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Vietnam ad industry shrugs off recession
The local advertising industry appears to have bucked the downturn as producers are increasing ad spending, especially on consumer products, insiders say.
Ad spending in the first nine months reached US$450 million, up 26 percent from the same period last year, according to market research company TNS Media Vietnam. The growth was much better than the 8 percent that analysts had projected for the whole year.
Dao Van Kinh, vice chairman of Dat Viet VAC Media and Communication Holdings Group, said the industry was lucky to achieve higher growth than expected.
“It’s great because local consumers only cut spending on vehicles, electronics, travel and entertainment while expenditures on milk, beverages, toiletries and medicine did not fall.”
In other countries, companies in the financial and property sectors spend the most on advertising, but the biggest spenders in Vietnam are producers of fast moving consumer goods, Kinh said.
TNS Media said in the first nine months ad spending on beverages increased by a whopping 107 percent while household products rose 58.8 percent from the same period last year. Meanwhile ad expenditures on vehicles and financial services declined by 32.3 percent and 56.8 percent respectively.
Do Kim Dung, head of Ho Chi Minh City-based Vietnam Institute of Advertising, said the economic slump had different effects on ad spenders and had created a large gap between sectors.
Even among each sector, the spending was differentiated, as some companies, including Vinamilk, Tan Hiep Phat and Masan Food, wanted to step up promotions while their rivals cut back on advertising, Dung said. The huge expenditures by these companies helped boost the whole sector, he said.
Beverage maker Tan Hiep Phat, for instance, spent nearly $42 million on advertising in the first nine months, according to an industry source.
Dung said consumer goods increased ad spending as they were trying to tap into markets in new areas, where sales have more potential to grow than in big cities.
Tran Thi Thanh Mai, General Director of TNS Media Vietnam, said it was not just the two giants, Vietnam Television and Ho Chi Minh City Television, but also local television networks that benefited from rapidly rising ad revenues.
The company said television ad revenues rose the most in the nine month period at 36 percent. Print media ranked second with a five percent increase while radio ads registered a very slight increase.
2010 prospects
Nguyen Thanh Tam, a senior executive at research firm Nielsen Vietnam, said many companies expect to post two-digit growth next year as consumer sentiment has improved.
A Nielsen survey released late last month found that consumer confidence in Vietnam has increased for the first time since March 2007.
With the increase, the country is now the fourth most confident country in the world, Nielsen said. More than half of the Vietnamese surveyed believe they will be out of the recession and job prospects will be good to excellent in the next 12 months.
Tam said many companies would increase ad spending next year, or at least keep the ad budget stable.
“It’s no surprise if big brands like Unilever, Tan Hiep Phat or P&G continue to advertise more,” Tam said. As the country opens its doors wider under World Trade Organization commitments, it is more necessary for leading firms to promote their products heavily to retain their position.
An emerging economy, Vietnam will have more companies in the future, and advertising demand will therefore grow at a fast pace, said Kinh of Dat Viet VAC.
Besides the consumer goods sector, which will absolutely increase ad spending, property and telecommunication firms also need to advertise more as the competition will be really tough, he said.
The only unknown is the financial and banking sector, Kinh said. There would be more advertisements from this sector only if local banks decide to approach their consumers instead of just focusing on branding, as is happening now.
Total spending on advertisements in Vietnam hit $500 million last year, up 17 percent from 2007. Earlier, the year-on-year growth was 18 percent in 2007 and 40 percent in 2006, according to TNS Media.
thanhnien, tbktsg
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