While Vietnam's advertising market grew 7.6% in 2012, the country faces significant political and economic risks. Television advertising accounts for over 75% of the total advertising market and is expected to continue dominating. Key risks to economic growth include problems in the banking sector like high loan write-offs and slowing GDP growth. The advertising market is projected to grow robustly at 8.3% annually through 2017 despite these macroeconomic challenges.

1. 15
February 26, 2013
issue 121
VIETNAM
A profile of Vietnam’s advertising market
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¡ Despite slowing economic growth, net advertising expenditures in Vietnam grew 7.6% in 2012 to US$771 mil.
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¡ TV advertising is dominant and accounts for more than 75% of the total advertising pie. Print, out of home (OOH) and online are also significant.
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¡ Real macroeconomic risks exist. These include recapitalizing banks, restructuring state-owned enterprises (SOEs) and managing declining property values.
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¡ MPA projects advertising will grow robustly at an 8.3% CAGR from US$772 mil. in 2012 to US$1.15 bil. in 2017.
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¡ TV will continue to be the dominant segment accounting for slightly less than 80% of the market.
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¡ Key advertisers are foreign and domestic FMCG companies that advertise across all major media.
While Vietnam’s advertising market grew at a reasonable
pace in 2012, political and economic risks in the country are
significant. GDP growth came in at 5% for FY 2012 versus
the government target of 5.5%, and economic growth is
expected to slow in the March 2013 quarter as consumption
remains weak.
MPA believes that the projected GDP growth rates forecast
by the IMF may mask downside macroeconomic risks, and
advertising growth is sensitive to slowing increases in GDP.
Specifically, we note that preliminary estimates for loan
write-offs and recapitalization in the banking sector range
from US$12-16 bil. and these figures could rise. Accordingly,
the cost of cleaning up the banking sector may exceed 10%
of GDP. These economic issues have political ramifications.
The Vietnamese Communist Party recently apologized for
several “mistakes”.
TV domination | Free-to-air (FTA) channels account for 89%
of TV advertising and pay TV captures the balance. There are
more than 100 FTA channels but the key channel operators
are: (1) VTV (national player, but particularly strong in the
Net Advertising 2008 2009 2010 2011 2012 2013 2014 2015 CAGR, 2012-2015
TV (US$ mil.) 343 401 468 499 544 586 636 695 761 9.1%
FTA (US$ mil.) 306 358 418 446 486 523 567 619 677 9.0%
%Y/Y (%) - 17.0% 16.8% 6.7% 9.0% 7.6% 8.4% 9.2% 9.4%
Pay-TV (US$ mil.) 37 43 50 53 58.0 63 69 75 84 10.1%
%Y/Y (%) - 16.2% 16.3% 5.6% 9.8% 8.1% 9.6% 9.8% 11.0%
%Y/Y (%) - 16.9% 16.7% 6.6% 9.1% 7.7% 8.5% 9.3% 9.6%
Newspaper (US$ mil.) 48 53 57 58 60 62 64 68 71 4.5%
%Y/Y (%) - 10.4% 7.5% 1.8% 2.7% 4.0% 3.8% 5.1% 4.7%
Magazine (US$ mil.) 31 35 38 39 40 42 44 46 48 4.7%
%Y/Y (%) - 23.4% 18.8% 1.8% 3.5% 4.3% 4.3% 5.0% 4.8%
Online (US$ mil.) 3.0 6.1 10 15 20 26 32 38 45 20.6%
%Y/Y (%) - 26.1% 85.3% 44.2% 33.3% 28.0% 24.0% 21.0% 17.0%
OOH (US$ mil.) 36 39 42 43 46 49 52 57 62 8.5%
%Y/Y (%) - 6.1% 3.7% 3.3% 5.6% 6.5% 7.0% 9.0% 9.5%
Radio (US$ mil.) 5 6 6 7 7 7 8 8 9 5.9%
%Y/Y (%) - 30.9% 8.3% 12.0% 14.4% 18.6% 14.2% 12.5% 11.1%
Total (US$ mil.) 468 540 622 661 717 771 835 912 996 8.9%
%Y/Y (%) - 15.4% 15.2% 6.3% 8.5% 7.6% 8.3% 9.1% 9.2%
Note: Economic forecasts from the IMF.
