Online ads earn big amid COVID-19 pandemic
Online advertising, as the first choice of firms and brands amid the pandemic, is thriving in Vietnam and could reach the milestone of US$1 billion in revenue this year.
According to the Vietnam Digital Marketing Trends 2021 report by Novaon, Vietnam’s online ad market will continue growing during the 2020-2025 period, with a compound annual growth rate of 21.5%. Despite the pandemic last year, online ad revenue still reached US$820 million, which is forecast to rise to US$955.7 million this year.
Chairman of the Clever Group Nguyen Khanh Trinh expressed his optimism about the annual growth of 10-20% in the sector.
Last year, Vietnam’s digital economy was worth US$14 billion, which is forecast to reach US$52 billion by 2025. In particular, e-commerce expanded by 46% as Vietnamese spend 3.5 – 4.2 hours per day on the internet, which gives an edge for the online advertising sector to earn US$1 billion this year.
However, the sector also faces unfair competition with cross-border platforms like Facebook and Google accounting for over 80% of online ads revenue in Vietnam.
At present, Facebook, Google Ads, YouTube and channels of key opinion leaders are the first choices of domestic firms for online ads, which spent an average 17% of their revenue on digital marketing in 2020.
Statistics showed that only about 5% of firms do not or have yet to use Facebook for their marketing campaigns. Many others spent more than 50% of their online ads budget on Facebook instead of other channels.
Nguyen Dang Ngoc, Deputy Director of the VCCorp, said customers prefer using ad services by cross-border platforms because they do not have to fulfill taxation and fee obligations.
The Decree No.38//2021/ND-CP regulating administrative fines in culture and ads, which took effect on June 1, 2021, is expected to fill gaps to promote fair competition in the field, making it easier for domestic firms to win market share from foreign giants.