NET INSIGHTS REPORT 2011

About this report: Kantar Media is shedding light on the fast growing Internet advertising industry in Vietnam. The industry is definitely aware of the potential of online advertising but currently marketers lack the reliable and transparent information they have in traditional media fields. We have been conducting Vietnams original in-depth study of online behavior the Yahoo & Kantar Media Net Index for the past 3 years. This years survey was conducted face to face in 4 key cities (Ho Chi Minh, Ha Noi, Da Nang and Can Tho) with a sample size of 1,500 respondents. Net Index respondents are representative of the urban population aged between 15-54 years old. As a pilot project we have carried out continuous advertising monitoring of 10 key websites in the Vietnamese market for 12 months (1st April 2010 - 31st March 2011). The purpose of this monitoring is to gain an understanding of the current state of the online advertising industry in Vietnam. Our online monitoring staff visit 10 selected sites and record the advertising content on each site. The dynamic nature of online advertising means that manual monitoring is not the ultimate solution but it does provide a great overview of the advertising scene. This is why we have decided to release these findings. The 10 sites that have been monitored are: www.24h.com.vn (24h) www.thanhnien.vn (TNIEN) www.dantri.com.vn (DTRI) www.tuoitre.vn (TTRE) www.ngoisao.net (NGSAO) www.vietnamnet.vn (VNNET) www.nhacso.net (NHSo) www.vnexpress.com.vn(VNEX) www.nhac.vui.vn (NVUI) www.mp3.zing.vn (MP3) Where offline advertising has been referred to in comparison with online advertising offline refers to all monitored TV channels, radio stations, newspapers and magazines. At this time there are no available estimates of spending on OOH, direct marketing and other marketing activities. The objective of this report is to shed some light on the development of the Internet and its users in Vietnam. Everyone, from site owners, advertisers and agencies to the users themselves know that the Internet in Vietnam is growing rapidly. What is needed now is clear actionable understanding of just what is happening online. Please contact Clientservice.VN@kantarmedia.com for any further information about this report or our current and proposed services.
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Report Contents
Executive summary .................................................................................. 4 On the surface........................................................................................... 5
How much is being spent on online display advertising? ............................................... 5 Where is online advertising expenditure going? ............................................................. 5 How does online advertising activity vary throughout the year? .................................... 6 What share of total advertising expenditure is spent online? ......................................... 7 Who is using the Internet? ............................................................................................... 8 How are people accessing the Internet? ......................................................................... 9 How often are Internet users online? .............................................................................. 9

Going deeper........................................................................................... 10
What are people doing online? ...................................................................................... 10 Whos visiting? ............................................................................................................... 11 Who is advertising online? ............................................................................................. 12 How are the biggest offline advertisers advertising online? ......................................... 13 Which sectors are advertising online? .......................................................................... 13 and how does their online advertising compare to offline?....................................... 14 Where are the different sectors advertising? ................................................................ 15 How do competitors compete in their online advertising activities? ............................. 16
Telecommunications: .................................................................................................... 16 Transportation: .............................................................................................................. 17

Kantar Media Vietnam's Services ........................................................... 18

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Executive summary
Total monitored spend on 10 biggest display advertising sites in Vietnam was $26,316,500 (US) (April 2010-March 2011). Display advertising on the Internet made up a 3.5% share of all advertising expenditure over the monitoring period. Display advertising on the Internet is growing but it doesnt reflect the high reach the Internet is achieving in Vietnam relative to offline media types. Internet penetration has grown across all ages between 2010 and 2011. Over of all urban residents of Vietnams 4 biggest cities are now online regularly. Youths are driving the growth of internet penetration in Vietnam. The 3 main emerging online usage trends this year are the increased the usage of social networks and online gaming and the growth of mobile access. VNExpress is the leading website in terms of advertising expenditure on the site. Advertisers spent $7.8 million (US) on the site during the monitoring period. Vinaphone is the biggest online advertiser followed by 2 other telecommunications sector advertisers. Vinaphone spent $1.1 million (US) on display Internet

advertising during the monitoring period. Telecommunications is the biggest spending sector online. Telecoms spent $4.2 million (US) on display Internet advertising during the monitoring period. Some of the biggest, strongest and most proactive offline advertisers are almost invisible online.