Source: Media Partners Asia
At A Glance: A Breakdown Of Vietnam’s Ad Market
north), (2) HTV (primarily in Ho Chi Minh City and the south),
(3) Vinh Long TV (Can Tho and Ho Chi Minh City) and (4)
Danang TV (in Danang). Each of these operators is profitable.
Pay channels are also important, particularly in highly cabled
Ho Chi Minh City (HCMC) and Hanoi. Cable operator SCTV
has three of the top ten channels in HCMC.
Vietnamese viewers watch an average of 229 minutes of TV a
day with peak viewing generally occurring from noon to 1 pm
and from 6-10 pm. Key genres include news, drama (Korean,
Chinese, Taiwanese and domestic), movies, sports, comedies
and game shows. Regional differences exist, with news and
game shows rating better in the north while movies are more
Highlights

2. 16
THE AUTHORITY ON ASIA’S MEDIA INDUSTRIES
popular in the south. Localization is increasingly a focus and
domestically produced versions of The Voice, Dancing with
the Stars, MasterChef and Idol are aired.
Key Advertisers | Similar to other developing economies,
FMCG companies dominate the top 20 advertisers. After
discounts, Unilever and P&G are estimated to account for ~20%
of ad spend. P&G’s Downy, Pantene and Head & Shoulders as
well as Unilever’s Comfort are among the four most-advertised
brands. Generally, advertisers use all major media including TV,
print, on-line and OOH. Over the next several years, the list of
major advertisers is expected to be relatively stable. However,
the restructuring of SOEs and recapitalizing of banks could
impact some domestically owned advertisers.
Advertisers are aware of Vietnam’s economic issues and are
monitoring their budgets closely. Squeezing greater efficiency
from advertising budgets is a recurring theme. Going forward,
advertisers are expected to focus increasingly on the rural
market, which has approximately 74% of the population but
only 27% of retail sales. MPA believes that major terrestrial
operators will continue to be the main beneficiaries of the
growing rural target market, as local and provincial operators
will be disadvantaged with content acquisitions.
Source: TNS
TV Channel Shares in 2012
0 5 10 15 20 25 30 35 40 45
Star Movies (Cab Sat)
SCTV17 (SCTV (Star) Cab Sat)
HN2 (Ha Tay)
HBO (Cab Sat)
VCTV2 - Phim Viet (Cab sat)
VTV2 (National)
HN1 (HN6)
VTV1 (National)
VTV3 (National)
Hanoi
0 1 2 3 4 5 6 7 8
SCTV17 (SCTV)
VTV9
VTV3 (National)
SCTV9 (Cab Sat)
SCTV14 (Cab Sat)
HTV3 (HCMC)
HTV9 (HCMC)
VTV
HTV7 (HCMC)
VL1 (VL31)
Ho Chi Minh
0 5 10 15 20 25 30
VTV2 (National)
HTV3 (HCMC)
HBO (Cab Sat)
HTV7 (HCMC)
VL1 (VL31)
VTC7 (TodayTV
VTV1 (National)
DRT (Da Nang)
VTV3 (National)
DVTV (Da Nang)
Danang
0 5 10 15 20 25 30 35 40 45 50
HBO (Cab Sat)
DTTV (Dong Thap)
HGTV (Hau Giang)
HTV7 (HCMC)
VTV1 (National)
VL2 (VL8)
VTV3 (National)
CT43 (Can Tho)
CVTV1 (VTV1 Can Tho)
VL1 (VL31)
Cantho
(Continued)