Smartphones kill subway ads

Most ad spaces remain empty in a subway train in Busan, Aug. 17. Many passengers these days do not look up to see ads but stare down at their smartphones, pushing advertisers to move away from traditional forms of advertisement and leaving subway operators struggling to sell advertising space. / Yonhap

By Jung Min-ho

Smartphones have given commuters ways to entertain themselves on subway cars ― creating challenges for the sellers of subway advertising spaces.

"Almost everyone, including myself, is staring down at their smartphones on the subway these days," said Park, an office worker and subway commuter in Seoul. "I don't usually look up to see the ads on the train walls."

Technological advances have changed many things from how people spend their time to where their attention wanders. This trend has pushed advertisers to move away from traditional forms of media toward digital forms.

As a result, subway operators are increasingly struggling to sell ad space, which is one of their big revenue sources.

According to Seoul Metro, the operator of lines 1 to 4, its ad revenue has dropped to 35 billion won ($31 million) last year from 42 billion won in 2012. It said only 36 percent of available ad space has been filled this year, down from 41.8 percent in 2014.

The situation is similar in other regions. According to the Busan Transportation Corp., the bidding for ads for its subway line 1 has been canceled twice. While about half of the ad spaces were filled in 2012, it has been less than 20 percent this year, it said.

"The rise of the mobile advertising industry has negatively affected the number of subway ads," a Seoul Metro official said. "We have tried to come up with new ways, but it is challenging."

The digitization of the country, and the world, has been reshaping the ad industry, creating winners and losers in the new era, said an industry expert.

"Companies increasingly promote their products through mobile ads," said an ad industry expert, who refused to be named. "When demand for subway ads was high, there were few empty spaces. Even the floors were filled with them. But it no longer is the case."

Today, he noted, operators of online shopping malls and online games are among the main customers of subway ads. "That's because as soon as they see the ads, people can buy their products with their smartphones," he said.

The decline of traditional ad forms is expected to accelerate further. The National Assembly recently revised outdoor advertising law to allow digital outdoor ads more broadly.

"The previous law limits digital ads to certain outdoor spaces. So for digital ads, advertisers had to use indoor spaces, including the subway. They now have more options," the expert said.

"I believe the law revision will accelerate the trend toward mobile ads."

The changing trend of the advertising industry is a global phenomenon, but Korea, one of the most wired countries in the world, may be feeling it more intensely.

According to the data compiled by Digieco, a research center of Korea's mobile carrier KT Corp., the country's smartphone penetration rate was 83 percent last year, the fourth-highest in the world, following the United Arab Emirates (90.8 percent), Singapore (87.7 percent) and Saudi Arabia (86.1 percent).

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