Seoul, South Korea – As the traditional advertising market, including TV, newspapers, radio, and magazines, continues to slow down, ad agencies are seeking new growth drivers in offline marketing. By focusing on exhibitions, events, and pop-up stores, they are striving to overcome the downturn in the traditional advertising market.
According to the advertising industry, Cheil Worldwide's gross profit from offline activities, which is part of its below-the-line (BTL) advertising, grew by 21% year-on-year in the first three quarters of this year. This is about three times the 7% growth rate of Cheil Worldwide's overall gross profit. The proportion of BTL within the gross profit also increased to 13%, a level similar to that of ATL (15%).
This trend of strengthening offline marketing is not limited to Cheil Worldwide but is evident across the entire advertising industry. According to the Korea Advertising Association, the combined promotional business of four major comprehensive advertising agencies (Cheil Worldwide, Innocean, HSAD, and TBWA) grew by about 43.62% in two years, from 2.6931 trillion won in 2021 to 3.8678 trillion won last year. Promotional business primarily consists of offline marketing such as pop-up stores and exhibitions.
The offline activities undertaken by ad agencies are centered around "experiential marketing." To this end, they are planning strategies to expose client brands at global exhibitions and events. They are also operating pop-up stores to make them accessible to the general public.
Cheil Worldwide has been engaging in offline marketing through exhibitions and events.
A notable example is the "Samsung Olympic Experience Center" launched in the third quarter. Cheil Worldwide drew attention by setting up four Samsung Olympic Experience Centers in Paris during the Paris Olympics.
The Samsung Olympic Experience Center, which has become one of the Olympic tourist attractions, attracted approximately 380,000 visitors, including athletes and fans. Cheil Worldwide is also involved in planning Samsung Electronics' "Galaxy Unpacked" events and operating booths at the Consumer Electronics Show (CES).
Ad agencies are also increasingly planning and operating pop-up stores to enable clients to create touchpoints with consumers in offline spaces.
Innocean operated a pop-up showroom in Seongsu, Seoul, where Kia Sportage collaborated with Squid Game 2. Visitors could enjoy games featured in Squid Game, such as "Red Light, Green Light" and "Dalgona Candy," and the showroom was designed to help visitors remember the Sportage by linking these games to the vehicle's strengths.
HSAD opened a pop-up store commemorating the release of the mini-album of the idol group Seventeen in Apgujeong, Seoul, and another pop-up store in Seongsu, Seoul, to celebrate the 70th anniversary of the underwear company Shinyoung Waco. Additionally, they held an exhibition showcasing the works of the late artist Seo Se-ok as media art on LG OLED TVs.
Furthermore, HSAD is developing strategies to acquire customer data even in offline spaces. They developed "Benefit Hero" with Toss, a platform that provides points to visitors and allows them to evaluate offline spaces.
Daekong Advertising has created spaces where customers can directly make and use client products. For example, they operated the "Ghana Chocolate House Season 3" pop-up store in Seongsu-dong, Seoul, allowing visitors to experience the chocolate-making process firsthand.
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