Tuesday, September 2, 2008

Counterpoint: More on Vietnam Advertising and 26% Inflation

When you turn on Bloomberg and see the main discussion is on the Inflation rate in Vietnam you start to wonder if you really are somewhere. Aside from the dogs eating below my Vietnam Ho Chi Minh City Hanoi, Inflation, 26%, expensive shit, communists, Coca Cola, TNS, WPP, advertising, Unilever, Procter and Gamble, P&G, Bloomberg TV, newsstreetside table and whatever other little tidbits I pick up on the culture and business climate from day to day it takes on a whole other perspective when Bloomberg picks it up. Don't they have anything better to do? But add to that the significan't foreign investment here, WPP's entry into the local market and the various and almost breathtaking construction on even the most pedestrian of city streets and the picture grows into one of startling clarity: This shit certainly ain't happening in the United States, or western Europe for that matter. Last week I featured a story from one of the local news dailies, that, like most media stories here, lacked crucial numbers, adequate research and any assembly of fact checking or accountability. Today, I feature a story from Vietnam Business News, a blog on business trends, that sheds a little more light on things and actually does interview a number of people with reasonable command of real numbers. Check it out and paint your own picture. Be sure to include the pooch munching under my table d'hote.

(The story is edited for brevity but you can read the whole thing by clicking on the link, below.)

Sunday, August 31, 2008

Businesses still throwing money into ads, despite high inflation

Experts say advertising turnover has been increasing steadily since the beginning of the year, though a lot of businesses have cut their budgets for advertising campaigns to cope with difficulties. One of the reasons that explain why the turnover of the advertisement industry keeps rising is that businesses’ 2008 financial plans were fixed before and counted expenses for advertisement campaigns. Moreover, enterprises have to maintain advertisement on mass media in order to popularise their products and boost sales in the context of high inflation.

Martin Gil, General Director of Coca Cola Indochina, is one of the people who does not advocate the viewpoint that businesses should cut expenses for advertisement and promotion programmes when they face difficulties. He said that most businesses still spend great sums of money for advertisement so as to retain their market shares.

Tran Thi Thanh Mai, Managing Director of TNS Media, an advertisement company, said that many businesses have cut budgets for advertising and marketing, but others have spent more money on ads, especially ad pieces on new advertisement channels. The new advertisement channels mean taxi cars, outdoor LCD screens and film channels, like Star Movies and HBO, which seem to have attracted a lot of watchers.

Mai said that the reduction in the turnover from traditional advertisement channels does not mean that the turnover from the advertisement industry as a whole has decreased. Turnover from ads will keep rising in 2008, TNS Media has cited. The total turnover from ad pieces on the TV, radio, printed newspapers and journals that TNS Media surveyed in the first six months of the year increased by 16.2% over the same period of last year, reaching $234mil. TV remains the channel that attracts the most ad pieces. It brought in $171mil in turnover, up by 14.3% over the same period of 2007. Meanwhile, ads in print newspapers brought in $42mil (+ 17%), journals $20.4mil (+ 31.2%), radio $828,000 (+ 51.5%, the highest growth rate).

Telecommunication service providers, body care and cosmetics, drinks, food and pharmaceutical producers proved to spend the greatest sums of money on advertisements, $115mil, which represents a 24.9% increase over the same period of 2007. Of these five fields, only the budget for advertising of body care and cosmetics producers saw a decrease, of 3.1%, while the budgets of the other four fields increased by from 6.4% (drinks) to 103% (telecommunications).… and drop in 2009.

Market surveyors forecast that the high inflation and Vietnam’s economic problems will influence the advertisement industry in 2009, since the 2008 business results may prompt small- and medium-size businesses to cut budgets for advertising next year. Mai said that advertisement industry is a service business, the development of which depends greatly on the health of clients and the national economy’s performance. “Therefore, economic problems could be one of the reasons that lead to a reduction of the turnover in the advertisement industry,” she said.

Nevertheless, Mai said that not all companies are trying to cut budgets for advertising. She added that the most important thing is that businesses make wise choices. Experts and advertisement firms estimated that the total turnover of the advertisement industry in 2007 was $500mil, hoping that the turnover will still be satisfactory in 2008 and the next years. The 10 companies that spent the largest sums of money on advertising in the first half of 08, according to TNS Media, were:

Unilever Vietnam,

P&G Vietnam,


VMS MobiFone,

Dutch Lady Vietnam,

Tan Hiep Phat Brewery Company,

Nestle Vietnam,


Vietnam Brewery Company and

Abbot Laboratories Inc.

The total sum of money the 10 companies spent on advertisements was more than $55.7mil, a decrease of 2.1% over the same period of 2007. Of the 10 companies, Unilever Vietnam spent the most on advertisements and promotion programmes ($19.5mil), while Abbot Laboratories Inc spent the least ($2mil, up by 12.5%). Dutch Lady made the sharpest cut in its advertisement budget with money spent down by 20.3% ($4.5mil). Meanwhile, Vinamilk, also a dairy producer, saw its budget increase most sharply, by 79.3% ($6.5mil). In May 2008, Vinamilk announced a $2mil campaign, with the money spent on using logos and images of Arsenal’s footballers to popularise the Moment coffee trademark. (TBKTSG)
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