The COVID-19 slump has forced major advertisers like Coca-Cola and Unilever to shrink their out-of-home advertising budgets in Ho Chi Minh City, opening up a window for smaller players to seize the coveted outdoor advertising space there.
Compass Tech, a market tracking firm, has spent the past several months surveying hundreds of billboards in 35 advertising hotspots in Ho Chi Minh City in order to compile a report on how local advertising has been impacted by COVID-19.
According to Compass Tech’s findings, the total value of outdoor billboards in the city reached US$12.9 million in Q4 2020.
The vacancy rate of these billboards has dropped to 27 percent since peaking at 41 percent in May.
The report also indicated that Vietnam’s effective control of the epidemic and the coming year-end season are two major factors that have allowed the domestic advertising industry to rebound from the COVID-19 crisis.
In Ho Chi Minh City, the fast-moving consumer goods (FMCG) sector was labeled as the biggest spender in outdoor advertising, accounting for 42 percent of the city’s billboards.
The real estate sector ranked second, occupying 18 percent of the outdoor displays.
Though COVID-19 has complicated consumer trends, online payments and ride-hailing services have seen a boost, explaining the two percent increase in billboard usage by tech platforms such as Baemin, ZaloPay, Gojek, and Lazada.
Opportunities for SMEs
According to Nguyen Kim Qui, director of Compass Tech, outdoor advertising has witnessed many sector-defining changes in 2020, as illustrated by the absence of familiar names such as Coca-Cola, Vinamilk, and Pepsi from billboards in the southern metropolis.
As the impact of the pandemic still lingers, the banking sector is also paring down on its advertising budget in the final quarter of the year.
Advertising contracts have risen 50 percent compared to the previous quarter, Nguyen Quang Nhut, director of advertising firm Shojiki and head of the Outdoor Advertising Club in Ho Chi Minh City, told Tuoi Tre (Youth) newspaper.
However, as the vacancy rate of billboards remains high, billboard operators are offering discounts to customers.
“We anticipate the outdoor advertising market in the 2021 Lunar New Year season to be dampened compared to previous years," Quy said.
"Due to a drop in revenue, brands will continue to limit their advertising budget.
"However, this is a chance for smaller brands to snatch the coveted spots in the city and conquer the market with short-term campaigns."