MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM Le Thi Thanh Huyen “ONLINE ADVERTISING APPLICATION IN PROCTER&GAMBLE VIETNAM” FINAL PROJECT MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor: Dr. Dang Ngoc Dai Ho Chi Minh City (2007) ACKNOWLEDMENT May I take this chance to thank many people for making this project possible. I would like to thank my tutor, Dr. Dang Ngoc Dai for his guidance and support throughout the end-course project and to my mentor, Mr. Dau Quang Phan for his encouragement advice and quick respond when I need technical assistance. My thanks also go to the professors who involving in lecturing for supporting me in understanding my academic endeavor. I would also like to thank Mr. Serge and Ms. Tran for strong coordination and support throughout the course. My special thanks are to Management Board of Vietnam and Belgium program, especially, Mr. Bayen and Mr. Tran Anh Tuan for their strong collaboration in developing this course. TABLE OF CONTENT Executive summary Chapter 1: Introduction Chapter 2: Online Advertising Overview 2.1 Internet characteristics 2.2 Internet comparison with other media 2.3 Online advertising formats 2.4 Online advertising trends in the world 2.5 Vietnam online advertising market context 2.5.1 Internet penetration 2.5.2 Online advertising trends in Vietnam Chapter 3: Business Environment Analysis 3.1 Market analysis 3.1.1 Market context 3.1.2 Target audience 3.1.3 Advantages of online advertising 3.1.4 Competitor analysis 3.1.5 Case: Pepsi’s and Unilever’s online advertising campaigns assessment 3.2 Internal analysis 3.2.1 P&G overview 3.2.2 The current advertising strategy of P&G 3.2.3 SWOT analysis Chapter 4: Online Advertising Application in P&G Vietnam 4.1 Objectives 4.2 Online strategy and tactics 4.3 Online advertising development Conclusion Reference materials Appendix ABBRIVIATION P&G Procter & Gamble FMCG Fast Moving Consumer Goods TNS Taylor Nelson Sofres SMS Short Message Service CRM Customer Relationship Management HCMC Ho Chi Minh City OOH Out-of-home TVC Television Commercial TOM Top of mind TABLE AND CHART INDEX Chart Chart 1: Internet consumption (Share of voice) Chart 2: Media consumption trend Chart 3: Internet penetration in four key cities Chart 4: Internet access frequency in four key cities Chart 5: Internet surfer profile by Gender and Age group Chart 6: Internet surfer profile by Education and Income Chart 7: Internet advertising impact Chart 8: Print advertising impact Chart 9: TV advertising impact Table Table 1: Unilever’s spending proportion by media Table 2: Effectiveness of Unilever’s online advertising campaigns Table 3: P&G’s spending proportion by media Table 4: Sample age distribution in HCMC i EXECUTIVE SUMMARY Procter & Gamble (P&G) is one of leading FMCG companies in Vietnam market. P&G is also the second player in Vietnam advertising market with total spending (based on TNS data) at USD 17 million in 2006. In Vietnam, P&G only uses traditional media that is TV, print and radio. TV is still the king but there is a fact that people nowadays have a tendency to spend less on TV, print and radio while spends more on internet. In addition, TV, print and radio traditionally enable one way communication only while internet allows interactivity with consumers. Internet seems to have more advantages than other current media. However, Vietnam is just in the first stage of e-commerce and some companies still consider internet as a traditional channel. Companies show their concern on using online advertising tools and there is no research company studies the effectiveness of online advertising. For above reasons, there is a need to find out whether internet works effectively and should and how P&G use internet as a new channel beside its current channels. To answer for above-mentioned questions, the project explores the following matters: - Vietnam advertising context which mentions online advertising trends in Vietnam. Advantages of online advertising in terms of cost efficiency, convenience and target audience. Online advertising effectiveness is also measured by the attitude of internet users towards advertisements on internet. ii - Case study: success of online advertising campaign of Unilever who already aggressively use internet as a supporting tool in the last Lunar New Year and Pepsi who currently uses internet as a main channel to do promotion. - Online advertising application in P&G Vietnam situation. A research is carried out to support the project. However, because of limitation in time and resource, just a small sample size is recruited. The data, therefore, do not ensure a high fidelity. Overall, internet has some advantages in comparison with other media which are i) penetration rate is quite high and increasing; ii) people whom internet reaches are young, well educated and have high income, iii) internet can convey more information and get feedback of consumers quickly; iv) there is no limitation in internet and the cost is relatively lower than other media. In addition, the online advertising strategy of Unilever has a good result in terms of image, consumer’s recall and business. From that point, although current media such as TV, print and radio still show their effectiveness, P&G should use internet as an additional channels to support offline activities. With condition of Vietnam market which is in the beginning period of e-commerce, P&G can use online advertising under the forms as follows: website, banner ads and email. However, these forms should ensure the attractiveness and innovation to stand out from the cluttered advertising environment. Page 1 Chapter 1 INTRODUCTION Procter & Gamble (P&G) and Unilever are two market leaders in Vietnam FMCG market. Unilever, therefore, becomes a big competitor of P&G. Their products are in harsh competition in most of categories such as hair care, skin care and laundry. According to TNS, in 2006, Unilever spent USD 49 million on advertising of which USD 42 million was on television. Beside key channel TV, Unilever also uses Print, Radio, Internet and Out-of-home (OOH). At the end of last year, on the occasion of Lunar new year (Tet holiday), the company launched a series of campaigns focusing