The Mumbrella confessional: How corruption in Vietnam’s commercials production industry is hurting the work
In the second of an occasional series, an anonymous agency creative director tells Mumbrella’s Robin Hicks about systemic corruption in the commercials production business in Vietnam, and how it is hurting the quality of the country’s advertising output.
I’ve never taken a ’sweetener’ or a ’thank you’ in my life. Sometimes it feels like I’m the stupid one for not doing so. All this money is spinning around: Three thousand, five thousand, sometimes US$10,000 I could make personally for awarding a TV project to a production company.
There are managing directors, executive creative directors and executive producers who demand fees from production houses for awarding jobs. There’s one MD at an international agency who is building a house in Bali with the profits he gets from productions. Those productions have dropped in number over the last few years as, like many agencies, they tend to be doing a lot less TV and more digital/content. But when they were doing between 35 and 40 TVCs a year, it soon mounts up. Do the maths – around US$200,000 dollars in brown envelopes, completely tax free.
Last year, all the production houses had a party recently when one particular EP left Vietnam. This individual used to demand so much money because of this position of power – awarding to the highest bidder.
I never realised until I got to Vietnam how dirty the production industry can be. Every production house fights for each job, that’s fair. And they’re expected to pay for those jobs, that’s not fair.
One I know about, because a colleague’s ex-girlfriend works there, used to turn down jobs because they were asked for money under the table. But they soon realised that if they didn’t pay it, their business would be marginalised; they would get one in 10 jobs instead of one in three or four.
On the other side, a very large production house in Ho Chi Minh City declares internally that they aim to take between 50-60% of the budget for themselves.
So they only use 40-50% of the budget to make the actual TVC. Imagine what’s left after the agency, EP, ECD and whoever else have taken their bit. Insane.
Agencies are taking their cut too. Some call it a “Producer’s fee” yet they don’t actually have a Producer. And the money is paid into private bank accounts. One agency EP spends many holidays in Europe and around the world. Nice for her. Totally unrealistic on her salary. So….?
These are agencies that are working for multinational clients. They’re not small local clients we’re talking about.
It is relatively cheap to make TVCs in Vietnam. A few years ago, one network Agency never had a budget of over US$20,000 to make a commercial. But occasionally you have a budget over US$300,000 sometimes as much as $600,000, but everyone wants a slice of the pie.
If it’s a US$150,000 budget, the Agency, which has usually been cut to the bone on fees by the client, wants 10% of that. The production house, which in turn is being squeezed by the Agency, needs to mark up the work too to make their money. And they tend to be looking for 20-30%, often more. Then the producer wants a kickback too, anywhere between US$3-5,000. And some ECDs also want envelope with US$3-5,000 in it. Take off tax, and suddenly $150,000 is closer to $75,000.
$150,000 buys you an ok TV ad. $75K buys you a poor TV ad. Silk purse, sows ear.
Some clients are also on the take. They will say, “Is it ok if I bring partner on the shoot to Paris/Australia/South Africa?” And it’s just accepted that that will happen. Others will also ask for brown envelopes from the Agency.
It’s a bizarre system that is hurting the work.
If people stopped being so greedy they’d get better advertising. And the work would perform better. And as a result maybe they would get bigger bonuses because their companies’ sales would be better. Does anyone think long-term any more?
This issue is not unique to Vietnam. It’s happening in other markets too such as Indonesia and Thailand.
Even in Singapore it goes on too I’m told, although in a more discrete way. Extra things added to the production budget that don’t actually exist, other things mysteriously marked up. The extra cash comes in and is then siphoned out ‘creatively’.
Some say it’s just an “Asian thing” where people are used to giving backhanders to get business. Some Agencies will also do that to secure clients. I’ve been in situations before where we’ve lost a pitch and you know damn well that the other agency has pushed a fat envelope over to win the client.
