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How AI May Change the Digital Marketing Industry in Korea

Korean Digital Marketing: Integration of AI by Waterbe

With the rise of Artificial Intelligence, there are mixed opinions amongst the public about how safe it is or how beneficial it could be. While some believe AI can be invasive and unsafe, others believe it to be a crucial component in improving many aspects of daily life. 

From a marketing standpoint, the potential usage of AI is vast, offering enhanced capabilities for targeting, personalization, and efficiency. As AI continues to evolve, its integration into digital marketing strategies can transform the landscape and possibilities of marketing significantly.

This transformation can be observed in South Korea, where innovative technologies are currently being adopted as well as adapted to fit the unique needs of the local market.

Current State of Korean Digital Marketing

Korean digital marketing is primarily driven by social media and online advertisements.

While the overall strategies may appear similar to those used globally, Korea has a strong and distinct focus on local platforms – major players including Naver and Kakao – each of which has unique tools and audiences.

An example of AI already being integrated into Korean digital marketing is Naver’s CLOVA for AD. This is Naver’s own generative AI which has revolutionized advertising products.

By leveraging advanced AI technologies, Naver is creating benefits for both consumers and brands – Naver is enhancing the user experience and driving engagement through personalized and interactive content, all while helping brands increase traffic to their sites and promote their products.

Naver's generative AI, CLOVA, by Waterbe

Enhancing Marketing with AI

To understand how exactly AI can come into play, we can take a look at how NIKE in Korea has collaborated with Naver to test out its CLOVA technology. Specifically, AI has helped connect user’s information consumption flow from discovery to exploration to purchase and ultimately ideally repurchase.

NIKE utilized “Brand Chat”, an AI chatbot service powered by CLOVA. This AI chatting program allows consumers to “talk” with NIKE in an easy question-answer based conversation before moving to the website.

Naver's CLOVA and NIKE, by Waterbe

Consumers can ask requests related to product information and recommendations from general searches to specific inquiries like the heel high of a specific sneaker. Not only does Brand Chat answer these questions promptly, it also sends a purchase link so that the consumer can directly and easily locate the product.

During the pre-test phase of NIKE’s Brand Chat, the AI-powered initiative resulted in a 20% increase in click-through rates compared to regular ads, and 30% of users who interacted with CLOVA proceeded to the product site. 

From this data, we are able to see that AI helps not only with site traffic but also attention retention and sales. In other words, Brand Chat improves the overall brand exploration and purchase experience by making it frictionless.

CLOVA's Impact on NIKE, by Waterbe

The increase in click-through rates suggests that consumers are more likely to visit the website and ideally make a purchase after interacting with AI, meaning more consumers are engaging with products generating quality site traffic. 

CLOVA replicates an in-store experience for NIKE – while online shopping can be tedious and time consuming where it is easy for consumers to simply click away from the site, CLOVA creates a more seamless customer journey by providing information and leading to purchase all within one window. 

What does this all suggest about the future of digital marketing?

Given the capabilities of AI, it is clear that there are positive impacts in customer engagement and conversation. AI is taking on the role of a brand manager, making processes run smoother and enhancing the customer experience.

As AI technologies continue to advance, its integration into Korean digital marketing strategies offers something to look forward to – increased efficiency, personalization, and innovation within the industry as well as an evolved and more tailored experience for consumers.


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