Cross-Border and Digital Advertising in Vietnam: An Overview
The digital age has made cross-border advertising much easier to do. In Vietnam, however, there are a number of rules and regulations governing digital advertising. Here’s what digital marketers need to know before engaging in digital or cross-border advertising in Vietnam.
Vietnam is developing extremely fast and so is its technological development. As a result, digital advertising has become pivotal to Vietnam’s business practices. With the help of digital ads, Vietnamese goods and services have become globalized and can now reach foreign customers with relative ease.
The domestic market in Vietnam is also getting bigger by the day. More and more international investors are turning their attention to Vietnam as they see the local consumer market’s growing potential.
However, Vietnam is a country with strict information control, and investors should understand these risks before engaging in digital advertising.
In this article, we will discuss Vietnam’s digital advertising industry, alongside the rules and regulations foreign advertisers need to know to avoid legal violations.
Digital advertising in Vietnam in numbers
The total population of Vietnam reached 98.17 million in 2022, 73 percent of which are online according to Kepios’ Digital 2022: Global Overview Report.
The Kepios Report states that Vietnamese people spend an average of six hours and 38 minutes a day on the internet each day, of which two hours and 28 minutes are spent on social media.
Further, the data shows that digital advertising spend in Vietnam crossed US$1.04 billion in 2022 and is projected to reach US$1.18 billion in 2023.
Notably, digital advertising received a big boost during the COVID-19 pandemic. According to Statista’s Digital Advertising in Vietnam report, the annual growth rate for digital advertising in 2019, 2020, and 2021 was 5.5 percent, 5 percent, and 4 percent, respectively.
Currently, Vietnam is ranked fourth in Southeast Asia in terms of digital advertising expenditure.
Key digital advertising regulations in Vietnam
There are a myriad of opportunities for firms in the digital advertising field in Vietnam. There are, however, a number of restrictions and regulations in place that firms should be aware of.
The core of these regulations is outlined in Decree No. 181/2013/ND-CP (“Decree 181”) issued in 2013. It has undergone a number of amendments. Most notably, in July of 2021, the Government issued Decree No. 70/2021/ND-CP (“Decree 70”)
In line with previous drafts, Decree 70 updated several articles in Decree 181. These were articles 13, 14, and 15 regulating cross-border advertising. Aside from a number of logistical updates, there were four key changes that foreign firms engaged in digital and cross-border advertising should be aware of.
Notifying the Ministry of Information and Communications (MIC)
When foreign organizations and individuals engage in cross-border advertising, the business needs to provide the MIC with:
- The organization’s name, transaction name, head office address;
- The location of its local server; and
- The name of a representative organization or individual in Vietnam, as well as their email address and contact number.
Notification must be done within 15 days before commencing business. The form of notification can be in person, via post, or online.
Compliance with requests issued by the MIC and other regulatory authorities
Decree 70 provides a clearer process of preventing and removing infringing advertising content. At the same time, it also outlines sanctions for non-compliance.
Specifically, after receiving a request from the MIC about a violation, foreign organizations and individuals performing cross-border advertising must remove infringing advertisements within 24 hours.
Information about violations will also be publicized on the MIC’s website.
Placement of advertisements
Decree 70 also states that publishers and advertisers when entering into contracts with advertising service providers (including domestic and foreign organizations and individuals) have the rights to:
- Request advertising service providers to place advertisements on content that does not violate the law specified in Clause 1, Article 8 of the Cybersecurity Law, and Article 28 of the Intellectual Property Law;
- Request advertising service providers to have tools that allow advertisers in Vietnam to control and remove advertisements that violate Vietnamese law.
Local partners no longer required
Decree 181 obliged foreign businesses to cross-border advertise through service providers in Vietnam.
Decree 70 removes this obligation. From September 15, 2021, advertisers can directly sign advertising contracts with foreign platforms like Google, Facebook, and Youtube.
Blocking digital ads on ‘toxic’ content
Recently, the MIC has put a lot of effort into preventing and removing ‘malicious’ content on social networking platforms. However, the process of removing this kind of information is still slow compared to the speed of its spread.
To address this problem, a blacklist of websites–-including various user accounts on Youtube and Facebook–-is being drafted. Sites on the list will be barred from receiving advertising revenue if they have posted ‘toxic’ content.
Companies are also obliged not to place ads on ‘toxic’ content, which is broadly defined as “confusing right and wrong, true and false, or having part of the truth but being reported with malicious intent,” according to the People’s Security University.
The MIC has said it will unveil a whitelist of sites that are safe for ads in early 2023.
Enforcing Vietnam’s digital advertising regulations
Several major companies, including Meta, Amazon, LinkedIn AdColony, and others have violated cross-border advertising regulations. Despite being market leaders, these platforms have not been able to avoid a backlash regarding digital ads.
The MIC has said that it has fined 15 organizations and individuals for administrative violations to the tune of VND 210 million (US$8,888).
But the problem persists, according to Mr. Le Quang Tu Do, the Director of the Department of Radio, Television and Electronic Information at the MIC
“Youtube and Facebook allow users to spread infringing information and enable monetization features that allow ads to be installed on those channels, pages, and accounts,” he told a conference last year, according to VTC News.
As a result, greater deterrents and closer monitoring may be on the cards moving forward.
Key players in Vietnam’s digital ads market
Google, Youtube, and Facebook are the most visited platforms in Vietnam. According to Mr. Do Huu Hung, CEO of Accesstrade, these companies take about 80 to 90 percent of digital ad spends in Vietnam.
Social networking is also an effective tool favored by Vietnamese businesses. According to a survey by Kepios, the three most used social networking platforms in Vietnam today include Facebook, Zalo, and Facebook Messenger.
Facebook dominates the digital media market in Vietnam. Data from Kepios shows that only 5 percent of companies surveyed do not use or have not used Facebook as a digital communications channel. In particular, many firms spend more than 50 percent of their digital spending on Facebook alone, even though alternative channels might be more effective.
According to data from Kepios, each Vietnamese person spends an average of more than 1-hour watching videos on Youtube every day.
In Vietnam, reality TV shows, lifestyle, and product reviews are the most popular.
Using key opinion leaders (KOLs) to promote products is also popular in Vietnam. Businesses can reach up to 63.4 percent of internet users in Vietnam by using KOLs along with other forms of digital advertising available on Youtube.
Zalo was first introduced in 2012 and quickly became a very popular communication tool in Vietnam. It now penetrates 91.3 percent of social network users. Zalo offers basic chat features, entertainment, news, and other services – such as paying electricity bills and booking appointments. The network has over 62 million monthly active users between the ages of 18 and 34.
By allowing brands to set up official accounts, Zalo has created a digital ecosystem that favors e-commerce, local community building, and timelier customer service. Several multinational companies have set up their official Zalo accounts to access the Vietnamese market and connect with local customers.
The future of digital advertising in Vietnam
Digital advertising is an emerging trend in Vietnam. A huge amount of marketing expenditure goes to the sector with spending on digital ads reaching 1044 billion VND (US$44 million) in 2022.
But there are challenges when it comes to operating in the digital advertising space in Vietnam. Many large companies have faced regulatory problems here. In this light, it is advisable that investors who intend to enter the Vietnamese market should be aware of the Advertising Law and its requirements as well as supplementary legislation to ensure their digital and cross-border advertising activities can run as smoothly as possible.
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