BUZZscape 2.0 (English version) - Korean Mobile Advertising Landscape inspired by LUMAScape.

1. Korean Mobile Ad Industry Report:
Looking back at 2015 and forecasting 2016
Joshua Ohsu Kwon
Chief Strategy Officer @ Buzzvil
Mobile Marketing Conference 2016

2. BUZZScape 2015 (2.0):
Korean Mobile Advertising Landscape
Mobile Marketing Conference 2016
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3. Ad Network
Publishers / O&O
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Copyright © Buzzvil Co., Ltd. All Rights Reserved.
Search Agency
Full Service
Ad Agency
Digital
Agency
Media
Rep.
Analytics
Retargeting SSPAd Exchange
Search – O&O / RTB
Social game platform App store Carriers
Updated on Feb 16, 2016
Display Native
DSP/ATD/FM
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Korean Mobile Advertising BUZZScape by
For more information, please contact ohsu.kwon@buzzvil.com
Display
Incentivized Video
Incentivized Video
DMP
Incentivized-video
RTB-enabled
Open to exchange
Native-Video
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B
L
I
S
H
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S
Etc
Lock screen

4. Mobile Marketing Conference 2016
2
Key Changes:
The Korean Mobile Ad Market
in 2015

5. It’s worth noting growth of some key inventory categories such as social media, content curation service,
lock screen service, MCN (Multi-Channel Network), etc.
Publishers / O&O
Display NativeIncentivized Video
Open to exchange
Native-Video
Lock screen
• Beyond incent media,
evolving to ‘first screen
native ad inventory’
(Expanding to Display
category)
• On top of lock screen apps
such as Honeyscreen and
Cashslide, big players
like 11st and OKCashbag
entered and expanded the
market.
Lock Screen Social Media Content Curation MCN
• #1 category holding
massive inventories
• Facebook-inspired in-
feed native advertising
(UI Native) becomes the
new norm, and is applied
to Instagram, Kakaostory,
etc.
• Native ad unit on
messenger services are
also prominent
• Content curation media
such as Pikicast, VONVON,
Huffington Post, etc.
• Providing content-type
native ad (UX Native)
inventories to connect
advertisers and
consumers more naturally
• Video content creator’s
network such as Sandbox
Network, Treasure Hunter,
CJ E&M, etc.
• Promoting products by
video format as content-
type native ad (UX
Native)
• More focused on content
production thanowning
media.
I D D V VN N
Mobile Marketing Conference 2016
1. Growth of Premium Publishers and ‘Native-fied’ Ad Units

6. These native ad inventories can be categorized into two: UI Native and UX Native. It could deliver better ROI for
both advertisers and publishers but it is not easy to be compatible with existing ad exchange ecosystem.
1. Growth of Premium Publishers and ‘Native-fied’ Ad Units (Cont’d)
Lock Screen In-feed Content MCN-Video Type
UI Native UX Native
• Definition: Ad that has the same look and feel as
user interface of service
• Pros: i) Less displeasure for users, ii) better
advertising performance
• Cons: i) Not perfectly compatible with existing ad
ecosystem in terms of image asset and tracking
• Definition: Ad that has the same look, feel, and usage
as user experience of service
• Pros: i) Content is ad, very persuasive.
• Cons: i) Tailored creative for each publisher is
required: not scalable ii) Potentially causing negative
response from users due to ambiguity between
content and ad
Mobile Marketing Conference 2016

7. MCNs grow and so do the UX Native ads created by them. MCNs produce and promote videos featuring
gameplay, cosmetics, and so on.
1. Growth of Premium Publishers and ‘Native-fied’ Ad Units (Cont’d)
Mobile Marketing Conference 2016
Growth of MCN and UX Native video ads
Publishers / O&O Native-Video
Sandbox Network- ‘Spooky Runner’ Case
06/27 06/28 06/29 06/30 07/01 07/02 07/03 07/04 07/05 07/06 07/07 07/08
260K250K
• Influencers: 2 YouTube creators with over 750K
subscribers (도티, 잠뜰)
• Campaign Strategy: Posted videos in which the
creators are playing ‘Spooky Runner’ on YouTube
(playtime:15 mins)
• Result: (a) 200K videoplay, 100K downloads in a
week (b) 10% of users who installed made Google
Play review and average star rating was 4.8
(c) More UGC posted on YouTube by users (WoM)
YouTube Play
Download

