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Vietnam Online Advertising Industry: A quick overview
 

Vietnam Online Advertising Industry: A quick overview

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Presented by Bryan Pelz - Founder and CEO of Vinagame at BarCamp Saigon.

Presented by Bryan Pelz - Founder and CEO of Vinagame at BarCamp Saigon.

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Vietnam Online Advertising Industry: A quick overview Vietnam Online Advertising Industry: A quick overview Presentation Transcript

  • Vietnam
Online
 Adver/sing
Industry:
 A
Quick
Overview
 26‐Nov
2008
 Bryan
Pelz

  • Vietnam
Online
 Troubled
*mes

  • Vietnam:
Basic
Stats
 
Annual
data


 
2007(a)


 
Historical
averages
(%)


 
2003‐07

 
Population
(m)


 85.9
 
Population
growth


 1.3
 
GDP
(US$
bn;
market
exchange
rate)


 
70.7


 
Real
GDP
growth


 8.1
 
GDP
(US$
bn;
purchasing
power
parity)


 221.6
 
Real
domestic
demand
growth


 8.4
 
GDP
per
head
(US$;
market
exchange
rate)


 823
 
Inflation


 7.1
 
GDP
per
head
(US$;
purchasing
power
parity)


 2,579
 
Current‐account
balance
(%
of
GDP)


 ‐3.6
 
Exchange
rate
(av)
D:US$


 
16,179


 
FDI
inflows
(%
of
GDP)


 4.9
 2006
 2007
 2008c
 2009c
 Real
GDP
growth
 8.2
 8.5
 6.9
 7.7
 Industrial
production
growth
 17
 17.3
 15.9
 16.5
 Gross
agricultural
production
growth
 3.4
 3.4
 3.5
 3
 Consumer
price
inflation
(av)
 7.4
 8.3
 23.3
 12
 Consumer
price
inflation
(year‐end)
 6.6
 12.6
 21.9
 8.9
 Lending
rate
 11.2
 11.4
 20.8
 17.3
 Source: Economist Country Briefing Jun-2008
  • Recent
news
 •  AC
Nielsen:
Consumer
confidence
 •  Vietnam
Net:
October
2008
vs
 down
in
Vietnam
 October
2007
Consumer
Price
 Index
 HANOI,
Nov.
10
—
An
AC
Nielsen
 survey
has
shown
that
Vietnamese
 consumer
confidence
con/nued
to
 drop
in
the
second
half
of
this
year
 due
to
high
infla/on
and
slower
 economic
growth,
Vietnam
 Investment
Review
reported
on
 Monday.
In
the
first
10
months
this
 year,
Vietnam's
infla/on
rose
23.15
 percent
over
the
same
period
last
 year.
The
economy
rose
by
6.52
 percent
in
the
first
nine
months
year‐ on‐year,
lower
than
the
7.4
percent
 growth
for
the
first
quarter,
official
 sta/s/cs
showed.

 Source: AC Nielsen, VietnamNet
  • Tech
company
layoffs
announced
in
the
last
5
weeks
 Company


