Growth of Online Advertising and Importance of Ad Networks in Vietnam

10 Sep 2009, Vietnam– 2009 is an exciting time to be working in digital advertising in Vietnam. Ordinary Vietnamese, reaping the benefits of continuous economic growth, are connecting to the Internet in record numbers. Digital media consumption is booming, and correspondingly advertisers are increasingly using online advertising in their campaigns.

Indeed, the numbers speak for themselves. The value of online advertising in Vietnam is predicted to reach $US 7.7 million by next year, nearly triple 2008 figures (Nielsen and Yahoo!, December 2008). Furthermore, this year, nearly 1 in 4 Vietnamese (predominantly in major cities) have Internet access (Nielsen, March 2009), more than China and India. Despite a troubled global economy, Vietnam’s digital industries are in rapid growth mode.

However, some barriers remain for entry into the digital marketing space. The break-neck pace of online development has intimidated many companies, which instead opt for traditional media solutions. This lack of understanding of the market creates potential pitfalls for companies and advertisers looking to seriously engage with the 20 million Vietnamese online.

It is certainly understandable why advertisers are at first glance scared off. How can companies deeply rooted in traditional media risk their advertising budgets on platforms they are unfamiliar with?

This is where the value of ad networks emerges. Ad networks make it easy for advertisers to connect with their consumers across hundreds of websites through a single touch point. With ad networks’ advanced ad management platforms, they provide the ability to aggregate and target audiences based upon specific demographics, content that they consume and the environment they are in.

For example, if an advertiser wants to reach women, they can easily buy on a channel consisting of a multitude of sites with content that is specifically targeted at women. If advertisers want to engage youth while they are gaming, listening to music or networking with their friends, they can buy on a channel targeted at youth. In this way, ad networks guarantee far more effective reach and greater engagement with interested consumers.

Working in the Vietnamese digital advertising market, I frequently get asked questions by advertisers and media agencies on online advertising and the value of ad networks. In this article I will address several of the most common questions that I face in the industry.

1. “I only use 2-3 top portals or news sites. These sites reach everyone that I need to reach"

The increasing sophistication of Internet usage has led to audience fragmentation, with niche websites growing at the expense of larger portals and news sites. The average Vietnamese visits more than just the top two or three websites, as due to search engines they have more power and choice to visit content anywhere on the Internet that interests them.

Advertisers need to start focusing on the audience and not the individual website. For example, a woman that is visiting a niche cooking website is as qualified a consumer as much as someone that goes to a top portal. Therefore, the key for advertisers is to reach their audience wherever they are online and the easiest way to maximize reach and frequency is by utilizing a wide variety of targeted websites.

In addition, ad networks enable advertisers to reach the right person in the right environment. When a person reaches the homepage of a large portal, we have no idea what that person is thinking. They might want to buy a new car, rent for a movie, read the news, or any number of things. However, when advertising on deeper content environments which ad networks offer, we not only have a product that delivers greater value, but also have a very good idea of the consumer’s mindset. This significantly improves the probability that an ad is going to be relevant to their concerns and desires.

2. Your websites and ad locations are not top tiered inventory”

Premium ad networks are transparent, and will provide full site listings. This allows advertisers to rest assured that their ads are being displayed in a brand-safe environment. Stringent selection criteria around site, content, appropriateness and ad location ensure that only quality inventory is included.

Furthermore, as ad networks use the standard dimensions as set out by the IAB (Internet Advertising Bureau), high impact and attractive appearance is guaranteed relative to other ads commonly found online. Whereas non-standardised ads in Vietnam often have shared impressions for advertisers like a ‘rotating billboard’, ad networks dedicate every impression to a single brand, assuring quality exposure and engagement.

3. “I do not trust buying on ad impressions. I need to be able to see my ad.”

It is always good to be able to see your own ad on a website, but users do not think the same way. Ad networks recognise that fixed duration ads potentially create major risks, including user fatigue and over-exposure to messages. Over-reliance upon fixed duration ads can have a negative impact on your ROI and other campaign goals.

A distinct advantage of ad networks is their ability to cap frequency of exposure to unique users. For example, if a user has seen an ad 5 times and has not interacted with it, the user will cease to see the ad. In this way, ad networks guarantee ads are directed at those who are interested and will in turn improve user experience on the site and also of the brand.

4. “Why can I not buy ad placements on all those websites individually?”

It is possible for advertisers to book ads on dozens of websites, but not hundreds. Such an endeavour would be time-consuming and expensive, requiring dealing with each individual site for rates negotiation, campaign management and billing. An advertiser or agency would seriously need to examine the ROI of such a difficult undertaking.

More importantly, the most unique advantage of ad networks is the ability to optimise performance of campaigns across a multitude of websites in real-time. Rather than dealing with dozens of websites individually, all inventory is managed on a single platform. The ad management system allows for real time optimization of every campaign, guaranteeing that impressions are delivered to the best performing ad placements automatically. Hence, an advertiser’s budget allocation can be moved from one site to another in real-time. This is not possible with individual site bookings or in traditional media today: once you have made a booking, you are locked into that spend. Networks are the only media owners today that can move budgets on the fly; significantly simplifying the process of dealing with websites individually.

5. “I understand that online advertising is prone to click fraud. How can I trust an ad network?

Click fraud is common internationally in online advertising, and Vietnam is no exception. Malicious scripts, malware and botnets all contribute seriously to invalid clicks. Fortunately, ad networks give advertisers security through independent 3rd party systems like Click Forensics that eliminates invalid clicks before they reach the advertisers. By implementing these click quality management systems across hundreds of sites in the network; it significantly lowers the threat of fraud that companies advertising directly face.

Overall, the value of ad networks is that they remove the hard work for advertisers. They provide a single touch point, letting agencies and advertisers focus on their core competency: to build and execute their digital strategy.

The future looks very bright for digital marketing in Vietnam. With the online advertising industry and Internet audience penetration exponentially growing, advertisers are becoming more open to expanding the online component of their campaigns. Ad networks in the coming years will play an important role in digital marketing through ensuring advertisers are effectively connecting with their consumers and providing maximum reach for every advertising dollar.

Chris Tran is the Country Manager of Admax Network Vietnam, the pioneering and largest Ad Network in Vietnam reaching more than 19 million Vietnamese across more than 75 sites. Prior to this, Chris has been working on the Internet for over thirteen years, managing data operations centers and building enterprise web systems across the world for companies like Sprint Telecommunications, Bayer AG, the United States Air Force and Holcim.

After a career in consulting, Chris returned to Vietnam to work at Exotissimo Travel, developing and creating their online marketing strategy. Chris has deep knowledge in digital marketing, search engine optimization and enterprise web application systems, and worked in the UK, United States, Switzerland, Canada, Japan, Thailand and Vietnam.

 

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