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On the surface
How much is being spent on online display advertising? In the 12 months until March 31st 2011 there was $26,316,500 (US) of display advertising monitored on the 10 sites. Its important to note that this figure doesnt take into account any discounts on rate card prices of the insertions monitored. Where is online advertising expenditure going? VNExpress is clearly the strongest performing website in terms of attracting advertising dollars. Vietnamese Internet-goers thirst for online news is highlighted by the fact that the top 4 ranked sites are all news sites. Its going to be interesting to see whether growth in entertainment, socializing and mobile access alter the balance of online ad spend in the coming years.
$8 $7 $6 $5 $4 $3 $2 $1 $0 Millions Advertising expenditure per site (April 2010 March 2011) $7.8 $5.8

$4.3
$2.6 $2.1

$1.5

$1.0

$0.5

$0.5

$0.3

VNEX

24H

DTRI VNNET MP3 NGSAO TTRE TNIEN NVUI NHSo

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Not only are those the top four sites news sites (VNExpress, 24h, Dantri and Vietnamnet), they also account for over 75% of the advertising expenditure across the 10
monitored sites.
Share of online advertising expenditure per site (April 2010 March 2011) 2% 2% 1% VNEX 4% 5% 24H DTRI VNNET MP3 10% NGSAO

30% 8%

TTRE
16% 22% TNIEN NVUI NHSo

How does online advertising activity vary throughout the year? Theres a definite upwards trend in online spend as well as the share of overall advertising going online across the 12 month monitoring period. These figures support industry estimates that have placed Internet spending at around 1-2% in 2009 and somewhere around 3% in 2010.
Ad expenditure by month and the online share of all advertising expenditure (April 2010 March 2011) $4,000,000 $3,000,000 6% 5%

4%
$2,000,000 $1,000,000 1% $0 APR '10 MAY JUNE JULY '10 '10 '10 AUG '10 SEP '10 OCT '10 NOV '10 DEC '10 JAN '11 FEB '11 MAR '11 0% 3% 2%

NET ADEX ($ MILLIONS)

SHARE OF ALL ADEX (%)

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The dip in the early months of 2011 is not exclusive to the online advertising industry. It is shown across the industry around the new year (Tet) period and was displayed across all the media types.
Advertising expenditure by media type (April 2010 March 2011) Millions $60 $50 $40 $30 $20 $10 $0 MAY '10

JULY '10

AUG '10

APR '10

DEC '10

JUNE '10

NOV '10

OCT '10

JAN '11

FEB '11

SEP '10

INTERNET

TV

NEWSPAPERS

MAGAZINE

RADIO

What share of total advertising expenditure is spent online? Its clear that advertisers world-wide are increasing their focus on digital advertising. Vietnam is no different although the process is still in its primitive stages. As Table 4 and Table 5 (next page) show, spending on display advertising is still a relatively small share of the overall advertising spend. TV is the advertising king in Vietnam and this isnt going to change any time soon but Internet is definitely starting to develop its share.
Table Share of advertising (April 2010-March 2011) 10.3%

6.2% 0.2%
3.5% INTERNET TV NEWSPAPERS MAGAZINE

79.7%

RADIO

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MAR '11

Who is using the Internet? Vietnams young and developing population coupled with improved Internet accessibility have helped Internet penetration in Vietnam become amongst the strongest in the South East Asian region.
Media reach in the past week (%) by age. Source-MHS 2010 52 week fieldwork, 4 cities. 100 80

Internet
TV Radio Newspaper Magazine 15-19 20-24 25-29 30-34 35-39 40+

60
40 20 0

The costs of internet access mean that its only natural to expect the higher socioeconomic levels (SEL) to be more likely to be internet users. There are a higher proportion of upper SEL ranked people using the Internet than any other media type and far fewer members SEL 4 (bottom 40% socio-economic classification of the population). SEL represents both durable items owned and highest level of education. Its considered a far more reliable estimate of spending power in Vietnam due to the sensitive nature of income related questions.
INTERNET
TV NEWSPAPER MAGAZINE RADIO 8 10 13 17 18 SEL1

21
20 23 29

34
30 35 40 33 SEL2 SEL3 SEL4

36
40 30 15 41

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How are people accessing the Internet? There is a definite shift to private access. Better access to Internet connection, cheaper computers and mobile devices are all contributing to Vietnamese citizens ability to get online on their own terms. The growth of mobile access is strongest in the smaller cities of Da Nang and especially Can Tho where traditional access can be more difficult than in the 2 biggest cities.
88 75 2010 42 29 28 17 2011

