Securities Firms Keep Advertising Budgets Wide Open This Year Too

Following last year, spending significantly increased... Advertising expenses stand out among brokerage firms like Kiwoom Securities with commission trading dominance

▲ Yeouido Securities District, Seoul

[Asia Economy Reporter Park Jihwan] The securities industry has been significantly increasing its advertising expenditures this year, following the trend from last year. In particular, securities firms that hold an advantage in the brokerage (commission trading) sector showed a notable rise in advertising spending.

According to the Korea Financial Investment Association on the 18th, advertising expenses of the top 12 securities firms by equity capital in the first quarter of this year increased by 78.6% compared to the same period last year. The total advertising cost rose by KRW 31.088 billion, from KRW 39.567 billion in the first quarter of last year to KRW 70.655 billion in the first quarter of this year. After spending KRW 246.164 billion on advertising last year, a 32.2% (KRW 60 billion) increase from KRW 186.161 billion the previous year, the industry is expanding its advertising budget again this year.

Especially, securities firms with strengths in commission trading had large expenditures. Kiwoom Securities, ranked first in domestic commission trading market share, spent the most on advertising within the industry. It used KRW 24.876 billion in the first quarter alone, more than 2.55 times the KRW 9.752 billion spent in the same period last year. This amount is nearly half of last year’s total advertising expenditure of KRW 50.659 billion. A Kiwoom Securities representative explained, "As the average daily number of new accounts increased from 8,058 in the first quarter of last year to 21,788 in the first quarter of this year, participation in events such as ‘Opening a non-face-to-face account and receiving KRW 40,000 cash’ and ‘Receive $40 first and then invest in overseas stocks’ increased, leading to a significant rise in advertising expenses."

Next in line were Mirae Asset Securities (KRW 13.951 billion), Korea Investment & Securities (KRW 7.535 billion), Samsung Securities (KRW 5.037 billion), Hana Financial Investment (KRW 3.957 billion), KB Securities (KRW 3.679 billion), NH Investment & Securities (KRW 3.112 billion), Shinhan Financial Investment (KRW 3.050 billion), Yuanta Securities (KRW 2.497 billion), Daishin Securities (KRW 2.076 billion), and Meritz Securities (KRW 547 million).

In terms of growth rate, Yuanta Securities showed the highest increase at 410% (KRW 2.08 billion). Other brokerage leaders Samsung Securities and Mirae Asset Securities also showed steep rises in advertising expenses. Samsung Securities’ advertising costs increased by 282% from KRW 1.319 billion in the first quarter last year to KRW 5.037 billion this year. Mirae Asset Securities also increased its spending by 112%, from KRW 6.59 billion to KRW 13.951 billion. Hana Financial Investment raised its advertising expenses by 84% compared to the previous year.

The trend of increasing advertising expenditures in the securities industry is expected to continue this year as well. With individual investors’ enthusiasm for stock investment still ongoing, aggressive marketing activities for new account openings and account transfers from other firms are anticipated to persist. An industry insider said, "Competition to attract customers to increase market share, especially in overseas trading and brokerage-type Individual Savings Accounts (ISA), is expected to intensify."