It’s been a little over a year since Hyun Tae Lim took the helm as GM at Isobar Korea. This after a 4-year stint as Chief Content Officer and Head of Digital at Carat Korea. Branding in Asia recently asked Lim about the first year at his new post in the Dentsu Aegis Network, content changes in the Korean market and global brands competing against local players.
You took the GM role at Isobar Korea just a little over a year ago. What’s your assessment of the past year for yourself and the agency?
As a new player in the local digital market, Isobar Korea wanted to establish a strong presence with our unique vision of unlocking the potential of brand commerce – we operate in an increasingly convergent world where the integration of a brand’s narrative, customer experience and commercial transactions are more entwined in the physical and virtual space than ever before – resulting in every brand’s customer touch points offering an opportunity not only to engage but transact.
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We focused on two key areas which were, designing a new approach to content and strengthening our brand commerce consulting capabilities. This involved the roll out of several key initiatives which included establishing a special content team comprised of planners and creatives, implementing data-driven content creation, utilizing the latest technology through our Isobar Innovation Labs, and leveraging the Dentsu Aegis Network by applying our brand commerce framework to existing DAN clients.
All in all, I would say that the strategy we employed resulted in Isobar Korea expanding its client portfolio and experiencing strong double digit revenue growth as compared to previous year.In adopting the global vision, and taking into account our market landscape, we decided that our key objective was to position Isobar as a leading brand commerce in Korea.
Previously you were Chief Content Officer at Carat for four years. What are some of the big changes you’ve seen in content in the Korea over the years?
As Chief Content Officer of a media agency, I was focused on planning content marketing strategy from the media perspective which is different from the typical creative’s point of view. This required a new way of approaching content ideation and creation rather than the usual way of ‘One Source, Multi Use’.
When you consider the higher smartphone penetration and much faster mobile internet experience, the Korean market can play an important role as a test bed market due to the relatively short time period needed and lower cost compared to bigger markets.
During the process of creating branded content production and content co-creation, I experienced various changes on content consumption behavior in Korea.
In terms of media, the influence of terrestrial TV which had previously dominated in Korea, saw a decrease. Meanwhile, we saw expanding reach of Facebook’s video consumption, with content accessed from a mobile accounting for more than 90% of total consumption in Korea. In addition, as Smart Media Rep (SMR) – a coalition of seven broadcasting companies for online streaming – strengthened its positioning, the volume of YouTube consumption decreased slightly and these changes led YouTube to position itself as media for engagement rather than reach in Korea.
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With the popularity of platforms such as Afreeca TV (a local peer-to-peer video streaming site), consumers could enjoy video content created by individual media producers (or Broadcasting Jockeys as they are commonly known). This has given rise to a new business model through Multi-Channel Network platforms such as DIA TV, Dingo TV, and 72second TV.
The revenue structure of these content providers is not fully formalized as yet. But these changes will be an ongoing assignment for brands that need to attract attention and increase engagement by delivering various contents corresponding to the current consumer content consumption which is not of the traditional advertising model of yesterday.
What are some challenges marketers with foreign based brands face when entering the Korean market?
I think the unique characteristics of the Korean market are well known, though looking at the size of the market in scale, some global companies might think that it is of no great significance. But when you consider the higher smartphone penetration and much faster mobile internet experience, the Korean market can play an important role as a test bed market due to the relatively short time period needed and lower cost compared to bigger markets. Because of these advantages, I think many global companies would be interested in entering the Korean market.
I have seen cases of companies struggling or having to withdraw from Korea even though they were successful in other markets. There have also been cases of global brands that failed even when they entered the market with a Korean vendor or distribution partner to help them better understand the market. This trend is more pronounced particularly in the retail industry.
We believe that through the use of data, technology and creativity, any compelling brand experience can be one step away from a commercial interaction, and therefore can create more business value.
