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Ho Chi Minh City’s bus advertising scheme on verge of flopping

Wednesday, March 20, 2019, 09:48 GMT+7
Ho Chi Minh City’s bus advertising scheme on verge of flopping
A bus in Ho Chi Minh City with an advertisement placed on its exterior. Photo: Quang Dinh / Tuoi Tre

The last four auctions for advertising spots on Ho Chi Minh City buses have attracted zero bidder, threatening to foil a scheme that could earn the southern metropolis an extra VND135 billion (US$5.81 million) yearly.

In 2017, the administration of Ho Chi Minh City approved a scheme that allowed advertisements to be placed on the exterior of state-subsidized buses in the city.

The municipal Public Transport Management Center is tasked with holding auctions to find the highest bidders for advertising packages.

Advertising revenue will be added to the city’s budget and in turn used to develop public transport in the southern metropolis.

For non-subsidized buses, operators of the respective routes are given full autonomy to find advertising partners and spend money they earn from the activity.

After two years of implementation, the new scheme has not had much impact on bus advertising in Ho Chi Minh City, with only one successful auction held so far.

The four most recent auctions were a complete failure, as not a single party showed up to bid for advertising packages offered by authorities.

“The advertising trends of today have changed,” said Le Ha An, deputy director of the municipal Public Transport Management Center, noting the rise of advertising on social media platforms.

“Buses are no longer an attractive medium for advertisements,” he said.

Efforts have been made to attract more advertisers to buses, such as lowering the required advance payment down to 5-10 percent of the contract value, compared to 20 percent as before, An said.

Advertisers are no longer bound by three-year contracts and instead are offered more flexible one-year or two-year plans that would cater to a wider group of potential clients.

According to An, the yearly per-vehicle rates of bus advertising in Ho Chi Minh City are VND92.9 million (US$4,000), VND102.69 million ($4,400) and VND251 million ($10,800) for 40-seat, 55-seat and double-decker buses, respectively.

These rates have been reviewed and approved by the municipal administration.

To lure advertisers, the city plans to further divide current bus advertising packages into even smaller ones, starting from VND550 million ($23,700) per package for one year of ad placement on its least-favored routes.

The most profitable routes can fetch VND5 billion ($215,400) yearly from advertising revenues.

With a fleet of more than 1,200 buses, the city expects to rake in over VND135 billion ($5.81 million) annually.

Information regarding auction dates, advertising rates and available buses will be made available on the official website of Ho Chi Minh City Bus (https://www.buyttphcm.com.vn/), An said.

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