Good morning. We will now begin NAVER's 2023 Q3 earnings conference call. In today's conference call, we will hear from NAVER a presentation, and then we're going to take questions from the audience. If you have any questions, please press star followed by one. Now, without further ado, I'd like to hear NAVER's presentation.
Good morning. I would like to thank the analysts and investors for joining NAVER's 2023 Q3 earnings presentation. As always, we have our CEO, Choi Soo-yeon, and CFO, Kim Nam-sun, joining us on our call to walk you through NAVER's business highlights and strategies and financial highlights, after which we will entertain your questions. Please note that the earnings results are K-IFRS-based, provided for timely communications and have not yet been audited by an independent auditor, and hence are subject to change after such review. With that, I will turn it over to our CEO to present on the business highlights.
Good morning, I'm Choi Soo-yeon, the CEO. In 2023, despite the ongoing economic slowdown, NAVER is strengthening the competitiveness of its existing businesses by introducing various measures to improve search efficiency, content consumption, and users' length of stay. At the same time, we have been exploring new monetization avenues and undertaking a careful restructuring of cost structures to enhance profitability. As a result, we achieved a significant level of operating profit in Q3, even during the seasonal off-peak period. In August, we shared a concrete roadmap for our generative AI service lineup and monetization in response to technological changes. In October, our investments to secure future technologies led to the launch of a platform-building project in the Middle East, affirming our competitiveness in the global market.
First, I will discuss the search platform business. In Q3, despite the continued weaknesses in the online advertising market, we continued our efforts to further enhance our platform, leveraging AI technologies and launched new products tailored to advertisers of performance-oriented needs, and worked on improving the efficiency of existing products to strengthen our competitiveness. In October, we focused on understanding users' interests and providing personalized and dynamic search results in Smart Block format. We also worked on revamping the UX/UI of integrated search, taking into account the usability of future AI search services, so as to deliver new user experiences. This revamp has enhanced the readability and visibility of search results, which is anticipated to improve users' search efficiency and lead to increased clicks and longer dwelling times in the future.
In addition, we have introduced the Trending Together blog and the Search Feed blog to allow users to seamlessly transition to new discoveries. Thanks to the summer vacation season, Place Ads maintained a strong performance, attaining a record high daily average revenue. Its Q3 revenue grew by 70% compared to the same period last year. We continuously worked on enhancing the matching quality of diverse search intents with various multi-contextual queries, as well as expanding exposure advertising materials like images to improve advertising efficiency. As a result, as at the end of September, the number of Place Ad paying advertisers jumped 51% to 130K compared to the same period last year. Efforts to expand and apply NAVER's advertising platform capabilities to external media also persisted.
This quarter, we introduced a product enhancement with proven advertising effects on platforms like Danawa and Enuri, frequented by users interested in digital and home appliances. Going forward, we will continue to explore new retail media channels, as well as strengthen our collaboration with existing media to enhance efficiency in areas like ad placement, ad features, and keyword matching, so as to strengthen our presence in the market. In the case of display advertising, demands related to gifts and the Asian Games worked to its favor, but decreased PC sales and continued weaknesses in distribution and construction sectors led to an overall downturn. However, all is not bleak, as the automotive, healthcare, and F&B sectors are still recovering and performance-based advertising is growing. We aim to further enhance our platform and expand premium offerings, so to position ourselves as the most preferred platform when the economy fully recovers.
After conducting tests in Q3, we officially launched a new NAVER app with an expanded, highly personalized recommendation service starting from November 2nd. The service is offered through a total of four tabs based on topics, namely shopping, home, content, and Clip. At the bottom of the home screen, the new personalized content recommendation service, called Home Feed, has been introduced. With this improvement, we can tailor content to users' interests and offer content creators who produce high-quality content more exposure opportunities. Among them, the short-form service, Clip, which was launched the last quarter, achieved its annual target of 1 million DAUs and 10 million daily views in August, laying the foundation for growth ahead of schedule. We plan to expand the category and creator programs up to the year-end to enhance both the quality and quantity of content.
