Why New Businesses Usually Fail with Social Advertising in Vietnam

Why New Businesses Usually Fail with Social Advertising in Vietnam

The advent of social media gives small businesses and individual sellers a huge opportunity to scale their ideas without the threat of suppression from giants. However, now it is no longer 2017 when everything was new. The digital market is now very competitive, you have to make sure you know your customer and win the bidding.

Before and After 2017

For those familiar with the current digital marketing landscape in Vietnam, you may proceed directly to the next part, now let's make a comparative analysis of 2017 versus 2023. The years 2014 -2017 are crucial in marking the rise of Facebook in Vietnam, following a period of government restrictions due to sensitive content concerns in the period from 2012s. Facebook subsequently emerged as the dominant social network, overtaking Yahoo.
This period, particularly between 2015 and 2018, was golden for entrepreneurs using Facebook for sales, with 2017 being notably lucrative. Marketers innovatively engaged with potential customers through ad comments and messages, and converted these interactions into sales. Consumers showed a preference for direct communication before purchases because of widespread unfamiliarity with e-commerce platforms. My personal experience during this time was managing a campaign for a home appliance retailer. We capitalized on a product sourced from Alibaba, It's a folding wardrobe, and achieved monthly sales of 800 million VND, mainly through comment-based advertising. The revenue is only from 1 product, I didn't count the total sale revenue affected by traffic and up-sell/cross-sell.
About ads metric, in 2017, the cost per thousand impressions (CPM) for home enthusiasts was approximately USD 2-3, which contrasts sharply with the USD 4-6 range in 2023 in the Vietnamese market - a near doubling, you can also check in Statista. This escalation in advertising costs, despite the user base growing from 46 million in 2017 to 70 million in 2023, is attributed to the increased competition among advertisers (Source: Digital Report). The principle of the ad auction is that it doesn't matter what product Mr. A and Mr. B sell, as long as they target the same customer file, they have to bid for the right to display ads. The more ads participating in the auction, the higher the price. Despite Facebook's efforts to integrate more ads by reducing the ratio of organic posts to ads, the increased frequency of ads has not led to a decrease in costs. Instead of seeing an ad for every 7 organic posts (posts from friends, liked pages, recommended pages) in 2017, you now see ads for less than every 3-5 organic posts. Ads appear in more positions, in general, the ad frequency is extremely dense.
Understanding this background is crucial, particularly for SME advertisers, you know ad fees are increasing by the day, so you have to be a good captain to overcome this storm. The following discussion will show 5 reasons why SMEs usually fail with social media advertising, this article requires a foundational understanding of digital marketing, and I recommend familiarizing yourself with the basic concepts if you are new to the field.

1. Inefficient Campaign Structure

A common pitfall for marketers with under a year of experience is creating ad sets for each post or creative, leading to excessive spending without a focused strategy or audience. You have to follow the structure, what's the audience or idea you want to test?
If you want to test ads for people who love households, you need to combine all of the ads for that audience into the same text and let the system optimize. It's what people call A/B testing. IT will help you to reduce ad spend.
Similar to ad groups, I have usually seen people combine all the ad groups into 1 campaign and start to optimize it. No, you need to serve your Facebook account and pixel like a baby. They didn't know anything before you taught them, and you have to teach them right. Re-targeting audience and broad audience cannot be in the same campaign, similar to add-to-cart ad group and conversion group.
Besides, the importance of systematic naming within ad accounts is often overlooked. Organized naming conventions facilitate easier data retrieval, which is essential for analysis and future investment discussions.
Common mistakes among digital marketers. Imagine at the end of the year, you want to summarize the activities of the ad for the next strategy. How can you find the solution from 1,000 campaigns with 1,000 posts?
Common mistakes among digital marketers. Imagine at the end of the year, you want to summarize the activities of the ad for the next strategy. How can you find the solution from 1,000 campaigns with 1,000 posts?
Same purpose, same campaign
Same purpose, same campaign

2. Excessive Ad Duplication

The duplication strategy is designed to replicate an advertiser’s best-performing ad sets - not just to multiply the success of the first ad set, but to make the duplicates even more successful because they are treated as ‘brand new’ by Facebook’s algorithm.
But if both ads are running at the same time and targeting the same audience, there is the potential for them to compete with each other.
Without a coherent campaign structure, there's a tendency to duplicate ads indiscriminately, you cannot control the overlap in your ad account, and you are killing your own money.

3. Not knowing their numbers

90% of business owners in our survey did not have performance dashboards in place. How do you know your customer behavior and lifecycle if you only look at your daily ROAS on your ad account?
How do you know how much ad budget you are allocating to new and returning customers? Your AOV? Your CVR? If your customers have a 3-day consideration period, what would you do for your poor performance today?
Don't be destroyed by what you don't know. A clear dashboard like Looker Studio or Power BI will help you understand your data and your customers so you can take the right action quickly.
Example of Dashboard
Example of Dashboard

4. No pricing strategy

Does your business have a lure product? How do you set up your promotion?
It will depend on your understanding of your customers and products to set the discount range.
For example, I used to run a sportswear store. I understood that my customers go to the gym every day. So instead of giving a big discount per product, I encouraged them to "buy more, save more". On the one hand, I sacrifice the profit per product. On the other hand, I increase the customer lifetime value and increase the visibility of the products in the market to leverage the impact of word-of-mouth marketing.
As a result, although each shirt I sell costs only 109,000 VND (4.5 USD), the average value per customer I record each month is 400,000 VND (16 USD). In addition, I give customers who buy more than 3 products a 10% coupon for the second purchase, which they can give to anyone who uses it. As a result, revenue from returning customers increased by 20%/month. The number of new customers introduced by word of mouth always accounts for 5% of sales in peak months.
Understand your customers and your merchandise to develop a long-term pricing strategy. The cost of retaining old customers is always very low, so if you have to pay more for new customers, don't hesitate if you believe you have a good customer care strategy.

5. Lack of Customer Relationship Management system (CRM)

With the rise of online marketplaces like Shopee, Lazada, and TikTok, a notable trend has emerged where new businesses rely heavily on these platforms without developing their own channels. It's essential to highlight the importance of establishing your own platform for businesses aiming for long-term growth and sustainability. While using these popular marketplaces provides immediate access to a vast customer base and simplifies the sales process, exclusive dependence on them can pose significant risks. These include potential changes to marketplace policies, fee structures, or even the marketplace presence over time. Building a dedicated platform not only provides businesses with full control over their customer experience, branding and data, but also mitigates the risk of over-reliance on third-party platforms. It's a strategic move that, although demanding in terms of initial investment and effort, pays dividends in establishing a resilient and self-sustaining business model for the future.
The marketplace can help you increase your sales. But your own CRM will help you to know exactly who and where your customer is. Again, everyone knows that a customer-centric approach is extremely important, but they are lazy or they forget to ask their customers about their feelings or expectations. Large companies spend a large budget on their customer survey every 1 to 3 months to improve their product or service.
There are so many golden nuggets in conducting surveys such as increasing brand awareness, brand trust, customer lifetime value, and product improvement. Remember, we are not customers. Don't be silly to think that we understand all their thoughts without a survey.


The journey to mastering social advertising is fraught with challenges, yet understanding these five key areas can significantly improve a new business's chances of success. Continuous learning, customer-centric approaches, and the strategic use of technology are essential tools in this endeavor. By addressing these areas, startups can build a solid foundation for sustainable growth and market penetration.
In the next part, we will talk about the digital strategy to win the market for SMEs.