I’ve spoken to EPs who own production houses. They’ve said “you’ll never win on this one, it’ll never stop – because it’s they way business works here.” When I asked why they didn’t plough as much as they possibly could into making the work great, they also responded that “No one cares about quality. Clients don’t know the difference between good and bad anyway.”
Really? Come on, guys. Vietnam won two Lions from 89 entries at Cannes this year. Perhaps that number would be higher if the rot stopped. And maybe Asia as a whole would be seen as less corrupt if this truly became an unacceptable way to ‘do business’.
One day I’ll leave Vietnam. I just hope that in the meantime, the corruption will reduce but I can’t see it ever going away. I just appeal to all agencies for more transparency, less greed. It hurts the work – the only thing we should believe in.
- Have you got a confession? We’ll protect your anonymity – email robin.hicks@mumbrella.asia.com
There is not a single country in the world that is not corrupt in some way shape or form. Changing the cultural habit of backhanding will not make the work better, better concepts and ideas make the work better. Quit whinging about low costs and start presenting ideas that make your client’s famous.
I’m sure when you leave Vietnam and travel back to your home country, if you do some in depth research you’ll see that the backhanders are there but disguised in a different way.
ReplyI think no visitor will ever understand truly what happens in SEA markets, behind the scenes.
And as much goes on behind each project between agency and client – as it does when it gets to production houses.
Agreed no long term vision, but the new generation have their own partners, trusted teams and ways of business.
ReplyI wonder how WPP etc survive in this market.
They make every employee undergo an ethics course…where such practices are expressly forbidden.
Maybe it’s all just for show.
ReplyNailed it .
At a certain point , gratuity turns into thievery . The author (bravely) painted a very exacting picture , right down to the personal details . For a country that is exploding into consumerism , its a shame that money being invested by clients in marketing and advertising , is being skimmed heavily by those entrusted to spend it.
Its called , theft .
ReplyJust be like Hillary….rant against corruption, wall street and corporate control of government….then go ahead and do exactly that.
Seems to be a global trend.
Even CCOs do it these days….criticise scam in public, then go and do it anyway.
Reply“Really? Come on, guys. Vietnam won two Lions from 89 entries at Cannes this year. Perhaps that number would be higher if the rot stopped.”
Wrong – they just gave them back for false case claims!
Reply@ Judge
The clients are taking their share at the beginning of the process also. As for WPP and other networks, its all lip service.
Baksheesh everywhere, in every industry and profession in SEA. Just more blatant than the west.
ReplyIt happens. From Vietnam to Singapore. Why does mumbrella not do a confessional piece from the end of the food chain – the production houses?
ReplyEnd of the food chain?
ReplyThat is still the post production house.
They receive the smallest piece of pie.
Agreed yoyo. And there are stories you hear about those kickbacks happening with VFX companies as well. And they’re not restricted to SEA companies either.
ReplyI have run a WPP network in a few SEA countries (one of which is Vietnam) and I can assure you that it’s not just “lip service” about anti-bribery and corruption. I’m not saying it doesn’t happen but if I’d ever found out about it (which I didn’t), that person would have been out on their ear quicker than they would have been counting their cash.
I also fostered a strong relationship with the production companies even though I wasn’t hands on and always told them that if anyone from my organisation (or clients) asked for something I was to be told immediately.
I never heard a word.
ReplyI have had conversations with a new WPP agency CEO in Jakarta who told me that finding ways to grow the business without embracing the graft culture was almost impossible…so they had to find ways to work around it…i never pressed him on what that meant.
In any case, if there is collusion between both agency producer and production house, any hanky panky becomes twice as hard to detect.
ReplyHonestly speaking, if you are not taking advantage of this cultural way of doing business you’re nuts. In the US, you’d be presented with a new set of clubs, in Vietnam you get cash. Same, same but different. I’ve subsidised many vacations this way. I’m not ashamed. Embrace it and live life guys.
ReplyThe Government plays a big role in this culture in Viet Nam. They control a lot of things, a lot of media, and a lot of clients. You have to scratch their back if you want them to scratch yours. It’s not so unfair if everyone plays by the same rules, no matter how corrupt they may see out of context to an outsider.
