ABSTRACT
A study on advertising expenditure of enterprises
in Korea : Focusing on media mix and media scheduling
The scale of the advertising market in Korea is tenth highest in
the world and is still growing rapidly. Now, advertising is not
a part of consumptive expenses, but a key element of marketing,
which focuses on how to propagate products to consumers. Advertising
expenditure is regarded ad investment rather than just expenses.
However, many sponsors in Korea only take interest in creative
aspects of advertising and have less recognition about the importance
of media. Considering that media expenditure occupies over 80% of
advertising expenditure, effective media management requires more
comprehensive strategic approach. The reason for the requirement
is that effective advertising results from the complex interconnection
between strategic media planning and the development of creative
aspects.
Sponsors and advertising agencies determine when they should expend
their limited budget on what kind of media. High-involvement products
are usually advertised on TV media and informative contents are
primarily put on newspapers. However, any clear standard of such
media mix is not established In addition, it is difficult to differentiate
the definite features and strong weak point of various scheduling
type, including blitz scheduling which concentrates advertising
on a particular period, flight scheduling which divides advertising
efforts into several periods, continuity scheduling which expenses
advertising expenditure all through the year, and pulsing scheduling
which is an intermediate type of the above methods. Therefore, it
is often found that the structures of advertising expenditure of
sponsors are significantly different even though they are in the
same industry.
Study results of most industries, except mobile communication and
coffee businesses, coincided with expected outcomes. The reason
for such exception of the mobile communication businesses seems
that they failed to make an elaborate analysis of customers and
primary targets and to offer strategic support of advertising expenditure
and immoderately relied on the conditions of their competitors.
Moreover, it is another important factor that, because many businesses
in that industry, which disorderly flooded in the past days, was
merged and integrated after 2001, survivors' profitability increased
and the market was stabilized, promoting them to raise advertising
expenditure.
On the one hand, a coffee company that occupied a dominant position
in the coffee market by driving active marketing showed stabilized
advertising efforts. On the other hand, another coffee company that
agreed its failure in the advertising market decreased the price
of their coffee products, resulting in the degeneration of profitability
and subsequently great decrease in advertising expenditure.
The pattern of advertising expenditure of many enterprises in Korea
still depends on unexpected monthly situations rather than elaborate
planning through the analysis of purchase patterns and trends. In
other words, their determination relies on structural problems beyond
marketing-related elements or illogical principles, including any
impromptu direction by a CEO, change in their competitors' advertising
expenditure, and so on.
The media mix in the same industries showed a constant tendency.
What was disinguished was the fact that, for the last 4 years, many
industries that had mainly relied on customers' emotional aspects
or used newspapers as primary media has raised their dependency
on TV media rather than newspapers. This tendency resulted from
the conclusion that efficiency of TV media is higher than that of
newspapers because many sponsors make much of efficiency of their
advertising. another important reason in the fact that a brand image
affects consumers' determination. In spite of these reasons, they
can't fully depend on TV media due to the difficulty in subscribing
to advertising on TV media.
Now, sponsors and advertising agencies should establish a definite
advertising framework by interconnecting the media planning and
buying and analyzing consumers' taste. A variety of trials and errors
in the part days served as a good foundation to setup optimal media
planning.
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