoor advertising can communicate with many at once. The emergence of various display technologies, including large screens and vertical or curved formats, has also contributed to this attention.
From the advertisers' perspective, digital outdoor advertising is recognized as a medium that allows real-time ad modifications and effective results with relatively low advertising expenditure. Moreover, the ability to target and measure performance, which was considered a critical weakness of outdoor advertising, now enables campaign development in conjunction with other media.
This is made possible by technologies such as 'gaze tracking analysis technology,' which confirms ad attention through eye movement; 'geofencing,' which detects users entering specific locations based on location information and delivers customized ads; and 'Dynamic Creative Optimization (DCO)' technology, which adjusts advertising materials in real-time according to conditions such as weather, temperature, and traffic.
Additionally, the government's designation of areas in Myeongdong and Gwanghwamun in Seoul, as well as Haeundae in Busan, as the second phase of 'free advertising display zones' is also a positive development.
Free display zones allow for reduced regulations on the shape, size, color, and installation methods of advertisements, permitting free installation of outdoor ads. Notable examples include Times Square in New York, Piccadilly Circus in London, and Dotonbori in Osaka, Japan. In Korea, the COEX in Gangnam was designated as the first free advertising display zone in 2016.
As the digital outdoor advertising market grows, existing advertising companies are viewing it as a new growth engine.
Hyundai Motor Group's comprehensive advertising agency Innocean has secured media operation rights in key areas such as Gangnam (The Monte Gangnam), Banpo (Shinsegae Gangnam Central City), Yeouido (IFC Mall), and Myeongdong (Shinsegae Square), being selected as the operator of the 'Jung-gu' free advertising display zone. Other companies, including Lotte Group's Daehong Planning and DMC Media in Haeundae, were also listed.
Among startups, there are companies like D'Shine and ADDD, which feature mobile digital outdoor advertising. Programmatic digital outdoor advertising operator Infinite C owns approximately 5,200 advertising spaces centered around the metropolitan area, including subway stations, electronic billboards, and convenience stores, and is expanding.
CJ ENM's Mezzomedia noted in its recent trend report that 'digital outdoor advertising provides enjoyment through large screens, allowing for customized ads based on interests and movement routes,' adding that 'if online and offline advertising media are appropriately integrated this way, advertising fatigue can be reduced while maximizing conversion rates.'
According to a report by the Outdoor Advertising Association of America, 76% of consumers reported taking purchase actions after seeing digital outdoor advertisements.