Scratch away.
ReplyMai Thao : is an old Vietnamese saying : take what you can for the future .
Replyvanezzher ; Dutch saying for under the table deal
ReplyThose two Lions Vietnam won were as a result of scam and Ogilvy had to give them back. Hahahahahah!
But honestly even if you’re one of the non-takers in this, and everyone is doing it and getting money from it — it just boils down to your own personal interpretation of integrity and ethics. What is your integrity and ethical values worth to you personally? And in a market like Vietnam where it’s considered normal “Mai Thao” is that even considered unethical or are we imposing Western ethics on a country for which we’re not even qualified to pass judgement (expats)? It’s a very interesting debate but global agencies have strong viewpoints on this so it seems if the mandate from Western HQ has already been set, then that’s how you need to abide by. So what i’m seeing is a lot of Vietnamese CD’s leaving these agencies to run their own shops where they’re free to live by their own ethics.
ReplyThe “oh so brave anonymous” Creative director says it like that’s how it is and no other way… It’s very narrow-minded and just shows how ignorant he really is.
Yes it happens, yes it’s an issue, but not limited to Vietnam. He can live in his bubble of the expat that knows best and Vietnamese people are all the same and all crooks.
You are welcome to leave Vietnam and go live in a country where people hide it better.
Let’s not make the dealing of a greedy few the general rule. Or maybe you think all muslims are terrorists, sorry a little irrelevant but same logic.
Replyquite unbelievable that last comment , stealing is stealing regardless of which country it happens in . how ever you seem quite ok with it …. how would you feel if you paid a designer good money to design and build your own personal home , and a budget to do so . then after you move in find out he only used half your money to build it and kept the rest and never told you …. on top of what you paid him as professional fees . would you be ok with that ? your million dollar home is only worth a few hundred , and the person you trusted to make the million dollar home just lined their pockets with your money
interesting to see how you fair with that
the article serves to point out that scale of theft , and frequency ,is reaching unsustainable levels , and the final product is suffering so bad , it’s becoming to harm the entire industry in terms of finance , and quality . for sake of those in the industry , a long lunch , or a day at the golf course is a more mature and sound gratuity that leads to the economy of the industry growing .
ReplyLooks like somebody completely misunderstood the point, the person writing the original article is saying that this is happening in ALL the jobs shot in Vietnam. In reality it’s probably a much smaller percentage than everyone thinks. Generalising it is just simply silly and if you have worked anywhere else in the world you would know that IT HAPPENS TOO!!
So get off our high horses, you are the ones harming the industry by making people think that if you shoot in Vietnam you will get ripped off, leading to taking jobs overseas and THEN, HARMING THE INDUSTRY
ReplyMai Thao : love it ! when in Rome , or Europe for that matter .
ReplyGet out of the business if you are only winning 1 out of 10 jobs. Something seriously wrong with your skill sets. Don’t blame every other agency out there.
ReplyWhen did the opinion of one individual warrant an article that generalises an entire country. Please talk to more than one source and you’ll know the truth about this market. Not from one jaded individual.
ReplyThe WPP senior executive commenting above knows very well that NO production house would discuss corruption by WPP staff with him/her, as this would mean a swift end to jobs from WPP. I’m not sure what else can be done to prevent gifting culture, but if major agency groups really want a clean conscience (not just pretend to have a clean conscience) they need to take a more proactive approach – rooting out corruption – rather than just running anti-corruption training and then shutting their eyes. The people who are taking money are very clear to everyone within the system, but it suits most people – including major agency group management – to leave them in position, as they are not only top personal earners, they are big earners for the agency. Also, the reductionist argument that some make that all markets are corrupt is rubbish. All markets ARE corrupt, but some are more corrupt than others. This is perfectly clear to anyone with a brain. Source: I have worked agency and supplier side across multiple SEA markets, including Vietnam.
ReplyHave your say