Advertising deals surge despite downturn

Wednesday, Aug 20, 2014 08:33

"Multinational and local corporations spell out their strategies and ask the advertising agency for ideas to implement the strategies."said Robert Tran — File Photo

HCM CITY (Biz Hub) — The advertising market has bucked the economic trend, remaining strong, with both Vietnamese and foreign advertising agencies seeing a consistent increase in the number of huge deals with large corporations.

In the first half of this year Viet Nam Dairy Products Joint Stock Company (Vinamilk) has spent VND462 billion (US$21 million) on advertising, or a full fourth of its marketing expenditure.

Its spending on advertising and sales in the first half of this year was more than in the whole of 2011, but its turnover is down to 78 per cent of that of the first half of 2011.

Amid the economic downturn, Vinamilk is not the only giant company to spend more on advertisement and marketing than in the past.

But international advertising agencies get the lion's share of the large accounts — Vinamilk hires US agency TBWA; Japanese-owned Densu Viet Nam counts all Japanese corporations like Toyota, Yamaha, Ajinomoto, Canon, Aeon Mall as its clients; American firm Lowe has the Coca-Cola, OMO, and Masan Consumer accounts.

"We often choose Japanese advertising companies for long-term campaigns," Vo Thanh Tai, marketing director of Vinastar Motors, told Tuoi Tre (Youth) newspaper.

"We consider local companies, but they should prove their capabilities first. For smaller activities like events, customer meets, we have chosen local companies like Vietart and Reach Square."

Robert Tran, director of Canada-owned Robenny Strategic Consultancy Corporation, said: "Multinational and local corporations spell out their strategies and ask the advertising agency for ideas to implement the strategies.

"Few Vietnamese advertising agencies can provide consultancy like that. This is why they often lose."

Do Kim Dung, deputy chairman of the Viet Nam Advertising Association, said: "Thanks to their global presence, multinational advertising agencies win most of the big contracts and there is no chance for local companies.

"Vietnamese corporations too like to use foreign agencies for their long-term campaigns."

He said local companies' financial ability was too limited to compete with their foreign rivals.

"Most foreign advertising companies in Viet Nam are very big with tens of thousands of staff and turnover of $6 - 10 billion. They have also worked with global companies for tens of years.

But he pointed out one area where local agencies are competitive: "They have an advantage in outdoor advertising, PR, and event management because these need a lot of bodies and a deep understanding of the local situation."

As a result they account for almost 100 per cent of the three markets.

Companies like Coca-Cola, Adidas, Nike and Vinamilk have started earmarking a part of their advertising budget for online marketing, and this is another area where local companies have a chance of competing.

"Advertising through Google, key words, or Facebook needs continuous updates to interact with customers and this is an advantage for small companies like ours," Le Xuan Hue, director of HCM City-based SEM Viet Nam Advertisement Company, said. — VNS

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