Social networks now rival search engines as an effective online marketing and advertising channel, gaining a significant market share and raking in huge revenues in Viet Nam and elsewhere.


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Social networks now rival search engines as an effective online marketing and advertising channel, gaining a significant market share and raking in huge revenues in Viet Nam and elsewhere.


A report on domestic eBusiness Index prepared by the Vietnam Ecommerce Association (VECOM), says that in 2016, 34 per cent of domestic businesses advertised on social media, six per cent higher than in 2015.

In fact, social media has surpassed search engines to become the most favoured online means of advertisement, employed by 47 per cent of total domestic businesses, with search engines coming in second at 41 per cent, the report says.

Because it is economical and effective, social network marketing has been growing at a rapid pace with both large corporations, small and medium enterprises and individual sellers using it to good effect.

Tran Trong Tuyen, VECOM General Secretary, said that around 70 per cent of individual retailers in Viet Nam run their own advertisements on their Facebook page instead of relying on tools such as Google Adwords. It is estimated that this segment saw revenue growth of around 10 per cent in 2016.

Social media advertisement is now seen as a reliable and effective tool, with about 46 per cent of businesses reporting to have successfully reached their desired demographic, compared to the 44 per cent on search engines in Viet Nam.

“The online marketing field has immense potential for growth, without relying on one particular channel,” said Tuyen.

Presently, 38 per cent of domestic firms use their own website as their main sales platform while 34 per cent rely on social networks.

Experts estimate that in 2017, Vietnamese businesses will spend around US$1.5 billion on advertising, 16 per cent of which will go to online marketing channels.

“With more than 47 million Internet users and more than 29 million smartphone users, Viet Nam is among the countries with the largest online connections in the region. So online marketing through social networks is an inevitable trend, led by global technological developments,” said Dang Tien Phuong, Ford Vietnam’s Head of Marketing.

Yet, in this fast growing market of online advertising, only a handful of Vietnamese marketing firms have managed to gain a foothold.

At present, household names like Facebook and Google dominate the online marketing scene in Viet Nam, with the majority of advertising fees paid by domestic firms flowing to these companies despite several recent controversies.

The report also mentions several downsides to the emerging trend.

The State Bank of Viet Nam is working with the Ministry of Finance and General Department of Taxation on stopping tax fraud and illegal transactions via social media, to help the Ministry of Information and Communications (MIC) manage this lucrative sales medium, said Le Quang Tu Do, Deputy Head of the MIC.

In the domestic advertising market, social networks and search engines are followed by email at 36 per cent, online newspapers at 34 per cent, and printed newspapers at 20 per cent. Television lags far behind at around 10 to 13 per cent. 

VNS