Webtoon Entertainment Inc. is expanding its advertising business to counter sluggish growth in its core paid content segment, according to a recent shareholder letter filed with the SEC.
The Nasdaq-listed storytelling platform, controlled by South Korea’s Naver Corp., generated $166.1 million in ad revenue in 2024, up 14.2% from the previous year. Meanwhile, its flagship paid content business, which represents 80% of total revenue, grew just 5.3%.
“Advertising remains a significant and largely untapped opportunity for us,” CEO Kim Junkoo told shareholders, citing the company’s “highly-valued demographic of deeply engaged Gen Z users.”
Unlike many digital storytelling platforms that avoid advertising in paid content, Webtoon is developing innovative ad formats to reduce user resistance. In January, it launched “Branded Content” – ads presented as online comics – in partnership with Japanese gaming company Capcom.
The strategy shift comes as Webtoon faces intensifying competition from platforms like YouTube and TikTok. Monthly active users for Naver Webtoon, the company’s largest web comic platform in Korea, fell 2.1% to 24.4 million in 2024.
Webtoon’s total revenue increased 5.6% to $352.8 million last year, while its net loss widened to $102.6 million from $95.3 million, partly due to expenses related to its Nasdaq IPO last June that valued the Los Angeles-based company at $2.67 billion.
