The advertising model market in the distribution sector has opened. This is due to an increase in companies seeking to reselect their models as contracts expire. The criteria for selecting models have also changed somewhat compared to the past. Rather than selecting top star models that require high fees, advertisers are increasingly looking for advertising models that can elicit positive consumer responses, even if they are less costly.
In the distribution industry, it is interpreted that companies need to achieve results this year as they did last year while considering cost-effectiveness in their model selection criteria.
According to the distribution industry on the 17th, Jeju Samdasoo has ended its advertising model contract with trot singer Lim Young-woong and is looking for a new model. Until now, Jeju Samdasoo frequently used top star celebrities as models to maintain its image as the number one company in the bottled water market. Prior to trot singer Lim Young-woong, they had a contract with singer IU.
However, the advertising model being sought this time is somewhat different. Until now, a single model was selected to showcase a model-centric advertising strategy, but now there are plans to shift direction towards empathetic advertising that encourages consumer participation. There are thoughts of selecting several individuals who are popular and well-liked on social media.
The distribution industry believes that Jeju Samdasoo will incur less expense even if it presents several models instead of Lim Young-woong, as his fee soared to surpass that of national MC Yoo Jae-suk as of 2020. It is reported that using Lim Young-woong as a model would have required an annual fee of approximately 500 million won based on 2021. The market share of Jeju Samdasoo, the number one brand in the bottled water market, is slightly over 40%. However, as competition with latecomers intensifies, there are situations where the market share falls below 40%.
An official in the distribution industry noted that “in the past, using Lim Young-woong as a model directly increased sales,” but added, “now, considering his dramatically increased fee, it is difficult to feel the same level of impact. As recent domestic sluggishness deepens, advertising expenses are also becoming a target for tight budgeting.
Recently, actor Kim Soo-hyun has become embroiled in a scandal, causing changes in the advertising market. Companies that Kim Soo-hyun was associated with are taking actions such as not renewing advertising contracts. A representative example is CJ Foodville. CJ Foodville’s Tous Les Jours has announced that it will not seek to renew its contract with Kim Soo-hyun ahead of its expiration in mid-month. It is known that the series of rumors circulating recently have been burdensome for Tous Les Jours, which needs to explore overseas markets.
CJ Foodville has not yet decided on a successor model to Kim Soo-hyun, but it is reported that they are comprehensively reviewing individuals who can appeal attractively to consumers in both domestic and foreign markets, as well as emerging new figures. Actor Kim Soo-hyun has also recorded a high fee as an advertising model, signing contracts at an average level of 700 million to 1 billion won a year, with the fee sometimes exceeding 1.5 billion won depending on the circumstances.
In anticipation of summer competition in the bibim-myeon market, national MC Yoo Jae-suk, who has been with Baehongdong since its launch, is also waiting to hear about the renewal of his advertising contract. Last March, Baehongdong extended its advertising contract with Yoo Jae-suk for one year. A Nongshim official stated, “Nothing has been specifically decided yet.”
There are also many cases where advertisers desire more favorable and active models. If the fee is too high, advertisers often impose much stricter conditions when signing contracts. Typical conditions include, “I will participate in brand advertising, but not in product advertising” or “I do not request exposure on personal social media.” In the case of favorable advertising models, they may voluntarily expose products they are advertising in photos taken of them on their way to work and actively participate in events outside of the contract.
However, for top-tier models, the busy schedules often complicate contract wording with their agencies, making such coordination itself not easy. Baek Kyung-hoon, president of Jeju Development Corporation, publicly stated during a press conference for its 30th anniversary that “Lim Young-woong has many advantages, but he has a disadvantage,” noting, “It is difficult to shoot in Jeju due to his packed schedule.”
The distribution industry also sees advertising expenses themselves as targets for saving. It is focusing on devising ways to achieve similar effects without using top-tier models. This is because there is a small chance that revenues will significantly grow regardless of which model is used, and in such a scenario, they believe it is necessary to cut expenses to increase profits.
An official from an advertising agency said, “There is a lot of interest in who will fill the void left by actor Kim Soo-hyun, with the general sentiment among advertisers being ‘new figures with lower fees.’” They added, “It might be something that has always existed, but recently, the demand for models with good cost-effectiveness has intensified compared to the past.”