Thursday, February 19, 2009

What's Wrong With The Vietnamese Advertising Association? - How Not To Market in Asia II

Advertising, Brand Provocateur, Crazy Deranged Fool, Gapingvoid, Golden Bell Vietnam, JWT, Marketing, O and M, Transparancy, Vietnam Advertising Association, WPPA scan of articles on the state of the Vietnamese Advertising Market over the last few months reveals one thing: Somebody can't get the numbers right. And that somebody is the industry's guiding body, the Vietnam Advertising Association.

For instance - How many advertising firms are there in Vietnam?

This article says 3000. And the next one says 3000 as well. But this one says 6000. And yet another says 7000. So how many firms is it really and what is considered an "advertising firm"?

And, how large is the market?

One story says $500 million. The next story says $1 Billion. Another only $31 million (are US bankers doing the counting around here?) And finally, a projection for the market in 2020 reaches a lofty $3 billion. But who really knows? Not the Vietnam Advertising Association, that's for sure, because all the numbers you see quoted above have been attributed to them according to the various publications.

But the one thing the VAA seems to hold a rock-hard consistency on is it's dislike for foreign companies in the business. Just take a look at the headlines below and you tell me if this supposed Trade Association is really representing the industry or just Vietnamese owned companies in the industry? It's embarrassing. For a nation that prides itself on greater and greater FDI (Foreign Direct Investment) numbers, year after year, the VAA has succeeded, in just a few short months and stories, in becoming the poster child for How Not to Market in Asia. Want to scare foreign companies away from investing in Vietnam? The VAA can help.

Imagine if the Banking Association started going after foreign banks - or the Construction Association started complaining about all the foreign money coming in, in the form of real estate development from - oh dear - other countries!

80% of industry profit falls into foreign hands - said Tran Quy Cap, Chairman of HCM City Advertisement Firms’ Association.

VietNamNet - A report on the 3-year implementation of the Advertisement Ordinance released recently by the Ministry of Culture and Information said that despite limitations on foreign ownership in the field of advertising, he number of domestic firms that have a foothold in the market remains modest, while the majority focus on organising events or printing. More than 3,000 advertisement firms are licensed to operate in Vietnam; however, 80% of profit falls into the hands of foreign companies.

Advertising: Profits Go To Foreign Pockets

VietNamNet – Vietnam has over 3,000 advertising companies but their turnover is still modest. Tran Nguyet Dan, Deputy Chairman cum Secretary General of the Vietnam Advertising Association (VAA) comments on this issue.

There are nearly 6,000 advertising firms in Vietnam.(according to VAA) “Of the more than US$1 billion of annual revenues from advertising activities in Vietnam, local firms account for 10-20%. Over 80% belong to several big foreign advertising groups,” said Do Kim Dung, Vice Chairman of the HCM City Association of Advertising, General Director of the An Tiem Advertising Company.

Foreign advertising companies now dominate up to 70% of the advertising market in Vietnam

VietNamNet - According to VAA, more than 7,000 advertising companies currently employ nearly 100,000 people, but many of them should take refresher and advanced courses to meet the professional requirements. Foreign advertising companies now dominate up to 70% of the advertising market in Vietnam. The industry’s revenue is projected to reach some US$3 billion by 2020, with local firms accounting for 50-60%.

VnBusinessNews - Total turnover for the Vietnamese advertising industry is currently around US$500 million. Presently, there are 7,000 companies licensed to do business as advertisers throughout Viet Nam.

Marketing-InteractiveNews - According to the Vietnam Advertising Association, Vietnam's ad and internet industry is expected to hit US$31 million by 2010 from US$10 million in 2007. There are currently 3000 companies in the advertising business.
Advertising, Brand Provocateur, Crazy Deranged Fool, Gapingvoid, Golden Bell Vietnam, JWT, Marketing, O and M, Transparancy, Vietnam Advertising Association, WPP
Shortsighted, unfair and wildly unprofessional. Have I refrained from calling them crazy deranged fools yet? Oh, but wait. It seems the VAA have some experience in this area already. Take a look at this story from 2002. Yes, you can actually buy this story from a news service for $9.95. It's almost as if they were taking lesson's from the music industry by trying to sue their customers.