36 12 13 19

30

13

18

13

How often are Internet users online? The Internet has become the second most accessed media type on a daily basis behind TV. Over 70% of Internet users claimed to have been online yesterday. Not only are Internet users going online more often theyre seemingly very highly engaged. More than 80% of people who accessed the Internet yesterday agree that when I need information the first place I look is the Internet.
Accessed media type yesterday (%) Based on Kantar Media MHS Survey 4 city survey Week 1-52 2010

95

40

42

23
6 TV NEWSPAPER MAGAZINE RADIO INTERNET

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Going deeper
What are people doing online? Whilst the most popular online activities in Vietnam search, keep up to date, communicate one-to-one - remain popular with almost all users, there are some significant increases in the usage of social networks, using mobile devices to access the internet and online gaming.
100

90
80 70 60 50 40 30 20 10 0 Forum Purchase News UGC Social network Gaming Search Portal Blog

2010

2011

Email

IM

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Mobile

Whos going where? Advertisers decisions are not just based on absolute reach, but also the ability of a site to reach their specific target market. The bigger news sites generally attract older than average males. Each of the music sites attracts a younger audience. MHS results provide site level analysis so all users of the Zing family of sites (Zingme, Zing MP3, Zing News etc) are aggregated in this analysis.

ZING ALL SITES NHSO NVUI

24H

VNEX DTRI VNNET TTRE

TNIEN

NGSAO

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Who is advertising online?

Online advertising top spenders (April 2010-March 2011) Thousands $1,200
$1,071

$1,000
$803

$800 $600

$766 $522 $402

$353

$349

$338

$295

$282

$265

$239

$223

$218

$400
$200 $0

$289

$212

$211

$227

$211

Online advertising is a growing market but its being pushed hardest by specific sectors. Just by scanning the top 20 online advertisers you will notice an abundance of telecommunication (5) and transportation companies (6).

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$197

How are the biggest offline advertisers advertising online? Its interesting to note that the biggest advertisers on offline media in Vietnam arent the most proactive Internet marketers at this stage. Aside from Unilever, the top 10 offline advertisers are well down in the ranks of online advertisers.
Biggest offline advertisers online ad spending ranking (April 2010 March 2011). OFFLINE RANK BIGGEST OFFLINE ADVERTISERS ONLINE RANK 1 UNILEVER VIETNAM 5 2 P&G VIETNAM Co. Ltd. 146 3 TAN HIEP PHAT Beverage Group 162 4 MASAN Food Corp 450 5 VINAMILK CORPORATION 70 6 FRIESLAND CAMPINA VIETNAM 48 7 PEPSICO VIETNAM 297 8 AJINOMOTO VIETNAM Ltd. 751 9 COCA-COLA VIETNAM Ltd. 24 10 UNILEVER Bestfoods & ELIDA P/S (VietNam) Ltd. 115

Which sectors are advertising online? Given the number of telecommunication and transportation companies amongst the biggest online spenders its unsurprising that telecommunications is by far the biggest spending sector online.
10 biggest spending sectors online (April 2010 March 2011). $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Millions $4.2

$2.8 $2.1 $2.1 $2.1 $1.6 $1.5 $1.4 $1.3

$1.1

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and how does their online advertising compare to offline?

The clothing, apparels and textiles sector followed by IT and office technology are the most proactive online advertising sectors (in comparison to offline). These sectors are spending up to 7 times more on Internet advertising than average. Food, hygiene and beauty and household cleaning are the most active advertising sectors in Vietnam, but at this stage they are using their spending power sparingly on the Internet. Now that the majority of urban Vietnamese are online it will become increasingly important for these advertising giants to increase their online presence.
Sector share of all advertising spend online compared to offline (includes TV, Press, Radio) (April 2010 March 2011) ONLINE TELECOMMUNICATION TRANSPORTATION CLOTHING - TEXTILES DISTRIBUTION FINANCE - INSURANCE HYGIENE & BEAUTY IT & OFFICE TECHNOLOGY TRAVEL & TOURISM EDUCATION - TRAINING FOOD PROPERTY PHARMACY & MEDICINE HOUSEHOLD APPLIANCES AUDIO-VISUAL INFORMATION MEDIA DRINKS FURNITURE & DECORATION SERVICES CULTURE & LEISURE BUILDING INDUSTRY HOUSEHOLD CLEANING ENERGY INDUSTRY CHARITY-SPONSORSHIP PUBLISHING DIVERSE PUBLICITY SPORT EQUIPMENT/ WEAR AGRI-FISHERY-GARDERNING 16% 11% OFFLINE 4% 3% 1% 2% 2% 19% 1% 1% 1% 22% 1% 7% 3% 2% 1%

