HO CHI MINH CITY: An economic slowdown and new regulations are exerting a dramatic impact on the outdoor advertising industry in Vietnam.

According to Nguyen Quy Cap, chair of the Ho Chi Minh City Advertisement Association, good economic times have seen brands spend around $1bn a year on ads in Vietnam, of which roughly 10% went to outdoor.

But, thanks to a period of fiscal cooling, revenue from billboards plummeted by 40% year on year in the first half of 2014, he told Vietnamnet, prompting site owners to slash their fees to attract custom.

The economic outlook for the second half of the year is unlikely to bring any respite, while the sector's problems may be compounded by new rules requiring that billboards be set back at least five metres from the roadside.

Cap observed that few streets in Ho Chi Minh City, for example, had pavements wide enough to comply with that stipulation, and added that his organisation had asked the city's authorities to reconsider.

"If the regulation cannot be amended, the number of outdoor billboards in the city will be cut by 50% because they cannot meet the standards," he warned.

Vietnamnet noted that many riverside billboards, once considered to be Ho Chi Minh City's prime outdoor advertising sites, had been empty for the past year.

It also quoted the director of an advertising firm as saying clients were reluctant to commit to long-term contracts, meaning outdoor advertising was increasingly dominated by consumer goods brands running short-term sales campaigns.

Data sourced from Vietnamnet, Tuoi Tre News; additional content by Warc staff