The new Google Ad tax: what you need to know.
Before you panic – let’s talk about why, how, and when the Google Ad Tax is going to happen.
Earlier this week, Google announced there would be a new ‘tax’ added to an advertisers ad spend. This isn’t worldwide yet, but if you are in the UK, Austria, or Turkey, you will be affected.
The tax is a response to individual governments taxing digital marketing services. Currently, this only includes search engines and social media, but it could change in the future.
Most companies will have to accept the 2% tax on their advertising on top of their current ad spend. If you are unable to do this, you can adjust your ad spend accordingly to make room for the 2% Google Ad Tax in your budgets. Make sure you aren’t going massively over your budgets!
Remember, if you are using retargeting across your campaigns and showing ads to people in the UK, Austria, or Turkey – you will also be charged as the impressions/clicks you get from this audience will count through the new tax conditions.
The easiest way to check you are exempt from this is to check a geo-report on a recent campaign or time period to see where your ads are showing. This could mean a big fee to those spending big budgets on targeting UK audiences.
Taxes similar to this have been in place for a few months already. Amazon added a tax to sellers on their platform in August and we’re sure this isn’t the last we will see either.
Social media giants are bound to follow suit, particularly Facebook, Instagram, TikTok, Twitter, and LinkedIn, and not forgetting Microsoft.
The Google Tax begins on the 1st of November. That means if you have any ads showing to anyone in Austria, Turkey, or the UK, you will start being charged a tax on top of any ad spend you may have. The fees are as follows and vary by country:
Check your campaigns!
You can check the geo-location settings on a recent campaign to make sure you aren’t trying to advertise to audiences in the UK, Austria, and Turkey. If you are, make sure you are setting budgets bearing this new information in mind.
It’s not the best news for advertisers, especially as we all seem to give so much money to Google already. But our advice is to make sure you keep an eye on your results and spend, and give us a call if you have any questions.
Alternatively, check out our ppc management services for expert support.