In line with the NAVER's app redesign, moreover, we are exploring new advertising inventory and introducing new products with improved advertising effectiveness and information delivery capabilities so as to drive revenue growth recovery. The interstitial ad showcase, which was launched in Q2, is being actively utilized in major campaigns by well-known brands like Samsung Electronics, Apple, Disney, Dyson, and K Bank. We plan to enhance branding effects in line with the app revamp schedule. We are preparing to provide a new search experience by using NAVER's generative AI, HyperCLOVA X. Cue, our AI-based next generation search service, which we initiated PC testing for in September, is showing greater user usability.
Cue is designed with a focus on improving user satisfaction and reducing hallucinations to enhance search reliability through integration with NAVER vertical services, also showed higher reliability ratings and user evaluations compared to competitors. Users also expressed high satisfaction with shopping and local search results. Therefore, starting from November, we plan to partially apply this to PC-integrated search by utilizing high quality data exclusively available to NAVER and expand it into various subject areas. Next year, we will roll out Cue to the mobile environment and gradually expand the service by supporting multi-model technology to enhance NAVER's SGE. We are also diligently preparing tools to make it more convenient for creators, businesses, and sellers within the NAVER ecosystem to utilize our services and increase their productivity.
CLOVA for Writing, which we are preparing to enhance the productivity for creators, began testing on October 16th. Although it is still in the early stages, posts containing AI-generated content already make up nearly 30%, and we have received positive feedbacks from nearly 70% of the users. We will also newly unveil CLOVA for Ad tailored to advertisers. We are preparing a pilot program combining conversation experience based on generative AI, together with traditional search advertising and display advertising in collaboration with Nike at the end of November. Since its announcement in August, CLOVA for Ad has generated significant interest from many advertisers. As a result, we plan to attract more advertisers in the first half of next year.
Through this, we aim to enhance the efficiency of existing advertising products and improve the ways users consume and explore advertising information. Next, I will move on and provide an update on our commerce business. Despite an overall sluggish online shopping market in Q3, NAVER's commerce GMV have reached KRW 11.9 trillion, marking a 14.3% growth compared to the same period last year. Even after excluding the impact of the Poshmark acquisition, NAVER maintained a significant growth trajectory with an 8.2% increase YOY, outperforming the market, such as a holiday and summer vacation season pushed up the service GMV.
The on-platform product GMV, excluding affiliates, amounted to KRW 8.2 trillion, up 15.9+% year-on-year, while the service GMV jumped 46.5% YOY to record KRW 1.8 trillion. Among the product GMV, brand store GMV saw a 46% increase YOY, thanks to the rising transaction volumes across various industries. KREAM has been instrumental for this growth and expanded its share in the product GMV by attracting new customers and diversifying its product categories. The service GMV also achieved a steady growth, primarily driven by the rapid increase in travel-related transactions in relation to the vacation season and the extended Chuseok holiday. Brand stores saw a steady growth, particularly in digital electronics brands with high GMV contributions, as well as in food and healthcare categories where the delivery guarantee service proved effective.
The number of stores increased evenly across diverse industries, including fashion and beauty. The total count of the brand stores grew to more than 2,000. Furthermore, on October 5th, we officially launched a brand solution package that harnesses various technologies and data for integrated brand marketing. In Q4, we plan to introduce a brand lounge solution that enables diverse membership management and exclusive membership benefits and events. We will also open a brand store tab and showcase services aimed at enhancing engagement between brands and consumers. The market conditions faced by commerce ads were not favorable as advertisers cut back on marketing expenses. But the provision of shopping mall product ads for digital and home appliances, coupled with increased seasonal demand for electronics, led to a boost in sales in the relevant industry.
Furthermore, by automating the expansion of AI-driven advertising slots, we were able to enhance both user experience and monetization without compromising user convenience. As 1P advertising continues to grow and the revenue share of the Posh Show, live streaming broadcasts, expands rapidly, we anticipate Poshmark will play a crucial role in advertising as well as in revenue growth next year. As such, by increasing the conversion rate and maintaining growth while focusing on efficient manpower management and marketing to ensure cost efficiency, Poshmark achieved an EBITDA surplus for three consecutive quarters. Amidst our changing global macro environment and volatile e-commerce ecosystem, NAVER consistently reviews and upgrades its strategies, prioritizing the interests and experiences of both sellers and users.
