A 15-second advertisement from an artificial intelligence (AI) startup featuring singer G-Dragon (GD) as a model is gaining popularity.
In this advertisement, uploaded to YouTube on 17th, GD says with a distinctive expression and pronunciation, “This is a Wrtn AI ad.” This advertisement, from the AI platform startup Wrtn Technologies, reached 7,486,603 views by the 30th, just 13 days after its release. Wrtn is being recognized for raising its brand awareness as an AI company through this advertisement.
Wrtn is a startup offering AI writing, search, and chat services and is currently experiencing rapid growth. Last year, it surpassed 5 million monthly active users and achieved a cumulative investment amount of 130 billion won.
Startups are hiring famous celebrities, known as so-called S-class superstars, as advertising models. In the past, large corporations with ample funds usually used famous celebrities as ad models, but now startups also choose high-profile celebrities to promote their businesses, implementing growth strategies. In the case of Wrtn, GD’s advertisement fee alone is reported to exceed 1 billion won.
◇ startups pledging growth by featuring superstars
The reason startups spend large sums on famous celebrity advertisements is that they can attract consumer interest in a short time through issue creation. Especially in the era of social network services (SNS), using famous celebrities can result in explosive viral effects.
The GD YouTube advertisement of Wrtn features predominantly positive comments such as “GD just said a word and it went viral,” “The ad is hip,” and “I want to use Wrtn AI too.”
The fact that startups can undertake expensive advertising activities is because they receive significant investment. However, they cannot spend freely. When startups make large expenditures, they often need to consult with and get approval from major investors.
A venture capital (VC) official noted, “When VCs invest in startups, they usually insert a pre-approval clause for the use of large investment amounts,” and added, “When it is deemed important to introduce the product to the market at the current stage of growth, using famous models for advertising is possible.”
An advertising industry official said, “The smaller the company size and the more popular the model is among the fandom, the more you can lower the model fee in advertising the brand.”
In the case of cosmetic startups emphasizing beauty, hiring famous celebrity advertising models is even more active. The beauty corporation APR, established in 2014, gained fame with its skincare device ‘AGE-R’ by hiring actress Kim Hee-seon as an advertising model from 2022. With this momentum, it was listed on the Korea Composite Stock Price Index (KOSPI) in Feb. 2024.
Another beauty corporation, d’Alba Global, teamed up with singer Lee Hyori last year to promote its brand, also getting listed on KOSPI last May. The two corporations are considered the most notable K-beauty companies that have grown from startups. Additionally, they have established the formula for cosmetics startups of “increasing performance through big model advertising.”
Changes in the advertising market, where celebrities directly operate YouTube channels to promote their favorite brands, are also a major factor in the selection of famous celebrity advertising models by startups. In such cases, celebrities are often involved in the business or directly invest in the startup.
◇ celebrities directly involved with investments... double-edged sword of superstar advertising
A new term, ‘celestor,’ combining celebrity and investor, has emerged.
Actor Son Suk-ku invested in the fashion brand startup ‘LERICI’ and took on direct promotion himself. He appeared in the 2022 drama ‘My Liberation Notes’ wearing a LERICI coat. Currently, LERICI’s website features photos of Son Suk-ku dressed in the company’s suits.
Actor Ryu Seung-ryong, participating as a shareholder in the startup investment and cultivation corporation Prain Hance, engaged in celestor activities by posting photos on social media of a visit to the store of SANNOLU, which produces and sells Jeju green tea and is an investment of Prain Hance.
There are also negative effects of advertisements featuring famous celebrities. If advertisements purchased at a high cost hit the market, they have a huge impact, but not all succeed. It’s the risk of big model marketing expense.
The luxury platform startup ‘BALAAN,’ which once gained attention through extensive advertisements featuring actor Kim Hye-soo, faced a crisis due to excessive marketing expenditure and sluggish luxury consumption.
Um Nam-hyun, a professor at Hongik University’s School of Advertising and Public Relations, said, “The risk is bound to be significant as much as the startup ventures into top-star advertising with large sums of money,” and added, “As startups still have low brand recognition, there are many cases where the public remembers only the celebrity after an advertisement featuring a famous celebrity.”
Professor Um also explained, “Startups should consider showing innovative products and services creatively through advertising and impressing them on consumers.”