Vietnam Advertising Association launched fresh argument against investment license to foreign ad firm J Walter Thompson.

464 word report - published Jul 29, 2002

And on the battle goes on. Pointlessly. They forget to mention that the companies involved employ Vietnamese people and put quite a bit more than Ban on the table for thousands. They neglect the fact that the agencies didn't ship a few thousand Europeans and Americans in for the work and that the handful of foreigners who are here, pay Vietnamese landlords, eat Vietnamese food and drive vehicles bought and possibly made in Vietnam. And that's not even counting the beer. Vietnamese beer. The association also misses the training and more than significant technology transfer made by these firms towards the betterment of the entire industry, and country, and they seem almost blindly oblivious to the fact that the WPP group is a 30% shareholder in Vietnam's largest advertising company, DatViet VAC (Vietnam Advertising Corporation), which is still government controlled and also has a relationship with DDB, an American agency.

So you must wonder - What do they do at the meetings? But rather than speculate about what unsavory buggery might go on, I'd like to focus on what they should be doing at their meetings.

1) They should revise their charter - Whatever the hell is in their current charter certainly isn't helpful to the business at large. They should aim to serve the entire industry with a real special emphasis on the word serve. Do they really think a foreign company wants to join a body that spends a great deal of its time fighting them? They should be Brand Provocateurs for every advertiser and agency be they local, foreign or Martian.

2) They should aim to recruit the top agencies as members - Since the VAA doesn't have a website it's impossible to understand who is a member and who is not, but the last information I saw, at the Vietnam Advertising Festival, listed Dentsu as the only foreign agency. With O&M and JWT as big winners at the show and WPP affiliates, it shouldn't be much of a push to get them in as members, so long as nobody pulls their chairs out from under them at the big table. Also, oddly missing are the big local agencies, DatViet VAC and Golden Group. Somebody should be all over that.

3) They should stay on message - One look at the selection of news stories above and the plethora of people delivering the message is enough to understand why the numbers are always messed up. Figure out what the numbers are, and stay on message. They'll stand a much better chance of getting complicated regulations through a fairly dim body of lawmakers if the bureaucrats aren't totally perplexed by the numbers.

4) They should publish the numbers - I was contacted by a journalist lately from Media Magazine in HK because my blog was the most frequent result to a Google search for VAA. That's pretty sad. The journalist had commented that Thailand had a good site set up with facts and figures that advertisers, agencies and media companies could use as reference. Vietnam could use that and it should be the charge of VAA make that information transparent and accessible.

5) They should get a new logo - It's on the poster behind the people at the table.

This post isn't something that I sat up nights thinking about - rather it came after months of collecting stories and then realizing that the organization set up to bring some order and respect to the business was engaged in a concentrated effort to keep it divided - and I couldn't figure out, to what end? To be as fair as possible, it does seem that the multi-nationals won the lion's share of awards at the Golden Bells this year, indicating that the judging had a fairness that might not have been expected, considering the VAA's recent media output. Maybe that's a start.

To learn more about Brand Marketing Training in Vietnam, go here.

For more in the "How Not To Market In Asia" series, click below:

I) The Importance of Time, Money, Quality and Knowing How Much of Each You Need to Succeed

III) Detri-viral Marketing: When Web 2.0 works against your brand


  1. Thank you for your information. Looking forward the next article about advertising in vietnam, especially in the online advertising

  2. I enjoyed reading your overview of the situation.

    I'm a rookie to the Vietnam market but I believe this is not the only area where you can run into issues of transparency and conflict of interests.

    Thanks for the information! I really love how you back up your claims with proper sources and references.

  3. Thanks guys. The story was picked up by Bryan Pelz at Vinagame and featured on his Tumbler page as a "rant". Hey, rants just bitch! I do try to back-up with reference and sources. Thanks too, Bryan!

  4. What I find at fault is that the articles were written different years, so surely the number of agencies and revenue can surely change.

  5. Understood Anon, but I chose all the articles from my last 6 months feed of news articles on the story. So that means that the reporting agencies are still sending this out. My oldest reference is the JWT story. But that's just for background and historical reference.


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