8. Content curation services such as Pikicast also provide native advertising services for advertisers. Editors with
a certain segment of fan demographic are matched for brands based on advertisers’ target audience.
1. Growth of Premium Publishers and ‘Native-fied’ Ad Units (Cont’d)
Mobile Marketing Conference 2016
Native Ads Case Study on Content Curation Service
Publishers / O&O
Pikicast – Honeyscreen Case
- 253K content reads and 15K registrations from the
post within 2 days
- The cohort retention was alsohigher than average
about 5 – 10%
[Native Advertising Campaign
of Honeyscreen on Pikicast]
253K
Pageview
15K
Registration
Native
Content Concept
Planning
Content
Production
Content ReviewPost
[ Content Production and Campaign Execution Process ]
[ Campaign Performance & Result ]
Advertiser & Pikicast Pikicast
AdvertiserPikicast

9. While Facebook and Instagram are not connected to ad exchanges on mobile yet, KakaoStory also holds onto
its closed-platform strategy. It’s unclear when these premium inventories will be plugged into ad exchanges.
2. Publisher Still Is The Bottleneck of Ad Exchange Ecosystem
Mobile Marketing Conference 2016
Fixed Price Real-Time Bidding
AdExchangeAdAPIClosed
Ad Platform Strategy of
Premium Publishers • Twitter has recently announced that they will sell
their inventories through ad exchanges including Google
• Pros: Easy/efficient sales of inventories
• Cons: i) Bad user experience, ii) less control over ads
• FB and Instagram are not plugged into ad exchanges
on mobile channel. Instead, they open its ad API to selected
partners (aka FMP) and allow them to buy and optimize
systematically.
• Pros: i) Consolidated media buying process for advertiser,
ii) easier to compare/optimize several channels, iii) publisher
having more control over campaigns to be displayed.
• Cons: i) Impossible to adoptthis strategy if smaller players,
ii) extra development resource of demand partner is required
• KakaoStoryoperates closed-RTB platform that is not
connected to any 3rd party.
• Pros: Best for user experience
• Cons: i) Worse in terms of monetization for publisher
(eCPM and fill rate) ii) not easy/inconvenient to buy and
optimize for advertiser
Publishers / O&O Display

10. Facebook and Twitter introduced their auto-play video advertising products displayed on newsfeed, and
incentivized video advertising networks such as AdColony and Vungle aggressively opened Korean offices.
3. The Mobile Video Advertising Market is Growing Rapidly
Mobile Marketing Conference 2016
Publishers / O&O Video
Auto-Play Mobile Video Ads
on Facebook and Twitter
• Both Facebook and Twitter introduced the auto-
playable videoads product and extended the volume
of mobile advertising inventories significantly.
• 65% of video view on Facebook is played on mobile:
MAU who has watched videoon Facebook in Korea is
approximately 10 millions.
VideoAd Network
Expansion into the Korean Market of
Incent-Video Ad Networks
(Source: Facebook Korea Interview,April2015)
Opened the KR branch in
2015
Announced the aggressive
expansion into Korea in 2015
Set up the KR operation in
2015
• Three incent-video advertising networks set up their
Korean operation in 2015 and started to expand
aggressively.
• Growing very fast due to the fact that advertisers
have no risk for efficiency as the networks mostly
charge for installs, not videoplay.
>
Users are rewarded
after watching a promoted video
Redirected to
Google Play download page

