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Marketing firms feel the heat
The economic downturn is dealing an enormous blow to marketing companies, said the director of the Ha Thai Advertising Joint Stock Co., Ha Huy Cuong.
Most of the nation’s 3,000 plus marketing firms are in dire straits, said Cuong, who noted that nearly half of his clients have recently rejected contracts for putting up billboards.
At the same time last year, Ha Thai had received orders worth billions of VND, many for billboards at Hanoi’s bus stations, Cuong said. Now, he added, even a 10 million VND contract is something extraordinary, and many of the city’s bus stations are now without advertising.
The marketing industry in Vietnam is worth more than 300 million USD per year, according to the Ministry of Planning and Investment.
But, Ha Van Tang, vice chairman of the Vietnam Advertising Association, is predicting a gloomy future for the sector, with falling revenues likely to be followed by extensive staff layoffs.
“A lot of companies may have to close because of the crisis,” Tang said.
Marketing firms are bemoaning declining revenues from print and television advertising, as well as from public relations and event organising. Even internet marketing, the industry’s fastest-growing segment, is also suffering from the economic downturn. Online newspaper Vnexpress said advertising revenue was down about 20 percent in the first quarter of 2009.
According to an unofficial report, internet advertising in Vietnam was worth about 64 billion VND (3.7 million USD) in 2006, a figure that had nearly doubled by 2008 to 122 billion VND (over 7 million USD) and which could reach 400 billion VND (23.5 million USD) by 2015.
Nguyen Thuy Nga, who works for the KCD marketing firm in Hanoi, said the Malaysia Tourism Administration had been a regular client, with yearly contracts to promote Malaysia to Vietnamese tourists, but they didn’t renew their contract last year.
She said her firm’s revenues are “sharply less” than they were a year ago.
To try to survive the difficult times both Cuong and Nga’s companies try to strengthen their customer service and discounting services by 10-20 percent, as well as try to attract new clients with lower commissions, particularly on smaller, lower-margin contracts.
Even television stations, often viewed as the most effective advertising medium, are cutting the costs of airtime by 20-25 percent to attract business advertisers, said Nguyen Hoai Tram, director of the advertising office of Vietnam Television (VTV).
Some marketing firms are diversifying services to global customers as a survival strategy, said Cuong. He said his company is more heavily promoting its security, janitorial, computer network installation and maintenance, and accounting services to its corporate clients.
VietNamNet, Vietnamplus
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