Understanding Korean Magazine Advertisement Market T o B e P r - - PowerPoint PPT Presentation

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Understanding Korean Magazine Advertisement Market T o B e P r - - PowerPoint PPT Presentation

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Understanding Korean Magazine Advertisement Market T o B e P r e s e n t e d a t F I P PS e o u l C o n f e r e n c e 2 0 0 2 o n A p r i l1 8 t h Jaekook Chun CEO & President SIGONGSA, Korea 1

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Understanding Korean Magazine Advertisement Market

Jaekook Chun

CEO & President

SIGONGSA, Korea

T

  • B

e P r e s e n t e d a t F I P PS e

  • u

l C

  • n

f e r e n c e 2 2

  • n

A p r i l1 8 t h

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Ⅰ. Magazine Industry : an overview Ⅱ. Magazine Advertisement Market Ⅲ. Buyer Side of Magazine Advertisement Ⅳ. Advertisement Sales Forces Ⅴ. New Challenges

Contents Contents

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Ⅰ Ⅰ. . Magazine Industry : an overview Magazine Industry : an overview

1. Market Entry Was limited Prior to 1987 ( For local Publishers ) Government regulation was lifted in 1987 Number of published Magazines increased and diversified.

  • 572

3,129

`96

  • 172

2,289

`99

194 2,483

`2000

  • 402

2,461

`98

  • 266

2,863

`97

334 3,701

`95

310 2,672

`91

236 3,146

`93

221 3,367

`94

238 2,910

`92

changes Number of registered magazines

year

Fig 1 : changes in number of registered monthly magazines(By year end)

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Ⅰ Ⅰ. . Magazine Industry : an overview Magazine Industry : an overview

2. Emergence of International Brand magazines.

Due to continued economic growth and socio-economic changes, international brand products have increased their market share. Korean government joined OECD in 1996 Foreign investment for periodicals publishing house was allowed up to 50%. Licensed magazines launched after 1990

Elle ------------------------------------------------------------------- 1992 Marie Claire ------------------------------------------- ------------ 1993 VOGUE, BAZAAR ------------------------------------------------ 1996 Madame Figaro, Deco Figaro, anan, Cosmopolitan ------ 2000 L`’official ------------------------------------------------------------- 2001 VOGUE girl, 25ans ----------------------------------------------- 2002 Elle Girl -------------------------------------------------Expected in 2002

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Ⅰ Ⅰ. . Magazine Industry : an overview Magazine Industry : an overview

3. Summary

The number of registered monthly magazine reached its peak in

  • 1995. But, it has never been fully restored ever since.

Number of magazines with more than 20,000 USD monthly ad revenue is 50+ (Out of some 2000 more). The relative importance of international brand magazine has increased significantly in the korean market. New magazines new threat for local publishers pressure to change fundamentals

  • Higher Editorial Standard
  • challenge generally accepted practices
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Ⅱ Ⅱ. . Magazine Advertisement Market Magazine Advertisement Market

Fig 1. Magazine Advertisement Revenue by Year

Before the national financial crisis : Total Size was 213 BKW(168M USD) During the crisis : `97 -> `98 51.9% Reduction 99 -> Present Slow recovery For year 2002 : Expected to grow at 20~30% 5 1 , 1 , 5 2 , 2 , 5 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2

  • 51.9
  • 51.9

26.9 26.9 25.7 25.7

  • 4.3
  • 4.3

20~30 20~30

2,000 (expected) 1,563 1,634 1,300 1,024 2,130 (Unit : 100mkw)

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7 1 3 2 4 rank

  • 51.9%
  • 36.8%
  • 40.7%
  • 33.7%

% change 2,130 21,261 2,314 15,477 1997 1,024 13,437 1,372 10,261 1998 Magazine Newspaper Radio TV media 4 2 3 1 rank 26.9% 34.4% 27.6% 45.4% % change 1,024 13,437 1,372 10,261 1998 130,028 1,805,462 175,121 1,492,122 1999 Magazine Newspaper Radio TV media

TV > Newspaper > Radio > Magazine seems to be the revealed preference by advertisers. Fig 2 Advertisement Spending for 4 major media Fig 3 Advertisement Spending for 4 major media

(Unit : 100mkw) (Unit : 100mkw)

Ⅱ Ⅱ. . Magazine Advertisement Market Magazine Advertisement Market

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Ⅲ Ⅲ. . Buyer Side of Magazine Advertisement Buyer Side of Magazine Advertisement