11. Korean video platforms are at war for higher market share. It is noteworthy that Naver TVCast is catching up quite
rapidly thanks to the exclusive contract with SMR, and Facebook grows the fastest with its in-feed auto-play video.
3. The Mobile Video Advertising Market is Growing Rapidly
Mobile Marketing Conference 2016
Publishers / O&O Video
Video Platform War in Korea
(Source: DMC Media,June2015)
40.3%
14.1%
12.8%
6.2%
5.7%
20.9%
+83%
QoQ
+41%
QoQ
+35%
QoQVideo Traffic
Market Share
June 2015
“The video platform market is getting fragmented
due to the fast following of Naver and Facebook in the market”
- Naver has been growing fast thanks to
its owned media power as #1 portal and
premium contents provided by SMR
- The volume of absolute traffic
has grown steadily despite
the tragedy with SMR
- Auto-video play and distribution
through user’s sharing activities makes
Facebook the fastest growing mobile
video media in the world.

12. Mobile Marketing Conference 2016
3
Forecasting
the Korean Mobile Ad Market
in 2016

13. Forecasting the market in 2016 with 3 keywords
Mobile Marketing Conference 2016
Keywords of 2016
Programmatic Video Native

14. It will be interesting to see whether a) KakaoStory opens its Ad API, or b) Naver Band or Naver’s mobile
inventories adopt at least closed-RTB system in its ad platform.
Programmatic: Steady Growth But Not Fast Enough Due To Bottleneck
Mobile Marketing Conference 2016
P V N
a) KakaoStory : Opening Ad API?
• KakaoStory may be opening its Ad API to
source more advertising campaigns by
connecting to DSPs directly in customized
way (following Facebook’s strategy)
• However, advancement of the platform
should be preceded.
Fixed Price Real-TimeBidding
• As programmatic concept has been distributed
a lot among marketers and publishers recent
years, Closed-RTB will be heavily adopted by
more and more publishers, transforming from
fixed price/reservation type ad unit.
A
B
b) Naver Band and Naver Mobile : Closed-RTB?
• Thinking about Naver’s traditional ad sales
strategy so far, it won’t be easy for them to
make it biddable. However, there is still chance
that they will adopt closed-RTB for some of the
2nd
tier inventories, other than timeboard on its
main page, including Band.
AdExchangeAdAPIClosed
Ad Platform Strategy of
Premium Publishers (Social Media)

15. Growth in mobile video traffic will lead the increase in mobile video ad inventories,
while managing them from several different channels such as social media and Naver will be far more complicated.
Video: How To Manage Several Different Video Ad Channels Effectively?
Mobile Marketing Conference 2016
• On the other hand, mobile videoadvertising
channels are becoming more and more diverse,
increasing the value of mobile videoDSP to
consolidate managementof videocampaigns.
(Source: Mezzo Media Report, 1st half of 2015)
Growth in Mobile Video Traffic
P V N
• Mobile video traffic growth will continue
to grow fast thanks to many factors such
as mobile network infra development,
cheaper/unlimited data plan, mobile-
friendly video service, more attractive
contents produced by MCNs.
If KakaoStory introduces its videoad
product, there will be even larger inflow
of mobile videoadvertising inventories.
More Video Ad Inventory Opportunity
On Social Media
Increased Needs in Consolidating
Management of Mobile Video Ads

16. Increased users and followers of content curation services and MCNs will lead the market expansion of
native advertising, as well as increase the importance of creative production.
Native: Will Grow With Content Curation Service and MCNs
Mobile Marketing Conference 2016
• Content curation services and MCNs will drive native advertising’s growth, producing more diverse
success cases, and possibly becoming one of the must-have advertising channels.
• As the role of content creatives become more important, publishers and agencies producing quality
content will excel at their business.
P V N
[ Editorial ] [ MCN ] [ Pikicast –
Content Curation]

17. Thank you!
ohsu.kwon@buzzvil.com
Joshua Ohsu Kwon
Chief Strategy Officer @ Buzzvil
Mobile Marketing Conference 2016