Ad agencies cry foul over new restrictions

By Dat Nguyen   May 28, 2021 | 06:00 pm PT
Ad agencies cry foul over new restrictions
A person uses a smartphone at a bus stop. Photo by Shutterstock/Vietnam Stock Images.
A new decree seeking to tighten online advertising regulations goes against current international practices and will make domestic companies less competitive, local firms say.

The decree, set to take effect June 1, limits the maximum duration for a user to wait before skipping an ad at 1.5 seconds. It also prohibits the insert of ads into the middle of a news article.

The Vietnam Advertising Association, in a communiqué to the Ministry of Information and Communications, has said that the new regulations are impractical.

A period of 1.5 seconds is too short to convey a message, with most global platforms having users watch an ad for 5 seconds before giving them the option to skip the remaining part, said the association, which represents nearly 450 media agencies and news outlets.

Global newspapers allow ads to appear in the middle of articles for free users, and this should also be the case in Vietnam, because users have the choice to click on the ad or ignore it and continue reading, the association argued.

The new regulation will create unfair competition between Vietnamese companies and global advertising giants like Facebook and Google, which account for over 80 percent of total ad revenues in Vietnam.

They won’t have to abide by Vietnamese laws and therefore won’t make changes to their ads format, the association pointed out.

It said the pandemic has created high demand for companies to advertise their products and services online, and the new decree will only create more difficulties for local businesses and advertising agencies.

The Advertising Law was enacted nearly 10 years ago and has not caught up with recent technology and media developments. Instead, the latest regulations create even more hindrances to the sector’s development, the association said.

Revenues from online advertisements in Vietnam is set to hit $400 million next year, up 345 percent from 2019, according to advertising agency Adsota.

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