 Date


 How
many


 Company


 Date


 How
many


 Sun
Microsystems

 11/14/08
 6,000/15‐18%

 Xerox

 10/23/08
 3,000
 Applied
Materials

 11/12/08
 1,800/12%

 Avid
Technology

 10/23/08
 500
 Wired.com

 11/11/08
 3
of
28

 Nokia

 11/4/08
 600
 Six
Apart

 11/11/08
 8%
 Tektronix

 11/3/08
 150
 Tucows

 11/11/08
 15%
 Spot
Runner

 11/3/08
 115,
<
30%

 Circuit
City

 11/10/08
 20%
 Circuit
City

 11/3/08
 17%
 BitTorrent

 11/10/08
 50%
 THQ

 11/3/08
 4‐5
studios

 Insight

 11/10/08
 240,
4%

 Break.com

 10/23/08
 11
of
80

 Honeywell

 11/7/08
 700
 Eons

 10/23/08
 8
of
about
33

 Zappos

 11/6/08
 8%
 Dell

 10/22/08
 8,900
 LinkedIn

 11/5/08
 36,
10%

 SanDisk

 10/22/08
 TBA

 AMD

 11/5/08
 500,
3%

 ManiaTV

 10/22/08
 20
of
70

 Nokia

 11/4/08
 600
 iMeem

 10/22/08
 25%
of
80

 THQ

 11/3/08
 4‐5
studios

 HP

 10/22/08
 24,600
over
three
years

 Motorola

 10/30/08
 3,000
 Yahoo

 10/21/08
 10%
of
~14,300

 Electronic
Arts

 10/30/08
 600
 Sony
Ericsson

 10/17/08
 2,000
globally

 Xerox

 10/23/08
 3,000
 eBay

 10/6/08
 1,000
 Source: CNet
  • More
recent
doom
&
gloom
 •  VinaSME
Urges
a
Rescue
of
SMEs
 Vietnam
Net
–
Nov
14,
2008
 VinaSME
has
released
the
report
that
said
20%
of
SMEs
are
currently
on
the
verge
 of
bankruptcy.
These
enterprises
have
narrowed
or
stopped
produc/on,
while
the
 business
of
some
enterprises
has
come
to
a
stands/ll.
Vinasme’s
sta/s/cs
showed
 that
95%
of
200,000
businesses
that
pay
taxes
to
the
state
are
SMEs.
The
SMEs
 make
up
40%
of
GDP
and
put
out
30‐40%
of
export
and
consumer
products
for
the
 country.
Moreover,
SMEs
use
up
to
50%
of
the
total
laborers
used
by
enterprises
 throughout
the
country.
SMEs
contribute
17.6%
to
the
state
budget.
 Source: Vietnam Net
  • 2009:
What
we
might
see
 •  As
global
situa/on
worsens,
local
economy
will
face
more
challenges
 •  Infla/on
will
subside
 •  Housing
prices
will
con/nue
decline;
construc/on
will
stall
 •  Foreign
investment
will
contract
 •  Exports
will
slow
 •  Businesses
and
consumers
will
become
more
conserva/ve
 Bryan’s guesses. Your results may vary.
  • Time
to
get
innova/ve
 Source: VN Express
  • Vietnam
Online
 Huge
poten*al,
 despite
the
environment

  • South
 East

 Asia

  • Vietnam
Internet
Growth
 100%
 100,000,000
 90%
 90,000,000
 >Web
Content
 80%
 80,000,000
 >Mobile
 70%
 Internet
 70,000,000
 60%
 Online
Games
 60,000,000
 50%
 50,000,000
 Broadband
 40%
 40,000,000
 30%
 30,000,000
 20%
 20,000,000
 10%
 10,000,000
 0%
 ‐
 VinaGame projections Population
 Internet
Users
 Growth

  • Top
20
Internet
Countries
2007
 Japan
 USA
 Korea
 Internet
Penetra/on
 Vietnam
 China
 India
 GDP
/
Capita
 50M
  • Vietnam
&
developing
countries
 Vietnam
2009?
 Internet
Penetra/on
 Vietnam
2007
 Vietnam
2005
 China
2007
 India
2007
 GDP
/
Capita
 50M
  • Vietnam:
Home
Internet
access
is
growing
 Urban
Home
Internet
 Urban
v
Rural
–
2008
(%)
 Penetration
(%)
 40
 Surfed
Internet
in
 Past
Wk
 54
 35
 34
 30
 Mobile
Phone
 33
 Penetration
 84
 25
 21
 Rural
 20
 Home
Internet
 1
 Urban
 15
 Penetration
 37
 10
 8
 9
 Home
PC
 9
 5
 3
 Penetration
 51
 0
 1999
 2001
 2004
 2006
 2008
 0
 20
 40
 60
 80
100
 Source: TNS Consumer Trends 2008
  • Vietnam
Internet
Users
–
by
Age
 2006
 2014
 16m
 47m
 16
 16
 14
 14
 12
 12
 10
 10
 8
 8
 6
 6
 4
 4
 2
 2
 0
 0
 0‐4
 5‐9
 10‐14
 15‐17
 18‐19
 20‐24
 25‐29
 30‐34
 35‐39
 40‐44
 45‐49
 50‐54
 55‐59
 0‐4
 5‐9
 10‐14
 15‐17
 18‐19
 20‐24
 25‐29
 30‐34
 35‐39
 40‐44
 45‐49
 50‐54
 55‐59
 Internet
Users
 Popula/on
 Internet
Users
 Popula/on
 VinaGame projections
  • Vietnam
Online
 The
good,
the
bad,
and
the
ugly

