The unclear legal framework on advertisement industry and the strict licensing requirements in Vietnam both have hindered the development of domestic ad firms.
According to ad firms, they have to follow a lot of different procedures and obtain 20 signatures from competent agencies to be able to install a billboard.
Procedures bother businesses
In HCM City, the ad programming drawn up by districts’ authorities simply based on the existing billboards, which means that the billboards are installed before they are licensed.
In general, businesses want to install billboards on advantageous positions, which, according to the current laws, are not reserved for billboards. Therefore, in order to be able to install billboards there, they have to “dodge the laws.” The most favourite way for them is to join forces with cultural houses to install “propaganda posters.” As a result, a series of billboards have been arisen on the areas not reserved for billboards.
It is estimated that the total cost for an outdoor square billboard 2m x 2.5m on Le Loi Street in district 1 of HCM City is up to $25,000 per annum. This means that the sums of money to be paid to the state budget would be very high. However, in fact, the State fails to collect enough money.
According to Do Kim Dung, deputy Chair of the Vietnam Advertisement Association, it takes from 6 months to one year to follow necessary procedures to obtain a license for a billboard.
In order to get the license, ad firms would have to contact different state management agencies to get the nods from them, including the transport, the police, cultural management, food hygiene, pharmacy and agriculture agencies. However, no agency comes forward and takes main responsibility for licensing. As a result, ad firms have to bear a lot of kinds of additional expenses.
The draft advertisement law is being discussed at the ongoing National Assembly’s session, under which the licensing for outdoors advertisement would be removed. The information has brought high hopes to ad firms, because this would help them shorten the time needed to follow administrative formalities.
Different state agencies make different interpretations about the laws
Ad firms complain that they cannot understand the way the state management agencies are working. An ad piece can be accepted by some local television stations, but may be refused by other local television stations.
The currently valid Advertisement Ordinance prohibits the advertisements which come contrary to the Vietnamese culture, traditional customs and habits. However, there has been no legal document which clarifies the behaviors considered as coming contrary to the Vietnamese traditional habits and customs.
Therefore, the same legal regulations could be interpreted by state management agencies in different ways, which then make different decisions about whether to license the advertisement programmes.
Under the current regulations, enterprises must not spend more than 10 percent of their reasonable total expenses on advertisement campaigns. Both enterprises and ad firms complain that this is an unreasonable regulation, because enterprises need to be given the right to decide themselves what they should spend money on and how much.
However, analysts say it’s necessary to set up detailed regulations on the advertisements on Internet, because this is a specific field. At present, enterprises do not have to ask for permissions for the advertisements on Internet, while no agency takes responsibility for the ad pieces on Internet which come contrary to the traditional habits and customs.