With around 90 per cent of its population of 50 million online and a rapid rise in adoption of smart phone technology, South Korea is a world leader in digital. This could be down to the fact that 81 per cent of its population is urban. Average broadband speed per member of the population stands at 12mbps – compared to a UK average of 3mbps.
This strong digital infrastructure and a propensity towards new technology makes the South Korean comms market an online-rich environment in which to operate.
Chris Lankester, president North Asia, Edelman says: ‘Social and digital media have become particularly noteworthy and we are seeing information consumption evolve away from traditional media.’
‘Microblogging sites such as Twitter, and the local Me2Day, have become important assets to both corporations and traditional news outlets.’
These developments in the world of new media are also having an impact on the share of the market currently held by PR. Aedhmar Hynes, global CEO of Text 100 which has interests in the area, says: ‘The sudden growth of online media represents a news business opportunity for PR agencies as long as they are successful in adapting themselves to this new environment.’
However, public relations agencies still have a fight on their hands for budgets. Advertising takes the lion’s share due to the corporate sector’s opinion of perceptions of PR according to Sung Bin Jang, executive director at Ketchum Pleon agency Prain. However he adds new media may help the PR industry overtake advertising in terms of profitability.
Tyler Kim, MD, Weber Shandwick Korea believes as much as 80 per cent of the media’s revenue still comes from advertising, adding that the influence of ad revenues’ influence over editorial ‘often results in distortions of coverage which have been loaded by media buying power, influencing editorial media coverage and attitudes.’
It is perhaps this perceived lack of integrity in the communications sector that goes some way to explaining a continued loyalty towards advertising in South Korea by major corporate clients.
The key broadcast channels in South Korea include government owned KBS, sports focussed SBS and current affairs led MBC.
Chosun Ilbo is the leading daily print news source, with a circulation of around 2.6 million readers, followed by Joongang Ilbo and Donga Ilbo.
Traditional media took a sharp downturn between 1996 and 2008, with a decrease in newspaper consumption from 69 per cent to 37 per cent, creating a rise in media outlets using new media channels.
The rise in digital media appears to be one of the major stories, as in many global markets, of the past 12 months.
Twitter saw a surge in growth of 1,900 per cent between May 2009 and May 2010.
Kim believes that increased transparency and interconnection of networks has also allowed media relations to grow within the online landscape.
However editorial output, according to Kim, demonstrates a lack of change in the media sphere.
‘As further proof that not everything has changed, the stance of editorial media can still be widely influenced by ad revenues.’
Technology and telecommunications brands are the market leaders in South Korea, with Samsung, LG and HP leading the field.
Local telecommunications firms SK Telecom and Korea Telecom are also ahead of the curve.
Hynes says: ‘The key Bellwether brands in South Korea are the telecommunications companies which provide services for the general public. They spend millions of dollars on advertising and other forms of marketing communications.
‘There are many reputation challenges facing these companies, but they seem to manage them fairly well.’
Jang and Joyce agree, suggesting that for the major brands it is vital to demonstrate social responsibility and market commitment to maintain reputation.
Kim adds: ‘The consensus view is that companies need to be supported by society to be successful but in return they are expected to make substantial contribution back to the good of society as a whole.
‘Generating and maintaining the reputation of "contributor" is a critical challenge for companies.’
The major global agencies dominate the Korean market, with Edelman, Weber Shandwick, Ogilvy and Prain factoring into that group.
There are around 600 agencies operating in the South Korean media space and these seem to be split between the very large global and the small ‘boutique’ agencies.
Jang says: ‘There is a bipolar dynamic happening where firms are either large, full-service agencies or small specialised agencies. Medium agencies have to decide which way to go.’
Kim Joyce, MD and VP, Ogilvy Public Relations Worldwide adds: ‘Around 90 per cent of the agencies in South Korea are local. The large local agencies have established strategic partnerships with global agencies.’
Lankester goes someway to explaining this bipolar tendency in the industry saying: ‘Local and international firms both compete and co-operate: it is not unusual to see a local firm appointed to domestic communications and an international firm for international work.’