Vietnamese advertising companies needed to be more professional

with an improved attitude to customer services so they could

compete with international firms
Viet Nam's advertising industry is losing out in the domestic market
due to the presence of these international giants.
While foreign companies usually draw up advertising strategies for
customers and earn 10-15 per cent of contract value, domestic
companies play the roles of outsourcers or advertising service
providers.
Moreover, when an international advertising company enters the
Vietnamese market, it usually brings heavyweight clients with it who
already operate here.
while foreign companies were successful because of their strategic
thinking, domestic firms just thought about " following the right
direction", or in other words, they worked for bigger companies.
Dung said that domestic advertising companies were unaware of the
need to improve and create their own value to make clients come to
them.
In future, advertisers needed to put the task of gaining consumers'
trust in front of everything else, including market share.
He added that until now, most companies just concentrated on
satisfying clients' requirements, and instead of working together,
domestic advertisers competed closely with each other.
The competition has become tougher over the last few years after
the economic crisis forced many enterprises to cut advertising
budgets.
According to the Viet Nam Advertising Association, domestic
advertising revenue had increased on an average of 40 per cent
each year, but growth was becoming slower and slower.

Last year, the revenue reached nearly US$1 billion, just one sixth or
one seventh compared to neighbouring countries like Indonesia and
Thailand.
President of the association Dinh Quang Ngu said that
communication forms were constantly changing and modernising
with integrated advanced technologies.
Vice chairman of the Viet Nam IB Communications Group Phan Le
Khoi said that advertising should be part of an enterprise's
marketing strategy, and in tough economic times, they should find
alternative, cheaper means without losing effectiveness, such as
social networks or TVC [Televicentro] Online. VNS
The internet, mobile, social media gaming and a new wave of consumers are
changing the foundations of businesses. In Vietnam, digital advertising is
forecast to double in the next three years. The Saigon Times Daily reports.
Experts believe the trend of using digital advertising including online and
mobile advertising will pick up in the near future.
However, he noted that it was not easy to make advertising on social
networks and digital advertising effective, adding most local enterprises have
made inconsiderable investments in digital advertising, which accounts for
less than 5 percent of the total budget for marketing.
Vietnam is believed to be the lucrative market for the ad industry, where the
worlds six leading ad groups have been present, including WPP, Ominicom,
Dentsu, Publicis, Internpublic and Havas.
Foreign ad firms are the guests in Vietnam, but hosting the ad market thanks
to their great advantages including the technology, experiences and financial
capability. Especially, they have big clients, the multi-national groups which
are willing to allocate big budgets for advertisement campaigns.
However, while the majority of Vietnamese ad firms are trying to glean like
silver coins by working as sub-contractors for foreigners, some others try to
get bigger pieces of the ad cake by providing comprehensive integrated ad
solutions, which remain inaccessible even by some foreign groups in Vietnam.
In general, international ad agents have very high creativity in implementing
services, which is obviously superior to Vietnamese, who lack knowledge and
experience.

However, the limited knowledge about local culture, labor force and language
barriers of foreign agents all make it impossible to develop the ideas suitable
to Vietnamese consumers.
Vietnam can also be dominant in some other sectors such as PR, Digital
Marketing, and Local Integrated Marketing.
80% market share is in the hands of more than 20 advertising companies
abroad. Statistics Advertising Association, which launched this morning in
the person not surprised that begs the question: How do to remove
difficulties and to help domestic enterprises 1000 stayed in their home
market.
According to experts, advertising industry formed from Vietnam 10 years,
when the U.S. began to abolish sanctions. Meanwhile, the advertising
companies with foreign corporations to produce goods as large as
Unilever, CocaCola, Pepsi, and blowing a stream of air into this young
industry. Companies advertising Vietnam then only processing the
programs as planned production and television broadcast. Gradually,
through learning experiences from colleagues abroad, and advertising
companies in the country grew and began to receive the contract package
(full service). From the seat only a few dozen business, now has over
1,000
companies
in
Vietnam
market
participants.
"The advertising companies, Vietnam is rapidly accumulating experience
of foreign colleagues and apply the concept of advertising on the Vietnam
market," Vice President European Chamber of Commerce in Vietnam
(Eurocham ) Christian De Ruty get to. According to him, the biggest
advantage of the advertising industry as private companies in Vietnam on
an understanding the importance and power of advertising for the survival
of the product.

However, the fact that more than $ 1 billion in revenue from advertising
each year in Vietnam, the domestic companies contribute only 10-20%.
Than 80% of the remaining few large corporations advertising in the
world. "In the domestic market, if only array processing, make the final
stages of the process of advertising the businesses in the country
accounting for 90%. But if you count the largest advertising contract, the
package of foreign enterprises accounted for 90%, "Director of JSC
solutions market Royal, Hoang Hai Au acknowledged.
The main reasons, according to Europe, is due to international groups
have not believed in the level of professional advertising company in
Vietnam, so they only hire foreign companies. Very few enterprises
Vietnam receives advertising contracts for corporations like that, and if

there is only a sub-contract (sub-contract) a collection of foreign partners.

