Siva Gane­shanan­dan, Direc­tor, Dig­i­tal Mar­ket­ing Suite, Adobe APAC – @sivagatwork

The first time I looked at Alexa it was 2000. I was liv­ing in Lon­don and I got a bit of a shock that the num­ber one web­site in the world was not Yahoo!, but in fact Daum. I was already look­ing at mov­ing to the APAC region, so had heard about South Korea’s online pen­e­tra­tion but this really shocked me.

After I moved to the region, I was in South Korea a fair bit to visit cus­tomers and learn more about the mar­ket. It was imme­di­ately obvi­ous that the inter­net indus­try there was a true global leader. Fast for­ward by 12 years and, while South Korea leads the world in many areas, much of that early promise at the turn of the mil­len­nium was not fulfilled.

First let’s look at the pos­i­tives.  South Korea con­tin­ues to have the high­est broad­band pen­e­tra­tion of any coun­try in the world.  With its pop­u­la­tion, it was never going to be the biggest in terms of size for very long, but in sophis­ti­ca­tion it has led in some areas. The cul­ture of online com­merce is woven into the fab­ric of soci­ety more than any­where else, with over 90% of the pop­u­la­tion hav­ing bought some­thing online. Accord­ing to a recent IPSOS sur­vey, 65% of South Kore­ans actu­ally pre­fer buy­ing things online to buy­ing them from a phys­i­cal shop, which makes them the direct oppo­site of the global aver­age, which sits at around 35%.

Don­ald Trump

But in many areas the country’s online indus­try missed sev­eral sig­nif­i­cant oppor­tu­ni­ties to con­tinue lead­er­ship in areas such as dig­i­tal adver­tis­ing. It was almost as if the indus­try grew com­pla­cent, as the amount of busi­ness avail­able through dig­i­tal chan­nels was sig­nif­i­cant enough for inno­va­tion to decline.  So while South Korea was third behind only Swe­den and the UK in terms of the Internet’s con­tri­bu­tion (4.6% of GDP in 2009 accord­ing to a McK­in­sey study) it fell to 7th place on McKinsey’s Inter­net Lead­er­ship sup­ply index – let­ting the likes of Japan, USA and even China take lead­er­ship positions.

It’s impor­tant to note that it’s still well ahead of some devel­oped mar­kets like France and Ger­many, which is impres­sive. How­ever, when I was asked last year to char­ac­terise each of the APAC dig­i­tal mar­kets by com­par­ing them to a celebrity, I decided South Korea was the national equiv­a­lent of Don­ald Trump. Why? Clearly Mr.Trump has a lot of traits that can make this anal­ogy inac­cu­rate, but on a very basic level here is a man who is estab­lished – he has been at the top of his game and very suc­cess­ful for quite some time. How­ever, he is also widely con­sid­ered to be unso­phis­ti­cated. So, the anal­ogy has noth­ing to do with gaudi­ness or real­ity TV shows, but rather: Estab­lished, yet Unsophisticated.

Sean Con­nery 

Since join­ing Adobe last year, I have had the oppor­tu­nity to spend more time in South Korea, meet­ing with Adobe’s cus­tomers, which include some of the big dig­i­tal pub­lish­ers as well as the country’s biggest brands.  In this time I’ve come to realise some inter­est­ing sta­tis­tics – like the fact that despite being so mature, South Korea’s dig­i­tal mar­ket­ing spend is set to increase by 20.8% this year accord­ing to the Korea Online Adver­tis­ing Asso­ci­a­tion. This will be the first time dig­i­tal crosses the 20% mark in terms of increase in over­all ad spend.

Last week I spoke at IDG Korea’s Dig­i­tal Mar­ket­ing 2012 event, attended by over 500 dig­i­tal mar­keters. There, I real­ized the con­ver­sa­tions we were hav­ing were far more “Sean Con­nery” (in other words, mature and sophis­ti­cated), than Don­ald Trump.

No Room for Apprentices

For brands tar­get­ing South Korea, dig­i­tal just got more impor­tant.  Actu­ally, it was always impor­tant, but the bad news is that it’s just got more dif­fi­cult. The com­pe­ti­tion keeps rais­ing the bar. More­over, given the matu­rity of the mar­ket, I see South Korean brands using these tech­nolo­gies in remark­ably inno­v­a­tive ways that chal­lenge the market.

When mar­ket­ing to the South Korean dig­i­tal audi­ence, you will need the fullest pos­si­ble range of tools to main­tain com­pet­i­tive advan­tage along with the abil­ity to under­stand local nuances and inno­vate specif­i­cally for that geo­graphic mar­ket. Every­thing from real-time bid­ding on dis­play adver­tis­ing, to port­fo­lio bid man­age­ment on search will be needed for cam­paign opti­mi­sa­tion. Your com­peti­tors are offer­ing per­son­alised engage­ment across their owned media and get­ting results from Multi-variate test­ing, behav­ioral tar­get­ing, auto­mated rec­om­men­da­tions and more – and these approaches are working.

We are see­ing the results of these ini­tia­tives. CPAs are being dri­ven down through bet­ter post-click analy­sis of ad effec­tive­ness. We are also see­ing our cus­tomers increase con­ver­sion rates by dou­ble dig­its by bet­ter engag­ing their audi­ence. But this is not China or India, where such increases can be sus­tained by the over­all growth of the mar­ket.  To get these results, they are grow­ing mar­ket share, and they are grow­ing at the expense of their com­peti­tors. In fact, what I’m see­ing may mean I need to come up with an entirely dif­fer­ent celebrity com­par­i­son for the South Korean dig­i­tal mar­ket in the years ahead. Watch this space ….