on internet. They use online communication as a backup to offline communications. These activities are considered as a part of package to reduce marketing communication budgets and at the same time, reaching a wider audience. Meanwhile, most of marketing activities of P&G are advertising on TV, Print and OOH. These advertising media have used for many years, but recently there is a need to locate new advertising media that are less costly, less cluttered and potentially more effective than the established media. Objectives of the project The project studies the effectiveness of online advertising and considers the possibilities of applying online advertising in P&G business. Scope of the project Page 2 The project tries to explore the effectiveness of online advertising in Vietnam market towards FMCG products only. Methodology Besides data get from government and market research companies, data also get from a research which is carried out to support the project. However, because of limitation in time and resources, just a sample size is recruited which means the high deviation in data. Structure of the report There are four main parts to this report Part 1 gives the reason to choose this project, project’s objectives, scope and methodology used to support the project. Part 2 introduces some concepts, definition and overview of online advertising in the world and in Vietnam market context. Part 3 explores influential factors to online advertising application in P&G Vietnam. Part 4 examines the development of online communication in P&G business. [...]... banner hanging such as online survey, rich media banner ads, in- game ads, and in- streaming ads and so on In the other hands, the main source of income of online advertising companies is from searching serv companies With these online advertising formats, charging and effectiveness, 3.1.2 Target audience According to Media Habit Survey of TNS conducted at the beginning of 2006, about 54% internet surfer... total spending on advertising They forecast internet advertising in Vietnam can get a growth rate of 100% per year, and reach 600 billion of turnovers in 2010 In 2006, online advertising market is apparently quite quiet However, behind the quiet, there are undercurrents which preparing for a new leap when online advertising affirms its outstanding advantages efficiently supported by global internet Companies... more absorbable While internet users are driven by their purpose of obtain information, internet advertisements such as pop-ups, banners represent an interruption and obstacles for them For this reason, internet advertisement lessens its effectiveness 2.3 Online advertising formats Online advertising are use of internet as advertising medium There are many types of online advertising as follows: Website... with internet than with newspaper and magazine Internet accounts for 14% of total media consumption compared to 52% to TV and 27% to radio (see chart 1) Online advertising trends Credit Suisse First Boston (CSFB) estimated that online advertising turnover in 2006 is USD 16.6 billion and will be reach 33.8 billion in 2010 Budget for online advertising just accounts for a small proportion in total spending... Besides, attitude of internet users towards online advertisement seems to be better than advertisement on TV and print P&G should apply online advertising into its advertising strategy, not because of following the trend of market, but online advertising already proves its effectiveness and efficiency Internet advertising is a potential medium; conventional media The company should combine many media to... say, about 15% for both HCM and Hanoi (See chart 4 in Appendix 3) 2.5.2 Online advertising trends in Vietnam According to Vietnam Advertising Associates (VAA), Vietnam advertising turnovers in 2006 is VND 12,000 billion and is estimated to reach 24,000 billion in the next 15 years The growth rate of advertising market is high, from 20% to 30% per year low Total turnover of leading websites is about 64... quite high education people who belongs to high frequent shopping consumer segment 3.1.3 Advantages of online advertising in Vietnam Besides advantages of internet in general as mentioned in chapter one, online advertising in Vietnam market also has the followings advantages: Cost efficiency Internet offers companies a new tool of advertising to reach target customer more effectively Normally, it costs... result which shows high brand awareness and increase in market share for most of brands Especially, as per a survey conducted by AC Nielsen in Mar, Omo and Comfort are in top 5 favorite brands This result also demonstrates the contribution of online advertising in the total campaign The high internet exposure partly makes brand awareness increase In addition, internet enables brands to communicate with... proportion in total spending (e.g 2.6% in Europe) However, the growth rate of online advertising is extremely high which always maintains at the first compared with other traditional adverting tools rate is 21% in 2004 and tends to increase in the next coming years Online advertising company also gains a high growth rate In the first quarter of 2005, Google gained a profit of USD 369 million out of... - Vietnam Idol Contest (www.vietnamidol.com.vn) 80% 42% 5% DOVE - Product promotion (www.dovevietnam.com) N/A N/A 2% (*) Self conducted research (**) web www.alexa.com 3.2 Internal analysis 3.2.1 P&G overview History Procter & Gamble was founded by William Procter and James Gamble in Cincinnati in 1837 The company handles 300 brands in 180 countries P&G Vietnam which was established in 1995 is a joint . 2.3 Online advertising formats 2.4 Online advertising trends in the world 2.5 Vietnam online advertising market context 2.5.1 Internet penetration 2.5.2 Online advertising trends in Vietnam. 2 introduces some concepts, definition and overview of online advertising in the world and in Vietnam market context. Part 3 explores influential factors to online advertising application in. 2.3 Online advertising formats Online advertising are use of internet as advertising medium. There are many types of online advertising as follows: Website. Website for a brand is an invaluable