The growth of the programmatic market in Korea, led by Naver and Kakao, has formed a unique ‘Walled Garden’ ecosystem in Korea.
As a result, the adoption of proven global technologies and products (e.g., GAM, AdX, Programmatic, Header/Pre Bidding, Video Outstream, etc.) has been relatively delayed or passive.
However, recently, major media companies are actively expanding the application of global technologies and products to overcome the difficulties in digital advertising revenue stagnation.
Naver and Kakao dominate the programmatic advertising market in Korea. Naver and Kakao hold 70% and 30% of the domestic search market, respectively, and account for more than 70% of the domestic digital advertising market. Naver and Kakao have their own programmatic advertising platforms and provide advertising services to digital advertisers through these platforms.
The leading growth of Naver and Kakao has formed a unique ‘Walled Garden’ ecosystem in Korea. Walled Garden refers to platforms like Naver and Kakao that establish their own ecosystems and limit integration with external platforms. As a result, the adoption of proven global technologies and products has been relatively delayed or passive.
In the global market, a small number of Ad Tech giants like Google and Facebook have grown through their technological prowess. However, innovative ideas from opposing factions that can utilize their technology and create additional value have been accepted in the market, leading to various success stories.
The most successful example, Header Bidding, is a form of programmatic advertising that allows advertisers to bid simultaneously on ad placements obtained directly from various Ad Tech companies or publishers, in addition to Google and Facebook. Header Bidding provides advertisers with opportunities to secure better bidding prices and offers media outlets opportunities to generate more ad revenue.
These innovative attempts have begun to create various success stories in the Korean programmatic advertising market as well. Recently, major media companies are actively expanding the application of global technologies and products such as ad servers, ad exchanges, header bidding, and video ads to overcome the difficulties in digital advertising revenue stagnation. They are also building new advertising channels using these technologies.
The programmatic advertising market in Korea is still in its early stages, but with the leading growth of Naver and Kakao and various efforts to respond to it, it is expected to continue to experience rapid growth in the future.
