Advertisements Permeating Buildings... "Making Bleak Buildings More Colorful" [Startup Pick]

In the heart of Seoul, we easily encounter small to medium-sized digital billboards in numerous buildings. These digital advertisements play in various locations such as building entrances, elevator waiting areas, and elevator walls. This is also known as digital out-of-home advertising or digital signage when combined with digital platforms.SpaceAdd is a digital out-of-home advertising startup that produces these digital advertisements and supplies them to major office buildings. There are many advantages to combining digital advertising with office buildings. People usually spend more waking hours at work than at home. Depending on the characteristics of the tenant companies, a certain level of customized targeted advertising is possible. In other words, office buildings are efficient advertising locations for advertisers. Advertising in office buildings also plays a role in making bleak buildings more colorful.IT Chosun met with CEO Oh Chang-keun and Deputy CEO Han Tae-woong at the SpaceAdd office to discuss advertising that designs spaces.SpaceAdd CEO Oh Chang-keun and Deputy CEO Han Tae-woong. / SpaceAddThe Potential of Unused Space and TimeSpaceAdd CEO Oh Chang-keun has a background in finance. Until founding SpaceAdd in 2017, he had never worked in the advertising industry. He worked in the financial sector for about 15 years, including at KPMG FAS Corporate Finance, Samsung Fire & Marine Insurance Asset Management, and Robeco Asset Management. There was no special reason for a finance professional to enter the advertising industry.Oh said, "While working in various places like Gangnam and Euljiro, I was continuously curious about whether there was a way to create value by utilizing the unused space and time in office buildings. It was difficult to do while working at a company, so I left the financial sector around the summer of 2017 and started SpaceAdd."He added, "Most of the main economically active population in our country spends most of their time at work, and then at home, so I wanted to target the workplace first. In the early days of the startup, we lacked know-how, capital, and manpower, so we started the business in major golf driving ranges in Gangnam and Gyeonggi-do."According to Oh, SpaceAdd achieved 1 billion won in sales in 2018, just one year after starting the business. This is different from most early-stage startups. Usually, early-stage startups stabilize their business through several rounds of investment before achieving stable performance.Oh said, "At that time, golf wasn't as popularized as it is now, so there was a perception that it was a space with a high-income floating population. So we chose golf driving ranges as the first test space to run advertisements targeting high-income groups like imported cars and luxury goods, and confirmed that it worked in the market."Permeating Leftover Space and TimeCurrently, SpaceAdd's 'Prime Office Media' (space advertising solution) is installed in main lobbies, inside and outside elevators, and escalators in landmark buildings in Seoul and metropolitan core areas.SpaceAdd exposes advertisements to over 1.5 million office workers daily through 2,400 media units installed in about 450 buildings, including Seoul Square, Parnas Tower, Yeouido Park One, Pangyo Tech One, Galleria Foret The Mall, and SEAH Tower.Deputy CEO Han Tae-woong emphasized that not only SpaceAdd's own research but also advertisers' direct research showed that traffic increased dramatically by 3-4 times when they ran SpaceAdd Prime Office Media for an additional 3 months while continuing their existing advertising.Han said, "Usually, advertisers run ads for 1-3 months as a trial, and then for long-term periods of 6 months, and such brands account for more than 30% of SpaceAdd's advertising volume. One out of two brands that run a media campaign once will definitely run the next campaign as well because of the actual effects, and many places run annual advertising for 2-3 years."CEO Oh Chang-keun saw the reason for this advertising effect as targeting leftover moments. Office workers in office buildings usually look at their smartphones or talk to people next to them during spare time, such as waiting for elevators or moving on escalators.The important point is that they don't completely ignore their surroundings. In a crowded elevator, people might look up searching for a place to rest their eyes, and at that point, advertisements, news, and digital content are playing. Oh explained that SpaceAdd's Prime Office Media permeates in this way.Office buildings are also spaces where targeted advertising is possible without information such as specific site access records or purchase history. This is usually done through analysis of the list of companies occupying spaces near the main lobby and elevators. SpaceAdd has digitized the list so that landlords don't have to manually change the list of tenant companies. This means that SpaceAdd has building-specific tenant company data. For instance, if it's a large corporation building, it can be utilized to indicate that there are many office workers with purchasing power."Think SpaceAdd for Office Life"Deputy CEO Han Tae-woong believed that no absolute leader has emerged in the market so far because it's difficult for advertising media to be of much help to office building landlords (building owners). Advertising media should be helpful to building owners while also matching the building's interior design. Moreover, it needs to provide appropriate reading material and visual content, not just continuous advertisements.Han said, "Showing advertisements all day after installing an advertising board might be helpful for SpaceAdd, but it's not for the landlord. That's why SpaceAdd provides dedicated media and limits the advertising ratio to a maximum of 50%, carefully curating content that matches the building every month."This advertising solution business structure of SpaceAdd is analyzed to be creating a competitive advantage in the market. It's difficult for latecomers to imitate. SpaceAdd's vision also came from this point.CEO Oh Chang-keun said, "It's not about hanging a TV and turning on ads anywhere. Moreover, office buildings are all different in size and characteristics, making it quite difficult to copy. We aim to become the first company that comes to mind when thinking about office workers and office life."Deputy CEO Han Tae-woong confidently stated, "We expect that there will be no company with as many touchpoints with office workers as SpaceAdd, perhaps except for business card services."inno@