"Meanwhile, customers are mainly manufacturing enterprises in Vietnam,
they believe in the quality of the ads, but not enough money to cover all
costs," he said.
Like his European, many in the industry are acknowledged, the
professional qualifications of the enterprises in the country are advertising
is a limit not less. In Vietnam school does not have regular training in this
specialized. Companies themselves who are receiving training from the
beginning to be very slow to develop human resources. As well as
restrictions on professional, many units received only dare to do in part,
and nature of outsourcing more. "A lot of companies called the ads
themselves but essentially they are only processing the ad. Critical period
before the study and construction, composed the logo of the brand is not
some participants. Bring products to communication activities much
simpler, "director of a company advertising reviews.
Awareness of enterprises producing goods and services have not caught
up with the growth of advertising is also a limitation. Goldsun company
representative, Mr. Vo Van Quang, said that with the fact that the
advertising market Vietnam today, when many buyers will not know what
to buy. "Sometimes you put a company to issue planning brand strategy
they do not understand and thought the story should do advertising
companies to build household. If the international advertising companies
working on contract basis and enjoy an exclusive fee is about 17.65% in
Vietnam, customers do not understand the story, they still purchase by
each service specific programs such as a PR, a piece of film ... "he said.
Corporate income tax also is becoming a pressing matter of the
companies advertising. "The tax applies to businesses in this area is very
high (28%), it is maintained from 1990 of the last century, when the ad
business is highly profitable. Feedback, the new international corporations
in Vietnam, they pay for ads in the expenditure made in their country, a
large ocean plates they can to 40000-100000 USD. Meanwhile, land rent,
rent advertising space only a few million per year, "said Hoang Hai Au
confided to VnExpress. According to him, the moment, a large ocean plate
is very good so just signed a two-tens of thousands of dollars that rent
land accounts for nearly all. So that tax policy remains unchanged. "High
tax, competitive, less profitable to reinvest less than. Want to encourage
development of an advertising industry is critical to good training, policies
right, "he said.
In the macro, Secretary General Association of Vietnam Tran ad Year, said
that the advertising industry is always control policy, although there were
ordinances and decrees guiding the private enterprises in branches were
always making difficulties by particular regulations for each locality. If Ho
Chi Minh City has regulations prohibit outdoor advertising in Da Nang, the
Left does not distinguish on the fee rates under water. "Also in Hanoi, the
procedures to permit advertisers sometimes difficult process. Therefore,
the new story advertisers to survive by building sea without permission.
We only hope the local laws only as right, "he confided to VnExpress.

KeyadvertisersareforeignanddomesticFMCGcompaniesthatadvertiseacrossall
majormedia.
Realmacroeconomicrisksexist.Theseincluderecapitalizingbanks,restructuring
stateownedenterprises(SOEs)andmanagingdecliningpropertyvalues.
TVadvertisingisdominantandaccountsformorethan75%ofthetotaladvertising
pie.Print,outofhome(OOH)andonlinearealsosignificant.
PR in Vietnam is trying to find its way to professionalisation while facing
challenges such as limited understanding of what PR practice and its benefits
are, a shortage of trained personnel and the absence of legal and
professional frameworks.

While there are no official figures available about the number of

communication agencies in Vietnam, anecdotal evidence suggests the figure
has exploded to 7000.
contended PR in Vietnam borrows from the West but is practiced in the
Vietnamese style
arguing understanding the local knowledge and establishing personal
connections . . . are two of the key principles for doing PR in the Vietnamese
way
a heavy focus on media relations and event management, that personal
relationships were significant while an envelope culture in which PR
practitioners pay journalists to attend their press conferences and publish their
press releases was widely entrenched
a lack of professionalism, honesty and a legal framework as industry
limitations, calling for more professional training and education, a code of
conduct and professional body, and a proper legal framework in Vietnam as
solutions to building professional PR.
The two empirical studies about PR in Vietnam appeared to adopt Western,
normative concepts without seriously taking into account environmental
factors specific to Vietnam
The agency PR practitioners spend a large amount of their time with clients
and in Vietnam, relationships are developed not just for work but also for
friendship, further fuelling demand for interpersonal skills.
The respondents generally believe the bulk of their clients do not have
expertise in PR and there is a need to spend time educating them about PR
and the media landscape.

How- ever, due to their large workloads, and immediate deadlines from
clients, some respondents lament it is difficult to invest a lot of time and
research into one proposal.
Respondents say while clients know PR is important, many do not fully
understand what it is. Some of the respondents say clients are unwilling to
share business objectives, resulting in disconnection between campaigns and
client goals, and that this restricts PR to short-term efforts rather than longterm relationships. According to the respondents, as little as 10% of clients
are willing to share their business objectives and forge long-term partnerships.
Due to the recent proliferation of agencies, PR practitioners state competition
among them is fierce, and this trend harms the industry in the long-term.
Respondents say clients holding agencies in low regard also leads to other
problems such as clients fielding ideas from agencies and implementing these
ideas themselves.
There seems to be a lack of consensus among the respondents regarding
what constitutes ethics in PR in Vietnam.
cultural influence on perceptions of practice.