1. Naver's generative AI-based conversational search service, CLOVA X, began skill integration with the job and recruitment information service 'Wanted', the travel information and reservation service 'Triple', and the shopping app 'Kurly' on the 30th of last month. This comes about three months after integrating the car-sharing platform Socar with skills in November last year, adding new platform services to the skill set.
2. Here, a 'skill' refers to the function of incorporating data provided by external platforms into AI responses in conjunction with CLOVA X. Users can activate the skill toggle to the right of the CLOVA X search bar and select which services to use (up to two, with no overlapping areas of service selected at the same time).
3. Naver is continuing to integrate skills not only with its own services such as Naver Travel and Naver Shopping but also with external platforms such as Socar, Wanted, Triple, and Kurly, as mentioned earlier. So far, six services have been integrated with skills, with the aim of enhancing the usability of CLOVA X in daily life. Naver has provided the following examples of how the newly integrated services can be utilized.
4. Naver has announced plans to add specialized services that can enhance productivity and expertise through CLOVA X skill integration, such as document creation and knowledge exploration. The plan is to actively link CLOVA X with external services to expand the ecosystem and refine the model.
5. However, this move seems a bit strange upon reflection. Naver's actions appear to gather external companies, some of which compete with its own services, under one roof. For instance, Naver Travel and Triple overlap in their service areas, as do Naver Shopping and Kurly. Why has Naver chosen to coexist with competitors?
6. Before delving into the reasons, I tried using the CLOVA X skill feature directly, and the search results were somewhat strange. CLOVA X allows for conversational searches like talking to a friend, right? However, when attempting to search using external platform skills, conversational search was not possible. Instead of accurately understanding questions and providing the necessary information, it repeatedly presented unilateral results as if they were pre-entered information. So, it's possible to ask questions conversationally, but continuous dialogue is not.
7. For example, using the Triple skill does recommend certain travel schedules. However, when asked for recommendations for accommodations and dinner foods for a holiday with parents, it repeatedly responded, "I can only recommend one city at this time," continually suggesting a trip to Busan.
8. If one were to receive such an answer in a typical generative AI search, it would be possible to ask a follow-up question like, 'Recommend a city other than Busan' to get a more accurate answer. However, Triple, when integrated with skills, could not respond to such additional questions. It also failed to respond to requests to choose one of the cities CLOVA X had already recommended.
9. Similarly, although it was possible to receive recommendations for products sold on Kurly, it was not possible to get answers to questions about why those products were recommended. Asking for the reason behind the recommendation resulted in bizarrely recommending 'milk' products. This felt more like a robot giving a few predetermined answers to specific input values rather than generative AI.
10. CONNECTUS asked a practitioner working at Kurly what they thought about the integration of generative AI search, and the response was, "Don't have high expectations, but find meaning in the fact that data integration is proceeding."
11. To add, using Naver Shopping and Naver Travel skills did provide plausible answers. Unlike other external platforms, it felt like CLOVA X's responses were connected to existing Naver data. However, these skill search results did not provide direct purchase links, unlike the external platforms.
12. Thus, while the content of CLOVA X skill search results was somewhat disappointing, one thing was clear: the potential for advertising products was evident from the fact that product links were provided along with photo information.
13. According to Connectors' investigation, vertical commerce platform representatives and commerce sellers are hopeful that Naver will strengthen advertising products linked with generative AI in the future. The external platform services integrated with CLOVA X skills this time are also expected to be linked to advertising products.
14. Of course, for generative AI search to be linked with external shopping mall advertising products, user satisfaction with AI search is paramount. The search process must be smooth, and the search results must be satisfactory in terms of volume and reliability, and AI must respond well to ongoing conversations to lead to link clicks. From the same perspective, there was no particular desire to click on the product links of Triple or Kurly searched through CLOVA X skills.
15. However, there is certainly hope. The search results from another skill, Wanted, were different. Searching for a desired job after activating the Wanted skill was much more natural and satisfying, providing necessary information compared to when using the other two new skills. It analyzed and provided information on company size, characteristics, advantages, and disadvantages. It was also possible to request additional information by discussing previous search results.
16. Perhaps the data provided by Wanted is richer compared to Triple and Kurly, which might explain the difference. Also, the search speed when using the Wanted skill, as of writing this content, was significantly faster.
17. In any case, Naver seems to be exploring various business opportunities through generative AI. Commerce sellers' interest is also gradually increasing because Naver's competitive edge in the domestic commerce market is its search capability, and generative AI is the key to maximizing this search capability. It's exciting to see how the CLOVA X skill feature will evolve.

