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Mobile ad market growing strong

Smartphone users exposed to 1,000 ads per month


With the number of smartphone users in Korea on the rise, the mobile ad market is expanding amid signs of a broader shift in the advertising industry toward portable devices.

While conventional ad markets for newspapers, magazines and TVs remain sluggish, smartphone users here are now exposed to 1,000 ads per month, promising new territory for advertisers and media firms.

The number of Korean smartphone users recently topped 20 million, largely sparked by the introduction of Apple’s iPhone two years ago.

The growing user base is giving fresh energy to the hitherto fledgling mobile ad market.

Portals, wireless carriers and ad agencies are now scrambling to grab a share in the segment, whose potential is deemed promising as more people use such devices over TVs and newspapers for information on new products and services.

Daum Communications Inc., which runs a major portal, and Google, the world’s biggest search engine, are racing to stay ahead in the market while Korean mobile carriers are also keen to join the bandwagon.

These firms run mobile ad platforms and attract advertisers while feeding ads to applications on mobile devices such as smartphones and tablet computers. Just like the PC-based ad market, the platform providers share profits with application developers when an ad is clicked on.

Daum is currently staging the most aggressive move. It has signed on 1,900 advertisers for its mobile platform “Adam,” and its monthly page views total 10 billion.

Google’s AdMob platform has surpassed 4 billion page views per month, trailing behind Daum. Google’s strength lies in its broader coverage, as its mobile platform supports both Android and iPhone operating systems. About 50,000 applications in Korea have adopted AdMob as their mobile ad platform of choice.

Amid intensifying competition, a local venture firm stands out. Future Stream Networks provides a mobile ad platform whose monthly page views have reached 3 billion. It started the mobile ad service in October last year and recently took steps to expand the system capacity to meet surging demand.

Mobile carriers, meanwhile, approach the mobile ad platform business with a different perspective. As smartphones disrupted the monopolistic profit structure bolstered by the closed mobile Internet business amid declining revenues from voice telephony services, SK Telecom and KT are interested in finding new segments for growth, one of which is mobile advertising.

SK Telecom launched T Ad platform, which supports not only mobile but other value added platforms such as IPTV. Application developers can freely put the T Ad platform into their software to share profits. SK Telecom has so far attracted 600 applications, whose monthly page views are estimated at 1.5 billion.

LG Uplus is offering a similar mobile ad solution that is also capable of handling different platforms. It has secured 3,000 advertisers with the help of its LG Group affiliates. The company’s monthly page views on its platform reached 500 million.

KT, which competes with SK Telecom and LG Uplus in mobile phone and broadband service markets, is running a pilot version of its mobile ad platform titled “Olleh Ad.”

NHN, whose Naver.com is the country’s biggest online portal, is also preparing to jump into the mobile ad platform business.

Mobile ad solutions for smartphones and tablet computers are also advancing by leaps and bounds, particularly concerning interactive combinations with location services and personalized recommendations.

By Yang Sung-jin (insight@heraldcorp.com)
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