Going forward, NAVER will remain vigilant about market changes and employ proactive strategies, utilizing our distinctive NAVER Shopping portfolio, which boasts the highest visitor count in Korea and the most friendly environment for more than 2,000 brands and 600K volunteer sellers, so as to deliver greater value to both users and sellers and to ensure a healthy, mutually beneficial growth. Next, let me provide updates on the Fintech business. In Q3, NAVER Pay's TPV recorded KRW 15.2 trillion, up 22.5% YOY and 4.4% QOQ. Among them, non-captive TPV recorded KRW 6.9 trillion , up 46% YOY, backed by continued increase of on-site payments, the addition of large new merchants, including Airbnb, and the positive performance of summer vacation, overseas travel-related industries.
As such, our NAVER continued to see an expansion in its external ecosystem. Thanks to the growth in MST, as well as booking and other payments, offline GPV recorded KRW 1.7 trillion, which is twice the amount compared to the same period last year. In particular, MST payment saw a notable growth as since NAVER Pay points and money were added to payment options at the end of September, making it now usable at all offline card-accepting merchants. We will continue to enhance user payment convenience and strengthen the offline payment ecosystem moving forward. When it comes to our financial businesses, we've expanded partnerships for the loan comparison service, offered simple savings account subscription service, and transfer deposit loan guarantee product recommendation service, launched a my insurance coverage analysis service, and introduced shareholder verification system for its online stock discussion forums.
As such, there is high potential services related to securities, real estate, and finance under the umbrella of NAVER Pay have been reinforced. Going forward, we'll continue to expand our product lineup and provide more competitive financial products by leveraging quality payment and financial traffic, and to leapfrog into a comprehensive financial platform. Next, let me move on to Webtoon's Q3 performance. Despite the resumption of full-fledged offline activities and continued marketing efficiency policies in Q3, our IPs and platform upgrade efforts continued and resulted in the global Webtoon integrated GMV of KRW 479.4 billion, of 5% YOY and 9% QOQ. In particular, Naver Webtoon saw a growing share of original and serial works and successful IPs in Japan, and posted the highest GMV growth rate.
As a result, it ranked number one in terms of monthly Webtoon app user counts in Japan. Webtoon in Korea also recorded a modest growth, with the inflow of users following the success of major IPs adaptation into video content and active CRM-based user activation. In the U.S., a strengthened AI-based recommendation service and the successes of new releases helped to maintain the growth trajectory, despite blockbuster webtoons staying on hiatus and marketing spending cuts. In Q3, we introduced a new SNS communication feature with the platform, called Creators Home, to facilitate communication between creators and readers by sharing their latest updates and various other content. In just a short period, over 1,700 creators have opened their homes, attracting visits from over 8 million users. This has also translated into increased engagement with their works.
Our focus on strengthening profitability continued in Q3, i.e., enhancing marketing efficiency and actively exploring monetization efforts with regard to ad and IP businesses. In addition to paid content, we introduced rewarded ad products in Japan and North America, which led to a rapid growth in advertising revenue. IP business expansion also resulted in greater sales. Going forward, we plan to strategically maintain the optimal balance between profitability and growth, instead of relying on one-off cost cuts, to, by raising overall resource, input efficiency, and expanding revenue. In Q3, the rich story portfolio of Webtoons led to numerous domestic and international hit works, reaffirming the value of Webtoon IPs. Netflix adaptations on NAVER Webtoon, Mask Girl and DP2, ranked number one, not just in Korea, but also in several other countries.
Since the release of the videos, our Webtoon GMV jumped to five and 20 times, respectively, showing a strong influx of viewers for the original works. In Q4, we have highly anticipated works like Doona! and Vigilante lined up for productions and screening. In Japan, NAVER Webtoon original, Teenage Mercenary, recorded monthly LINE Manga GMV of KRW 1.6 billion, which is the highest in 2023 for a single work. Furthermore, the pop-up store for ND goods opened in Q3 was a big hit, attracting around 120K visitors. By expanding offline touch points like this, we aim to increase not only additional revenue, but also the reach of and royalty to our IPs.
