The Mumbrella confessional: How corruption in Vietnam’s commercials production industry is hurting the work

Vendetta or anonymous mask. High quality vector. Eyes are hollow - transparent.

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

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