100 . . . 2.8 2.9 3.9 4.6 5.6 5.6 11.2 13.1 16.6 22.3 % 163,367 . . . 3.5 3.6 4.9 5.7 6.5 7.0 14.1 16.4 20.8 27.0 spending Distribution Electronics Beverage Food Pharmaceutical Home Appliance Tourism & service industry Computers & Telecomm. Cosmetics & Health products Fashion & Garment Industry . . . 10 9 8 7 6 5 4 3 2 1 rank

78.6 125.1 128.1 131.8 145.4 154.7 244.1 495.5 515.9 726.9 revenue McCann-Erickson Well Comm Phoenix Comm Korad TBWA Korea Oricom DaeHong KumGang LG AD Cheil Comm company 10 9 8 7 6 5 4 3 2 1 rank

  • 1. clients
  • 2. Agency

(Unit : M USD) (Unit : M USD)

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3. Who is the real decision maker : Client vs Advertising Agency Smaller Companies tend to play bigger role. Client/Agency relationships are different for each category

  • f a magazines.

Small agencies play more important role than these top 10 agencies in magazine industry. 4. Factors affecting Decision making process : General Brand Image human relationships Scientific Data Promotional Incentives (i.e., Discounts)

Ⅲ Ⅲ. . Buyer Side of Magazine Advertisement Buyer Side of Magazine Advertisement

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Ⅲ Ⅲ. . Buyer Side of Magazine Advertisement Buyer Side of Magazine Advertisement

  • 5. Relative Importance

(4) Promotional Incentive (3) Scientific Data (1) Human Relationship (2) General Brand Image

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  • 6. Case Study

Ⅲ Ⅲ. . Buyer Side of Magazine Advertisement Buyer Side of Magazine Advertisement

G F E D C B A 1,800 342,307 2.2 7.0 40,000 2,100 447,692 2.1 7.0 40,000 3,000 673,846 4.9 7.2 70,000 Local Magazine 2,700 541,153 0.4 4.6 35,000 2,300 413,076 0.9 2.3 21,000 3,100 788,461 0.7 6.7 38,000 3,000 847,692 1.6 5.1 36,000 License Magazine Average Ad. price Monthly revenue Sub - scription rate Readership rate Circulation name

Fig 1 Relationships between Ad. Price, Circulation, Readership rate, Subscription rate

(Unit : USD, Date Provided by Korea Marketing Research) Average Ad. Price does not reflect objective Research data in a systematic way.

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Ⅲ Ⅲ. . Buyer Side of Magazine Advertisement Buyer Side of Magazine Advertisement

  • 7. Summary

Human Relationship is still a very important factor affecting Ad buying/Selling decision making process. Due to the changes in market structure induced by the emergence of International brand magazines. There are increasing pressure to justify Ad spending by some kind of scientific data. General Brand Images are very important. Developing & Maintaining positive brand value poses new challenges for publishers.

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Ⅳ Ⅳ. . Advertisement Sales Forces Advertisement Sales Forces

1. Over 90% are male in their early 30s 2. Females not been very active for the last 10 years (no changes) 3. Average job experience is about 5-7 years (Mostly Junior staff) 4. Limited opportunities for proper training 5. High turn over rate.

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Ⅴ. Challenges for Magazines

Notable Factors : 1. Relative importance of the advertisement market for printed media seems to be declining.

  • 2. New Media's importance is increasing.

Market for magazine advertisement not grown much for the last few years.

Media 1997 % 1998 % 1999 % 2000 % TV 15,477 28.8 10,261 29.4 14,921 32.3 20,686 35.3 Radio 2,314 4.3 1,372 3.9 1,751 3.8 2,503 4.3 News paper 21,261 39.5 13,437 38.6 18,054 39.1 21,214 36.2 Magazine 2,130 4.0 1,024 2.9 1,300 2.8 1,633 2.8 cable 1,282 2.4 1,166 3.3 1,281 2.8 1,736 3.0 internet 380 0.7 537 1.5 812 1.8 1,360 2.3 Total 53,769 100% 34,846 100% 46,205 100% 58,534 100%

( U n i t : 1 m k w )

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Challenges Korean magazine ad market still has more growth potentials.

% of Total Ad spending on Magazines Japan 9.7% Taiwan 10.5% HK 13.4% China 2.7% Singapore 4.6% Korea 2.8%

Missions

  • Creative contents with competitive advantage
  • Develop more efficient sales tool
  • Improved training for sales forces
  • Demonstrate "our value"

Ⅴ. Challenges for Magazines

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Thank You! Thank You!