8% 8% 8% 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% 2% 2% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0%

10%
1% 1% 0% 1% 11% 0% 0% 0% 0% 3% 0% 1%

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Where are the different sectors advertising?

While we know that the biggest news sites are attracting the lions share of online display advertising, the biggest spending sectors have quite varied spending patterns. The clothing, apparels and textiles sector spends almost entirely on news sites whilst the hygiene and beauty and telecommunication sectors spend more evenly across all types of sites including the music sites. VNExpress attracts a very high proportion of the spending from the finance/insurance and transportation sectors while 24h is attracting a lot of the distribution and clothing, apparels and textiles sectors advertising spend.

Table 12 Sector spending share per site (April 2010 March 2011).

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
TELECOMMUNICATION TRANSPORTATION CLOTHING - APPARELS - TEXTILES DISTRIBUTION FINANCE - INSURANCE HYGIENE & BEAUTY IT & OFFICE TECHNOLOGY TRAVEL & TOURISM

EDUCATION - TRAINING
FOODS VNEX 24H DTRI VNNET MP3 NGSAO TTRE TNIEN NVUI NHSo

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How do competitors compete in their online advertising activities? Telecommunications: Telecommunications is by far the most competitive advertising sector online, especially the mobile carriers. Expenditure by telecommunications companies is quite widely spread. In fact, Mobifone and Vinafone are the only 2 advertisers who have advertised on all 10 of the sites monitored.
Table 13 Telecommunications advertisers expenditure per site (April 2010 March 2011). VIETTEL VNPT

NOKIA A.S.
VMS - MOBIFONE VINAPHONE $0 VNEX 24H $200,000 DTRI VNNET $400,000 MP3 $600,000 NGSAO TTRE $800,000 TNIEN $1,000,000 NVUI NHSo

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Transportation: Honda is by far the biggest transportation advertiser (and #4 spending overall). Unlike telecommunications advertisers, Honda is the only company to advertise on a big scale outside the big 3 sites (with zing.mp3). There is almost no ad spending from the biggest transportation advertisers beyond the 5 biggest sites. The car manufacturers Ford and Toyota also have completely different approaches. Both use Dantri but Ford has invested heavily in promotion on 24h while Toyota has spent the majority of their online budget with VNExpress.
Table 14 Transportation sector advertisers advertising per site (April 2010 March 2011). SUZUKI YAMAHA PIAGGIO HONDA FORD

TOYOTA
$0 VNEX 24H $100,000 DTRI $200,000 VNNET MP3 $300,000 NGSAO $400,000 TTRE TNIEN $500,000 NVUI NHSo

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Kantar Media Vietnams Services Building Media Momentum Together

Kantar Media is the one stop shop for media research in Vietnam. Our global experience as part of the Kantar brand and our local expertise developed over more than a decade in Vietnam allow us to key insights to the ever evolving media environment. Our syndicated and customized service offers can provide the answer to any media question. TAM (Television Audience Measurement) TV is a very powerful medium in Vietnam. We can tell you exactly what is being watched, who is watching it and when. Our inhome measurement panels cover the 6 biggest cities and the 3 economic regions of Vietnam. MHS (Media Habits Survey) The media landscape in Vietnam is vast and expanding. The MHS brings it all together to provide a 360 single source understanding of ever changing media habits in Vietnam. Yahoo & Kantar Media Net Index Vietnams deepest study of online behavior is undertaken yearly in partnership between Yahoo and Kantar Media. Now in its third year the study covers all key and developing areas of online behavior. Media Intelligence We are monitoring TV, radio, print, Digital OOH and now Internet advertising 24 hours a day 365 days a year to provide continuous understanding of the dynamic Vietnamese advertising environment. Customized Media Research Our media research experience and capabilities mean we can solve any media research question. To see how Kantar Media can provide vital insights to match your media needs contact ClientServiceVN@kantarmedia.com.