  • Online
ad
growth
in
US
grinding
to
a
halt
(US$M)
 $9,000
 14.0%
 $8,000
 12.0%
 $7,000
 10.0%
 $6,000
 8.0%
 AOL
 $5,000
 Microsoft
 Yahoo
 $4,000
 6.0%
 Google
 $3,000
 Growth
(%)
 4.0%
 $2,000
 2.0%
 $1,000
 1%
 $0
 0.0%
 Q3‐2007
 Q4‐2007
 Q1‐2008
 Q2‐2008
 Q3‐2008
 Source: TechCrunch
  • Vietnam
Online
Adver/sing
Market
($M)
 10%
 80
 •  We
had
expect
the
online
 9%
 70
 ad
market
to
reach
$75m
by
 8%
 7%
 60
 2014
 6%
 50
 •  We
had
expected
online
 5%
 40
 would
exceed
9%
of
total
 4%
 30
 ATL
adver/sing
(on+off)
 3%
 20
 2%
 1%
 10
 •  PROBLEM:
adver/sing
will
 0%
 0
 ramp
at
a
slower
rate
due
to
 2007E
 2010E
 2012E
 2014E
 2008E
 2009E
 2011E
 2013E
 troubled
economy
 Online
Advertising
 Internet
Users
 %
of
ATL
Advertising
 VinaGame projections
  • Evolu/on
of
VN
Ad
Market:
2009
vs
2014
 80
 •  We
had
expected
increase
 70
 in
paid
search
 –  Paid
search
would
reach
> 60
 $35m
 50
 –  Paid
search
would
reach
 0.036%
of
GDP
in
2014,
 40
 eventually
exceeding
0.10%
in
 30
 long‐term
 20
 •  PROBLEM:
adver/sing
will
 10
 ramp
at
a
slower
rate
than
 0
 an/cipated
 2009E
 2014E
 Display
 Paid
Search
 VinaGame projections
  • Some
bright
news
from
China
 •  CCTV
prime
/me
auc/on
 –  strong
ad
spending
by
domes/c
Chinese
firms,
up
15%
YoY
 •  Online
ad
spending
may
s/ll
grow,
es/mates
are
~20%
 –  Online
media
demographics
are
complementary
to
TV’s,
as
most
youth
 spend
more
/me
on
online
media
than
TV
 –  Online
media
rate
card
will
be
raised
auer
the
raising
of
CCTVs
rate
 cards
 –  Due
to
economic
slowdown,
people
will
spend
more
/me
at
home
 and,
thus,
both
Internet
and
TV
will
benefit.
 •  THE
PROBLEM
IS:
China
is
a
more
mature
market
than
VN
 –  Twice
the
GDP/Capita
 –  Large
base
of
SMEs
adver/sing
already

  • Vietnam
Online
 It’s
up
to
us
to
make
a
difference

  • The
market
situa/on
here
 •  More
people
spend
*me
online
in
a
troubled
 economy
 –  Cost‐effec/ve
form
of
diversion
 •  Online
becomes
more
important
to
young
 people
 –  This
country
is
full
of
early
adopters
 –  Using
the
Internet
in
increasingly
diverse
ways

  • Business
environment
 •  In
hard
*mes,
spending
should
shiH
from
 retro
media
to
online
;‐)
 –  The
ROI
for
online
is
quan/fiable
 –  Retro
media
is
only
indirectly
quan/fiable
 •  No
shiH
in
VN
(yet).
Why?
 –  Companies
don’t
pay
enough
aven/on
to
the
 numbers
 –  Our
ecosystem
is
incomplete
(does
anyone
verify
 our
numbers?)
 –  No
serious
effort
to
evangelize
SMEs

  • What
we
should
do
 •  Shiu
spending
to
online
 •  Educate
the
market
 •  Cooperate
to
develop
the
ecosystem
 •  Invest
in
evangelizing
SMEs

  • Q&A
 Contact info: email: bryan@vinagame.com.vn skype/twitter/yahoo/gtalk/yahoo/tumblr: bryanpelz