The digital industry can be considered as less risky than offline business ventures, but still there are cases of businesses struggling in Korea. With the exception of YouTube, Google still doesn’t pose a threat to the local Naver, and Netflix also can’t be sure of achieving success that brands like Uber did in Korea.
In the retail sector, it is a big challenge to go head to head with Korean shopping malls that are already familiar with Koreans’ purchase behavior and distribution system. As shopping malls can’t expand organically, some companies resort to M&As with Korean companies to increase scale and be competitive. In the online retail space, eBay’s strategy was to acquire Gmarket, a popular Korean online auction and shopping mall website, when it wanted to enter the market.
A key thing that global companies wanting to enter the market should be aware of is that Korean companies are good at rapid transformation to beat competition. Case in point, Samsung which overtook Apple in the mobile phone market. Various IPTV companies and similar services such as WATCHA Play caused Netflix to struggle in Korea. Even Kakao has started to provide services comparable to Uber.
Another critical challenge in Korea comes from general type of contract between a client and agency. As most contracts are based on media commissions and not a retainer fee system, companies looking to enter Korea should be aware that most client servicing are handled within the revenue generated by a media commission.
This not only makes it hard to establish independent agencies specialized in programmatic buying, in-depth analytics or digital marketing automation, but also weakens the status of specialized vendors or agencies implementing complicated digital marketing strategy. As it gets harder for agencies to invest in specialty areas, finding a Korean specialist with experience in digital marketing is also getting tougher for global agencies.
Are there any general trends you see happening over the next few years in Korea?
We believe that through the use of data, technology and creativity, any compelling brand experience can be one step away from a commercial interaction, and therefore can create more business value. Technology has been identified as one of the top barriers for brands to embrace ‘Brand Commerce’, and we believe the emphasis will be on all brands to keep current with their technology stack to stay out of the reach of competitive threats.
Before I met these Korean dreamers, I lived as an ‘Advertising Man’, considering my audience as a ‘target’ and not a real person.
I believe mobile commerce would be one of the most important linkages to drive ‘Brand Commerce’. The growth of mobile commerce in Korea had been limited due to regulations on old certification systems. It was only recently that the government started to ease up on regulations around mobile certification, leading major market players such as Samsung entering the mobile payment industry.
As usage of Samsung Pay increases, and retailers introduce mobile payment options to cater to growing numbers of Chinese tourists – it is expected that the retail industry will become fully mobile and omni-channel commerce-centered. In addition, platform providers such as Kakao are also continuously enhancing mobile payment services.
These changes in consumer experience journey will be able to break down the boundaries between online and offline commerce, as well as accelerate the integration of branding and commerce activities. Change is definitely afoot in the digital marketing industry in Korea, which will mean more opportunities for ‘Brand Commerce’, whereby each brand’s consumer touch point will also be an opportunity to transact.
What work have you been involved in that you are most proud of?
The work that I am most proud of was Johnnie Walker’s ‘Keep Walking Fund’ project. As the global market leader of Scotch whisky, Johnnie Walker wanted to increase brand awareness and consumer loyalty which was relatively low in Korea. By using their brand ethos ‘Keep Walking’, Johnnie Walker’s ‘Keep Walking Fund’ ran a competition to recruit, inspire and support the most inspiring ‘Korean Dreamers’ and use the Keep Walking Fund to help them fulfill their dream.
They gave participants a chance to to talk about their dreams and to share their progress in realizing their dreams. While I didn’t play a big role in this project, I met many ‘Korean Dreamers’ and the whole process of listening to their life stories and judging the final winner gave me an opportunity to look back on my own life and dreams.
Before I met these Korean dreamers, I lived as an ‘Advertising Man’, considering my audience as a ‘target’ and not a real person. But through this campaign, I finally realized that they are human and I’m a person who also works for humans and the experience made me recognize that authenticity is the most important thing in my life. This is why I think the ‘Keep Walking Fund’ campaign is the most meaningful piece of work for me regardless of my level of contribution to that campaign.