AD STARS 2018 Keynote Speech by Jeongkeun Yoo(Cheil Worldwide)

Hello, I'm Jeongkeun Yoo from Cheil Worldwide. Normally when I come to an international advertising festival, I shouldn't know anyone, but I know too many people. I'm happy, but the organizing committee might be a bit disappointed. Last year I came to the Busan International Advertising Festival for the first time and met Executive Chairman Choi Hwan-jin, who threatened me into giving a keynote speech. At the time I was a vice president in my final year, so I said I'd do it if I became president. I said it like promising to give two or three hundred million won if I won the lottery, but then I actually became president, so I'm here to keep my promise.

I thought about what to present. As you know, the advertising industry is going through difficult changes. The focus seems too much on digital transformation, data tech, and so on. From the perspective of content creators, I wanted to talk about where the change is heading, so I prepared a bit today.

Years ago, there was a prediction that by 2015, 80% of people in advertising would lose their jobs. At that time, many said advertising was dead or dying. But I haven't seen any mass layoffs in our industry, and there's still no evidence that advertising is dead. In fact, the 2017 Davos Forum listed the advertising industry as one of 13 growth industries.

Every year AdAge ranks advertising companies. We were 15th in 2015, but in just two to three years we dropped to 19th. We worked hard, our sales kept growing, and we did M&A, but we couldn't keep up with the speed. The reason is that the yellow-highlighted players are not traditional advertising industry players. New, completely different players have emerged—mostly consulting firms and IT industry players—and they have entered this market in force. Because the market has grown enormously, from the perspective of traditional players, this could be a crisis or an opportunity.

So, some say it's dead, some say it will die, and some are jumping into this chaotic market. I wanted to examine the essence of how this market is moving. Clearly, everyone acknowledges that digital impact and the Fourth Industrial Revolution started all the changes. I don't want to go into detail about that. I think two fundamental changes have begun in our industry.

The first is that the way we view brands—the very concept of a brand—has changed enormously. In the relationship between brand and consumer, there were times when the brand had much more initiative, times of balance, and now all initiative has shifted to the consumer. In the past, there were countless individuals around a brand, but they were not connected—it was the era of broadcasting. We didn't know who these individuals were, so we called them the 'unspecified mass.' Brands could control them. Later, through research, we started grouping individuals—segmentation. Then IT, data, and fragmented media connected individuals and brands with lines. Brands thought they finally knew each consumer, but that lasted only about a year or two. Consumers, using IT, gained much more freedom and access to the truth about brands. So brands lost power, and consumers began to control them. Now, instead of consumers being tied around a brand, brands and consumers have one-to-one relationships. A brand wants to look the same to all consumers, but it starts to look like a triangle to some and a circle to others. Initiative has moved to the consumer.

IT and consulting companies entered this market because they can freely own the line connecting brand and consumer. At our company, we call this the 'N Brand era'—the brand is just one of n things for consumers. Consumers have all the needs and initiative, not mass brands. Let me show you a film.

That film is not necessarily a typical example of the N Brand era. It's just about letting consumers choose to create their own story. But in the future, truly personalized content will be delivered to each individual. At Cheil Europe, because data access is easier there, we are building a 'content factory' in the Czech Republic that 'prints' personalized content. Many startups are working on programmatic buying for media, and now they are creating dozens of images and copies and dynamically delivering them to individuals. The N Brand era has truly arrived.

In this world, we need to rethink the scope of competition. We are obsessed with who our competitors are. Everland's competitor is Lotte World in Jamsil, but actually, consumers watching Netflix at home could be a bigger competitor. Popcorn is sold in theaters; if Netflix eats into the market, popcorn could be in danger. Galaxy could be a competitor to Netflix or to Everland. Everything can be a competitor or a friend. Ultimately, what matters more is the meaning and value of my brand in an individual's daily life, rather than direct substitutes and differentiation points.

We've long talked about market share and mind share, but these are about our position within substitutes. They don't explain cases like Everland vs. Netflix. So at Cheil, we created a new metric called 'Life Share'—the share our brand occupies in consumers' daily lives. It's a Konglish term, but we use it to contrast with market share and mind share. I believe it will become an industry concept as Cheil grows stronger.

The second change is that all our methodologies are beginning to shift. Do you see what you believe, or believe what you see? In the analog era, all advertising methodology started from the premise that there is no fact or reality between potential customers and brands—everything is perception. That gave us brand image, positioning, brand loyalty, and the ladder of perception. I think all of that is a legacy of the 'see what you believe' era. But now a generation has emerged that only believes what they see and experience. They test phones by dropping them, test cosmetics themselves. They don't trust journalists or articles; they doubt and verify. This is a shift from perception to experience.