"When you want to quickly check the latest job information that suits you, you can use the Wanted skill. By entering a query in the CLOVA X chat window like, 'I'm a 5-year experienced UX designer, find me companies to apply to now,' CLOVA X organizes and shows job postings suitable for the role and experience level based on Wanted platform information at a glance. It also provides an easy path to each service for job applications, place reservations, or product purchases. For another example, by selecting the Triple skill and requesting a travel plan creation like 'Recommend a 3 nights 4 days itinerary to Osaka,' CLOVA X shows the best itinerary organized by Triple service based on the destination and schedule. Through the link in the response, you can move to the Triple app to check the detailed information of the destination or book accommodations and tours. Similarly, by activating the Kurly skill and entering a question like 'Find winter snacks that elementary students like,' CLOVA X recommends suitable products along with information worth considering, such as price and review count, and provides links for purchase." - From a Naver press release

"If Naver, the leading portal in South Korea, popularizes its generative AI search service, I think it's natural that consumers will increasingly use it for search and shopping activities. Vertical commerce platforms, including fashion, will strive to be featured in Naver AI search results by any means. They can cooperate through data integration and skill functions like Kurly. Especially in fashion, product specs along with review data play a very important role in purchase decisions. If consumers can effectively search for related reviews through AI, or generate outfit images according to the desired environment and body type, I believe it could significantly help increase sales." - Person A, who is in charge of marketing at a domestic fashion vertical commerce platform

"Sellers on Naver and Coupang constantly wonder how to maximize exposure within the given advertising products. So, for now, even if the effect is minimal, they are steadily building up opportunities for exposure in Naver portal searches using Naver Cafes or Blogs. What if Naver officially releases a new advertising product? And what if it's one of the AI-related products that Naver has been actively promoting recently? Then I think I'd invest at least a minimal amount to try it out. Quickly experimenting and gathering information on Naver's search and advertising algorithms is a shortcut to generating revenue. I'm aware that Naver is actively testing CLOVA for AD, so I'm monitoring whether related products will be made available for small to medium-sized brands or individual sellers, in addition to large brands." - Person B, selling products on multiple domestic commerce platforms such as Naver and Coupang

CONNECTUS' Thoughts

1. Recently, CONNCTUS wrote a content piece analyzing Naver's Q4 2023 earnings announcement (link below). While we focused on commerce issues, the key emphasis Naver wanted to highlight through the earnings announcement was undoubtedly 'generative AI'. Naver announced its direction to recommend personalized content to users by utilizing data from various services, including Naver Shopping, Places (local store information), and Webtoons.
2. According to Naver, generative AI can not only provide 'personalized content' to users but also help expand Naver's revenue. The business area where Naver sees potential is 'advertising'. For example, in the 'Home Feed' added to the main screen of the Naver app at the end of November last year, you can see ads displayed among personalized recommendation content.
3. Naver's advertising business had a tough year last year. A prolonged economic downturn led to a reduction in marketing budgets among corporate clients, which was reflected in Naver's performance. Notably, the revenue of Naver's 'Search Platform' segment, which includes DA (Display Ad) and search advertising performance, grew by only 0.6% compared to the previous year, showing stagnated growth.
4. Naver particularly attributed the poor performance of the DA business to the 'absence of targeting'. If the user's dwell time increases with AI-recommended personalized content and precise content targeting becomes possible, it is naturally expected to contribute to an increase in Click-Through Rate (CTR) and advertising revenue. Naver evaluated that the advertising performance measured after the Home Feed application was more than twice as high as before.
5. Naver's expansion of 'skill' partnerships with external services can also be viewed in the same context. Skills already act as an advertising slot by exposing the specialized services of external companies along with purchase links. The possibility of exposing targeted ads to different users in response to natural language questions is also a reason. It may already feel like a pre-implementation of a structure like Naver Shopping, where external malls and Naver's own services are mixed, under the name of skills in CLOVA X.
6. However, the responses of services integrated with 'skills' are not yet sophisticated enough to respond well to users' natural language questions. If a question deviates from a set format, it often fails to answer or gives an irrelevant response.
7. But technology will not stand still. If it becomes more advanced in the future, skills could become a new product that serves as an alternative to the existing Naver Shopping search ads.

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네이버 생성형 AI 검색 ‘클로바X’에 연동된 경쟁사들, 새로운 커머스 광고 큰 그림이 보인다?

1. 네이버의 생성형 AI 기반 대화형 검색 서비스 클로바X(CLOVA X)가 지난달 30일 직무 및 채용 정보 서비스 ‘원티드’, 여행 정보 및 예약 서비스 ‘트리플’, 쇼핑앱 ‘컬리’와 스킬(Skill) 연동을 시작했습니다. 지난해 11월 카셰어링 플랫폼 쏘카와 스

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