When it comes to NAVER Cloud, we are focusing on expanding business in the cloud infrastructure and platform services market and the SaaS market, leveraging the generative AI foundation model. Our Gen AI lineup unveiled in this year's DEWN conference in August, including the foundation model, business, and creative productivity enhancement on Neurocloud-based, our customer tailored AI solutions, user experience incorporating NAVER's core services are under test and in the process of service enhancements and updates in line with the original timetable. The foundation model, HyperCLOVA X, which functions as a cornerstone of all technologies, is currently undergoing upgrades from its initial version in terms of coding and domain-specific data. The conversational AI service, CLOVA X, released together with HyperCLOVA X, is being utilized primarily for productivity enhancements such as information recommendations, domain-specific queries, summarization, translation, and writing.
Service improvements are currently underway based on our user feedback, focusing on addressing issues like repetitive answers and generic responses. We plan to introduce new features like external document references, imaging, editing, and integration with external services, and conduct relevant tests within the year to enhance productivity. We have in our pipeline a work productivity enhancement solution called Connect X. We started testing the solution on NAVER Cloud on October twenty-sixth and initiated alpha testing involving NAVER employees today. The solution will provide specialized tools for different job roles, such as coder, and enable efficient work-related communication and generate process and summarize various documents to enhance work efficiency. Moreover, we plan to further refine the AI models and features and advance the services. Finally, the integration of the foundation model with NAVER services for personalized B2B services is also progressing smoothly. Neurocloud for Clova, HyperCLOVA.
HyperCLOVA X, which boasts strong security, thanks to its physical independence, has compiled significant references and preparing for its debut in November. The upgraded version of the CLOVA Studio and AI development tool, customizable for businesses, using business data based on HyperCLOVA X, was released on October 18th, and is currently under test amid high expectations of various startups and enterprise customers. We expect it will become a new revenue source. As such, we aim to leverage our advanced technologies designed for B2C as well as B2B services, and NAVER's proprietary data to provide tools and tailored services for users, creators, and businesses, to help enhance their productivity and efficiency while generating new income sources.
NAVER has invested in AI, robotics, and cloud technologies to secure future technologies, and there recently was an instance where we were able to affirm the potential overseas applications of such technologies. In October, we've announced that NAVER will be building a digital twin product platform for the Saudi Arabia's Ministry of Municipal Rural Affairs and Housing. For the next five years, NAVER will build and operate a 3D modeling based digital twin platform involving five Saudi cities, including Riyadh, and use the platform for urban planning, monitoring, and natural disaster predictions. This is a significant achievement, as it shows how highly NAVER's technologies are recognized by global businesses in the next generation, urban planning, B2B, and B2G markets. Going forward, expect to expand our footprint beyond Saudi Arabia to other parts of the world.
Besides, Snow's Gen AI-based photo product within the camera app and yearbook by EPIK have garnered significant attention from users across the globe and resulted in new revenue generation. EPIK, in fact, ranked number one in app stores in 56 different countries and attracted new paid subscribers. We will continue to showcase our diverse AI-based product lineups and drive our growth. Last but not least, I would like to share with you NAVER's ESG achievements. Since 2022, NAVER strengthened the alignment between the management KPIs with its ESG targets based on 70 ESG strategies, and has transparently disclosed to the public its annual ESG report, containing its ESG outcomes, long-term directions, and goals. Recently, NAVER received the highest rating of A+ in the comprehensive assessment done by KCGS under the Korea Exchange for its ESG achievements.
NAVER will continue to enhance its ESG framework and engage in pioneering ESG management activities to remain as a trusted company in the future. Next, the CFO, Nam-sun Kim, will walk you through Q3 financial performance.
Good morning, I'm the CFO, I will present Q3 financial results. NAVER's Q3 revenue recorded KRW 2.4452 trillion, up 18.9% YOY and 1.6% QOQ, backed by the growth in key businesses. Without the effect of Poshmark acquisition, revenue was up 12.9% YOY. Despite the slow ad and commerce business in Q3, the adjusted EBITDA, excluding the volatility of stock-based compensation and asset depreciation, recorded KRW 550.6 billion, up 18.7% YOY and 6.9% QOQ.
