Vietnam keeps tabs on digital advertising
The Vietnamese government’s new initiative on cross-border advertisement on digital platforms like YouTube, Google, and Facebook is deemed a step up from previous legislation, particularly regarding censorship and tax obligations.
|Social network advert spending in 2020 in Vietnam came to $58 million. Photo: Shutterstock|
Local authorities last week officially approved a draft decree on amending and supplementing Decree No.181/2013/ND-CP issued in 2013 that focuses on the Law on Advertising. The draft has been officially promulgated and named Decree No.70/2021/ND-CP, which will take effect on September 15.
According to Baker McKenzie, cross-border advertising services in Vietnam are defined as “the use of electronic information sites by foreign organisations and individuals to provide advertising services from systems located outside of Vietnam, for users in Vietnam, with revenues generated in Vietnam.”
Tran Manh Hung, principle and country managing partner at Baker McKenzie noted, “The definition remains very broad and aims to cover both websites and applications providing advertising services.”
Under Decree 70, cross-border advertising service providers shall be responsible for reviewing and checking advertisements published on their platforms to ensure that advertisements are compliant with the Law on Advertising and the Law on Cybersecurity.
In addition, cross-border advertising services have to prevent and remove infringing content upon request of the Ministry of Information and Communications (MIC) and provide information about organisations and individuals involved in such activities that appear illegal to competent authorities upon request.
Platforms that run ads are also required to notify the MIC of their contact information before providing cross-border services in Vietnam. The MIC’s Department of Radio, Television, and Electronic Information will process these submissions and send confirmation within seven working days.
Richard Burrage, CEO of market research firm Cimigo Vietnam told VIR, “I am pleased that platforms should delete illegal content and pay taxes. I suspect the advertisers will comply and continue with their digital ads. However, there will be some interruptions as the data volume will be huge.”
In addition, the decree stipulates that platforms must also pay taxes in Vietnam. The MIC estimates that Facebook boasts 65 million Vietnamese users, YouTube around 60 million, and TikTok 20 million.
Channel News Asia stated that about 40 freshly-minted regulations on popular social media platforms have been adopted worldwide in the last two years, including Vietnam’s Law on Cybersecurity. The European Union last December proposed the Digital Services Act, which requires tech giants to tackle illegal content such as hate speech and child pornography. The United Kingdom and other countries are also drawing up legislation to regulate illegal or otherwise inappropriate online content, including discriminative and racist content.
According to the Vietnam Digital Report 2021 by London-based media firm WeAreSocial released earlier this year, the total online advertising spending in Vietnam in 2020 reached $290 million, including more than $115 million on digital search ads. More than $58 million was spent on social networks, over $45 million on banner ads, $34 million on online video ads, and display ads reached nearly $36 million.
According to data from the Online Advertising Market Report conducted by marketing agency Adsota, revenues from online advertising in Vietnam are predicted to reach approximately $400 million next year.
Le Quang Tu Do, deputy director of the Department of Radio, Television, and Electronic Information said, “This revised decree aims to keep a firm hand on advertising activities of tech giants, thus exerting positive influence on the legally-operating news organisations and broadcasters in Vietnam.”
Foreign organizations and individuals providing cross-border advertising services generating revenue in Vietnam must pay taxes and comply with Vietnam’s laws.
The amount of tax collected from cross-border platforms in the first 11 months of 2020 was about VND1 trillion. But the figure doesn’t truly reflect the real activities of the platforms in Vietnam.