Vietnam has become an increasingly attractive market for businesses looking to expand their reach in Southeast Asia. As a result, advertising in Vietnam has seen a significant shift towards cross-border and digital contexts, enabling businesses to connect with Vietnamese consumers through various online channels. This shift has increased the complexity of advertising regulations and practices, making it crucial for businesses to have a comprehensive understanding of the Vietnamese advertising landscape. In this article, we provide an overview of advertising in cross-border and digital contexts in Vietnam, exploring the regulatory framework, market trends, and strategies for successful advertising in this dynamic market.
Overview
Given Vietnam’s rapid technological development, digital advertising has become a crucial component of its business landscape. By utilizing digital ads, Vietnamese businesses have been able to expand their reach to global customers with greater ease.
Furthermore, the Vietnamese domestic market has continued to expand, drawing the attention of international investors who recognize the potential for further growth. However, it is important to note that Vietnam has strict regulations on the dissemination of information, and investors should take these factors into consideration before embarking on digital advertising ventures.
According to Datareportal, there were 77,93 million internet users in Vietnam at the start of 2023, when internet penetration stood at 79,1% and Vietnam was home to 70 million social media users in January 2023 and equating to 71% of the total population. Moreover, the Kepios Report states that Vietnamese people spend an average of 6 hours and 38 minutes a day on the internet and spent on social media each of which 2 hours and 28 minutes. Further, the data shows that digital advertising spend in Vietnam crossed US$1,04 billion in 2022 and can reach US$1.18 billion in 2023
As the country continues to embrace digital technologies, businesses that adopt innovative and effective digital advertising strategies will succeed in this dynamic market. Currently, in Southeast Asia, Vietnam ranked 4th in terms of digital advertising expenditure.
Regulations in Vietnam on digital advertising
Foreigners who wishes to invest in advertisement company has to acknowledge the legal procedures in advanced. The Law on Investment 2014, Law on Enterprise, Law on Advertising, and the WTO Protocol on Accession regulated these procedures. Decree No.181/2013/ND-CP issued in 2013, also known as “Decree 181”, outlines the core regulations. Since then, it has undergone several amendments, including the most recent one in July 2021, the Government issued Decree No. 70/2021/ND-CP (“Decree 70”). Decree 70 updated several articles in Decree 181, specifically articles 13, 14, and 15, in line with previous drafts. Foreign firms engaged in digital and cross-border advertising should take note of five key changes, along with logistical updates.
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
– The name of a representative orgranization or individual in Vietnam, as well as their email address and contact number.
Business operators must notify authorities of their intention to commence business at least 15 days in advance. They can submit this notification in person, via post, or online.
Infringing advertisements must be dealt with upon request within 24 hours
Decree 70/2021/ND-CP has amended Article 14 of Decree 181/2013/ND-CP to clearly stipulate the process of preventing and removing infringing advertising content. It has also added additional sanctions for handling non-compliance at the request of competent authorities.
Specifically, foreign organizations and individuals trading in cross-border advertising services must handle infringing advertisements upon request from the Ministry of Information and Communications. The processing time is within 24 hours from the date of receipt of the request from the MIC. The portal of the Ministry of Information and Communications will publish information about abusive advertisements.
If processing is not done on time without good reason, the Ministry of Information and Communications will take measures to prevent advertising that violates the law. In particular, with cross-border advertising that violates the law and affects Vietnam’s national security, competent Vietnamese authorities will immediately take measures to prevent illegal advertising. Only when foreign organizations and agencies handle them at the request of the Ministry of Information and Communications will the competent authority remove these blocking measures.
Placement of advertisements
According to Decree 70, publishers and advertisers have the right to request advertising service providers, whether domestic or foreign organizations and individuals, to place ads only on content that adheres to Clause 1, Article 8 of the Cybersecurity Law and Article 28 of the Intellectual Property Law.
Publishers and advertisers can request advertising service providers to implement tools that allow Vietnamese advertisers to remove or control ads that break Vietnamese law, as stated in Decree 70.
There is no longer a need for local partners
Decree 70 has eliminated the previous requirement of partnering with local entities. Previously, Decree 181 obligated foreign businesses to advertise cross-border solely through service providers in Vietnam. According to Decree 70, starting on September 15, 2021, advertisers can directly enter into advertising contracts with foreign platforms such as Google, Facebook, and Youtube. This eliminates the obligation set forth in Decree 181.
The future of digital advertising in Vietnam
The future of digital advertising in Vietnam looks promising, thanks to the country’s rapidly growing economy and increasing internet adoption rates. As more businesses in Vietnam shift their focus to digital channels, the demand for online advertising is expected to rise. In fact, digital advertising now accounts for a significant portion of marketing expenditure in Vietnam, with recent reports projecting spending on digital ads to reach 1044 billion VND (equivalent to US$44 million) by 2022.
Moreover, with the recent implementation of Decree 70, which removes the requirement for foreign businesses to partner with local entities, Vietnam may attract more foreign investment in the advertising industry. This could lead to even more advanced and effective advertising strategies being developed and implemented in the country. However, regulations and laws regarding digital advertising are likely to continue evolving and adapting to keep up with the changing landscape of the digital world.
Conclusion
Operating in the digital advertising industry in Vietnam presents its own set of challenges. Many prominent companies have faced regulatory issues in this space. Therefore, potential investors aiming to enter the Vietnamese market are advised to familiarize themselves with the Advertising Law and its requirements, as well as supplementary legislation. This preparation will help ensure that any digital or cross-border advertising activities can be carried out smoothly.
HMLF is always available to offer assistance in understanding the procedures with authorities.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