While EBITDA margin recorded 22.5%, up more than one percentage point QOQ. The adjusted EBITDA once again reached a new all-time high, thanks to our company-wide efforts to improve the cost structure, which led to a slowdown in the rising labor and marketing expenses. OP increased 15.1% YOY and 2% QOQ, and came in at KRW 380.2 billion. OP margin edged up QOQ to record 15.5%. Next, let me discuss revenue by each business area. The search platform recorded KRW 898.5 billion, up 0.3% YOY and down by 1.3% QOQ.
Despite the sluggish online ad market, in Q3, the search ad revenue rose 3.5% YOY, thanks to our sustained efforts to advance the platform and the inherent strength of NAVER as a media channel. NAVER, in fact, is the only global ad platform to post a positive quarterly growth even during the pandemic. Display ad revenue declined by 9.5% YOY, mainly due to the continued impact of the economic slowdown. As mentioned, in Q2, this decline is expected to reverse as businesses resume ad spending if and when the economy recovers. But to accelerate this rebound, we have put in place various measures, including revamping the NAVER app and refining the overall platform, as well as expanding premium offerings.
The commerce revenue recorded KRW 647.4 billion, up 41.3% YOY and 2.3% QOQ. Even without Poshmark, the revenue increased 14.7% YOY, outperforming the average growth rate of the Korean commerce market. In particular, commerce ad revenue increased by 5.5% YOY and 0.7% QOQ, thanks to the introduction of ad slot optimization technology. Commission and sales revenue rose 105% YOY and 3.5% QOQ. The inclusion of Poshmark and brand stores, travel, KREAM services with higher commission rates contributed to the revenue rise. The subscription revenue from membership fees increased 29.7% YOY and 4.3% QOQ, with the number of subscribers increasing by over 20% compared to the previous year.
The Fintech revenue recorded KRW 340.8 billion, up 15.1% YOY and 0.3% QOQ. The total TPV stood at KRW 15.2 trillion, up 22.5% YOY and 4.4% QOQ. Among this, our non-captive TPV jumped to 45.8% YOY and led the overall growth. Offline TPV recorded KRW 1.7 trillion, increasing by twofold compared to the same period last year, thanks to the addition of Samsung Pay MST payment feature and the rise in booking and order payments. Content revenue recorded KRW 434.9 billion, up 39.5% YOY and 3.5% QOQ. Global Webtoon GMV maintained its upward trajectory, recording KRW 479.4 billion, up 5% YOY and 9% QOQ.
The success of video adaptations of the IPs and improved user activity, backed by platform enhancements, including stronger AI recommendation service, helped push up the GMV. Webtoon in Japan, in particular, saw a steady GMV increase, thanks to the expansion of original and serial works. SNOW's revenue jumped 36.1% YOY, driven by the success of the new AI products, including the profile and yearbook products in SNOW's camera app. ZEPETO also enjoyed 10.3% increase YOY, thanks to the peak season effects and the launch of 2D animation characters. Cloud revenue recorded KRW 123.6 billion, up 30.3% YOY and 18.3% QOQ.
Among this, our B2B revenue increased 19.9% YOY and 11.4% QOQ, thanks to a change in NEC-NCP revenue recognition method and an increase in the number of LINE Works paid IDs. Other revenues are grown by more than fourfold YOY, driven by the new revenue generated from the Jeonbuk Education Office's Whaleb ook platform building project. Next is on expense items. Development and operation expenses, including payroll, declined 2% QOQ, with the ongoing tight hiring control and sell-off of Webtoons consolidated equity in some of its subsidiaries. The increase in marketing expenses was kept at below 4% YOY, without the effect of Poshmark acquisitions, thanks to the cost management measures of key businesses, including content.
Infrastructure expense increased, 10.8% QOQ, due to the completion of Gak Sejong Data Center and new AI equipment investments, but only inched up slightly compared to the year before. We will continue to make adequate level of investments in AI equipment in line with the launch of new AI models and services, but this year's, total infrastructure costs will not exceed 7% of revenue, as initially planned. Next year, we also plan to continue investing in the additional GPUs required for enhancing AI, but keep that at a reasonable level, not deviating too much from the current proportion in the total infrastructure costs. Next, let me discuss the P&L by business.
