Digital Service Tax to be added to Google Ads fees – how will it affect my PPC costs?
November 2020 sees Google adding a DST fee to invoices or statements for ads served in specific countries, including the UK to cover the Digital Service Tax being imposed on them.
Ads served in the United Kingdom will be subject to a 2% UK DST Fee and in some cases, this may also be subject to VAT. A more complete description of the fees can be found here.
Many advertisers are therefore having to take another look at how profitable their PPC advertising is and if the ROAS can cope with the imminent increase in costs.
Google has already told advertisers that the “budgets” that they set in their Google Ads accounts will not include this fee and so advertisers will need to have taken this into account before instructing their Digital Marketing Management Team on the budgets set or they could find that their invoices will be higher than expected and profits lower.
While not a welcome increase in costs the changes are causing many advertisers to review and audit their PPC accounts, which could lead to significant improvements and ROI, some even to outsource the management of the accounts ahead of the changes in an effort to get the profit levels higher before the costs increase.
If you are unsure of how the changes will affect you and your costs, or you would like your PPC account to be reviewed and optimised to increase your ROAS have a chat with our team, whether its a fresh pair of eyes over your account with recommendations for your team to implement or its a long overdue handing over a campaign to be managed to increase revenue we are here to help.