We call this generation Millennials, and all our marketing activities now focus on them. The camera is the first course at a restaurant—they share experiences through photos. In this world, rather than building brand image, positioning, or loyalty, the key is how to directly let them experience what we have, or indirectly convey experience through storytelling. Galaxy is fiercely competing with Apple by providing experiences. Apple itself is a great experience brand—they won a Grand Prix at Cannes for retail consumer experience. Galaxy holds Unpack events, creates studios for hands-on experience, and in Korea, there are over 100 experience centers nationwide. Digital is also focused on delivering personalized experiences.

The key question is: who can consistently, continuously, and richly deliver experiences across diverse touchpoints in consumers' daily lives? That is the new approach. I think the role of an agency in this era is to become the 'Life Share designer' that connects brands and consumers through experiences.

So what should we do for a successful brand? In the past, we focused on strengthening brand perception through introduction, reinforcement, and normalization. Now, it's about designing experiences. We place a point in the consumer's daily life, then connect that point to their lifestyle, hobbies, tastes, and situations, and finally expand it into a three-dimensional surface. I call this a 'point, line, surface' extension strategy.

Let me give some examples. There's a rice store in Japan called 'Akomeya'—'komeya' means rice store, and the prefix 'a' can mean 'one' or 'not'. So it's 'one rice store' or 'a rice store that is not a rice store'. They started with the experience of rice, which is being pushed out by bread. They connected it to consumer tastes, the rise of single-person households, rice-related foods and cooking methods, and then expanded into various dimensions. They sell various rice varieties, sauces that go with rice, side dishes (but not main ingredients like fish or meat), a small restaurant where you can enjoy rice with a few side dishes, single-serving rice packages, and even rice-related items like rice paddles, rice cookers, tableware, and kitchenware. The Ginza store is a three-story building where you can experience everything related to rice and consumers' daily lives. They even sell cookbooks.

Gucci is a famous example. Ten years ago, if you asked for Gucci in Itaewon's fake goods shops, they'd say 'Buy the real thing.' Now Gucci has lines at every store. They focused on providing experiences tailored to Millennials, connected to their tastes and daily lives—even creating a travel app. They make accessories, toys, home decor, and colorful interiors. They have a 'shadow committee' to hear young Millennials' opinions, and they engage in CSR activities and avoid fur. By branding through daily life, they've become a brand that Millennials love.

Cheil Worldwide is fighting fiercely in the global market, where 70-75% of our revenue comes from. People think Samsung Electronics gives us all the business because we're their in-house agency, but we've never received anything for free. We win business through competitive pitches against global agencies. We used to think we were at a disadvantage—different culture, no advantage in content creation. But with the experience era, we gained confidence. The key is who can provide the most seamless and rich experience. Coincidentally, when I took office earlier this year, I created the catchphrase 'Connect Plus' to connect everything. We are a small but full-service agency. Initially I thought that was foolish and we should specialize, but as daily life experiences become key, I believe small full-service companies like ours are more advantageous. So we are connecting internally and with everything we can.

Let me show some related content. Our India office gave a small office to a startup to work with us and created connections. The 'Mocha Post Office' campaign was for Dongseo Foods, a traditional TV advertiser, but they entered the experience world. Instant coffee is losing ground with Millennials, so we started from how to make the experience fun. For Samsung Fire & Marine Insurance, insurance companies usually only enter daily life through insurance agents. We used fire extinguishers to enter daily life. The team that made this is aiming for a good award at Cannes next year—if any judges are here, please help them.

I've been warned about time, so I'll wrap up. Everything is connected now. In the past, we did IMC campaigns by broadcasting through the air, not knowing who the consumers were. Now we are connected one-to-one with all consumers. This means our content and communication can directly impact the market. We've been called 'advertising workers' and played a supporting role in marketing. But because our content directly connects brands and consumers, we are now leading marketing and the market. That's why so many consulting and IT companies have entered. To be extreme, we are now competing with makers. Makers want to do this themselves, and even media makers are emerging. Content is so important that they want to do it themselves. I think the status of advertising people has risen accordingly. In Korean, 'Geonseunghasipsio'—I wish you all success. You've worked hard making ads. I believe the era of advertising people has truly returned. I hope everyone is full of energy. Thank you.