First, combined margin of search platform and commerce improved slightly QOQ, primarily because of an increase in search ad share in search platform and a marked growth in travel fee revenue with high contribution margin in commerce. Fintech margin rose close to 9% QOQ, thanks to the increase in booking revenue driven by seasonal factors, such as summer vacation. When it comes to content, losses of each segment widened compared to the previous quarter. Webtoon internal-facing ad revenue decreased and one-off accounting issue were the main drivers. If such items are adjusted, then Webtoon showed a positive adjusted EBITDA under efficient marketing strategies. SNOW improved its profitability compared to the previous quarter through monetization efforts and rationalization of its business portfolio. Moving forward, efforts will continue to reduce losses in the content business.
Without the impact of the decrease of stock-based compensation expenses, our cloud P&L stayed flat QOQ. Consolidated net profit in Q3 recorded KRW 356.2 billion, up 53.8% YOY and 24.2% QOQ. The increased gains from investments in associates and declines in FX losses attributed to the improvements YOY, while increased valuation gains on financial products and the impact of the base effect from the Q2 valuation losses related to fund entities led to the QOQ results. Finally, I will discuss the cash flow and, balance sheet. Q3, free cash flow recorded KRW 189.9 billion, up KRW 169.4 billion, QOQ, primarily due to an increase in adjusted EBITDA and a reduction in the amount of corporate tax payable.
A total of $800 million in loans were taken out for the acquisition of Poshmark in January of this year, but a total of $4.8 million was repaid till Q3, resulting in an additional decrease in the outstanding loan balance. In addition, since the second half of last year, we have been rebalancing our non-core investment asset portfolio, including direct and indirect funds, investment stocks, and beneficiary certificates. IT company to do so. They are NAVER's debut samurai bonds, issued by a domestic private company without a guarantee for the first time in seven years. Based on its sound credit standing, NAVER managed to issue the bonds with different maturity tranches, ranging from 3.5 years to 12 years at an average issuance rate of 1% level.
Notably, NAVER succeeded in issuing the bonds with a maturity of more than 10 years for the first time among domestic issuers. The bonds are worth JPY 20 billion in total, and they will be used to pay back yen-denominated borrowings due sometime in November. Through the latest issuance, NAVER gained access to a new source of funding, a.k.a. the Japanese bond market. This will further solidify NAVER's capability to secure stable liquidity to drive its mid- to long-term growth. Finally, pursuant to the newly announced shareholder return plan this year, NAVER paid to the shareholders on August 22nd cash dividends worth KRW 62.4 billion, which is around 15% of the average two-year consolidated free cash flow.
Also, in line with the newly announced treasury stock retirement plan this year, aimed at enhancing shareholder value, NAVER resolved in the October 31st BOD meeting to retire the treasury stock worth 1% of issued shares and will cancel as of November seventh, around KRW 305.3 billion worth of stock, based on the closing price on October thirtieth. This ends the Q2 financial performance update. We will now take your questions.
[Foreign language]
Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per each participant. The first question will be provided by Jin-gu Kim from Kiwoom Securities. Please go ahead with your question.
[Foreign language]
Th ank you very much for taking my question. I have a very high-level question. It's been two months since you held the DEWN 20 23 event, and I understand that since then, the company had put in a lot of efforts to try different things and run different internal tests. I would like to understand what the outcome is like versus your original expectation, especially when it comes to AI-based initiatives. I believe that the P's and Q's, the quantifiable aspects, are very hard to measure. So it's quite important for us to understand the qualitative assessment that the company has. And also, the second part of the question is, does the company have a plan to disclose going forward specific KPIs relating to, for instance, including your Q solution as well as other commerce solutions?
I believe that if the company provides more visibility regarding a very solid KPI, figures that will really help the market have a better understanding. So would you be planning to provide us with an update on that?
[Foreign language]
Yes, regarding the overall AI services and the technologies, I understand that there's been a lot of questions as to how it will play out going forward. And currently, in the domain of AI-driven initiatives, there's a very fierce competition. So NAVER, from the very start, we had been thinking very hard as to whether we will be able to meet market expectation in terms of our technological and service offering related competitiveness, and whether we will be able to live up to the roadmap that we've set for ourselves and satisfy our B2B customers and our other client base.
I can tell you at this point that the results that we are seeing are better than what we had originally expected. We've been received very well, very positively in terms of the B2C services that we've provided, including Cue and CLOVA for Writing and also for B2B solutions as well. We've been able to build on one by one, different references, and in so doing, was able to confirm that there is market feasibility or viability in terms of competition. And so at this point, the company is developing different plans so that we may be able to, going forward, share the specific KPIs as we, you know, go ahead, as a means for us to communicate with the market. So yes, we are considering that at this point.
[Foreign language]
The following question will be presented by Jae-min Ahn from NH Investment & Securities. Please go ahead with your question.
[Foreign language]
Thank you for taking my question. I'm Jae-min Ahn from NH Investment & Securities. My first question relates to the fact that I know that you've started monetizing from October, your brand store and guaranteed delivery. Since it's been about one month, can you provide us with an update regarding the take rate from these different products, and what impact do you think that this will have on your P&L for next year? Second question is, can you also provide us with an update with the overall advertisement market backdrop, especially for Q4 as well as first half of next year? Because we, I believe that we are still in a, you know, quite difficult economic cycle.
[Foreign language]
Since we are only at the very beginning of this monetization phase, I'm a bit cautious as to specifically tell you as to what our top line revenue contribution is. But going forward and, you know, come next year, we believe that its contribution to our top line revenue will be quite significant. We will continuously keep a very close watch of what our sellers performances are looking, look like and also receive their feedback, and we'll continuously also endeavor to further scale up the quality of services. Regarding the question on the overall advertisement market forecast for Q4 and next year, we've experienced October now, and I believe that we are seeing a bit of a, a signs of recovery from the ad market versus Q3.
We think that in terms of the search ad, we will be able to grow more than the growth that we've seen in Q3 during the fourth quarter. Also for the commerce, I believe that we will be able to slightly outperform the Q3 levels, especially also in light of the fact that the overall economic GDP growth is also expected to inch up.
[Foreign language]
Regarding the question and take rate, as you know, we have applied about 1% - 2% of fees on Smart Stores. For brand stores starting October, we applied about 2% - 4%. So it's been about a month, and we see for the branded stores, we will be able to get more than a mid-level of an increase in terms of the take rate versus the legacy take rates that we have applied. So we think that the contribution going forward in the fourth quarter is going to in shop, and I believe that, you know, since it's the revenue growth is going to be by a larger margin compared to the GMV growth.
[Foreign language]
The following question will be presented by Dong Huan Oh from Samsung Securities. Please go ahead with your question.
[Foreign language]
Thank you for taking my question. My first one relates to the fact that you've changed the revenue recognition method for your cloud business, the NCP. What is the impact of that? Next year, how much of an increase should we expect in terms of your infrastructure spending?
[Foreign language]
So the impact on the figure for the cloud business was a one-off figure. Previously, we've made an adjustment in the overall period upon which the revenue had been recognized. And because of that impact, there was a carryover impact for revenue recognition in terms of the revenue that was incurred previously. And so that had an impact of about KRW 9 billion positive impact or plus impact for the Q3 number. If you were to exclude that one-off impact, that on a QOQ basis, basically, the year-over-year growth rate is flat.
[Foreign language]
Regarding our projections for next year's infrastructure spending, at the beginning of the year, we communicated that our infrastructure investment would be controlled below 7% up against the top line revenue, and we expect that going forward in the next year, we will be able to keep it to that level. And so in terms of the CapEx investment, 2024 CapEx will not much deviate from what we've seen back in 2023. I say that because, we have completed the construction, phase one construction for Sejong Gak, the data center, and so that's going to have an impact of lowering the data center CapEx by about KRW 100 billion. But on the other hand, in order for us to further scale up our AI capabilities, we will continue to make investment into GPUs.
So that will have a replacement effect or versus the decline that we see in data center investment. So once again, versus the figure that we've seen in 2023, we will not be too far off from the level that we've invested in 2023, and also we will keep to make sure that the infrastructure spending share against our revenue keeps within the target. Well, thank you very much. Since there are no more questions in the queue, we would like to, at this point, close NAVER's Q3 2023 earnings presentation. We look forward to your continued support. Thank you.