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The start of November marks the introduction of Google Ads’ new country-specific fees, which means any advertiser within the UK will see a 2% Digital Servicing Tax (DST) Fee added to their monthly invoice. For brands around the world, this means that digital marketing costs are set to increase once again. While there is no way to escape the fee itself, it’s important for advertisers to understand what the new fee means – and how they can do their best to mitigate the costs.
So what are Google’s Country-Specific Fees?
The new country-specific fees are a direct response to the introduction of DST or Regulatory Operating Costs. These taxes are levied on to brands who advertise online in the UK, Turkey and Austria. Google automatically calculates the fees based on the number of impressions or clicks that are served within a country where these fees are applicable.
To conceptualise this, consider a brand running ads in the UK. With the new fees, an ad spend of £100 would be subject to a 2% DST fee. This takes the total cost up to £102 before VAT. However, we should note that if a brand is running ads across different jurisdictions, only those ads which are served in countries with these taxes will be subject to the new fees.
What’s the Impact?
Unfortunately, these fees are a mandatory cost increase for brands and are set to impact advertising budgets worldwide. Not only will costs increase, but it’s also likely that this move will reduce the reach and visibility of campaigns as brands are forced to re-evaluate their budgets accordingly.
With no way around the fees, businesses need to refine and amend their campaign spend accordingly. There are three ways in which you can do this; switching to Performance Based Advertising, improving your Site Ranking (SEO), and Optimising your Keyword Spend.
1 – Performance Based Advertising
Working with an agency isn’t exactly risk free, KPI’s aren’t always guaranteed but fees definitely are. Businesses need the reassurance of performance, but can’t necessarily afford to foot the bill if targets aren’t met. The introduction of the new Google Fees, and the subsequent increase in expenditure will only heighten this fear of being out-of-pocket.
One way brands can avoid wasted spend is through performance based advertising. Performance Advertising tends to operate on a Cost Per Action (CPA) structure, and is a risk-free way for brands to advertise and sell online – the agency fronts the media spend and only takes commission once results are delivered. This structure incentivises the agency to drive the best results, helping businesses succeed, which in turn reduces wasted ad spend and optimises their budget. NMPi can offer these performance based services in Paid Search, Google Shopping, Programmatic Display, and Paid Social – allowing our clients a full scope of potential across their entire advertising landscape, whilst waiving the management and technical charges.
With the periodic introduction of Google taxes, such as these 2% DST fees, it’s imperative that brands remain on-top of their budget management – NMPi can help businesses reach their acquisition targets and maximise their return on investment without breaking the bank. Find out how NMPi can optimise your ad spend here.
2 – Site Ranking (SEO)
Google’s new taxes are coming at a time when the majority of advertisers are already feeling the impact of uncertain economic times. With an additional 2% being added to an already hefty marketing bill, brands need to ask themselves, whether it’s worth investing as heavily as they are in paid media? One way brands can optimise their budget and cut costs is through the exploration of previously deprioritised areas – such as organic search and the user experience. Optimising your site ranking through SEO, allows advertisers to achieve a top spot in search engine rankings, at a fraction of the cost of a monthly paid media campaign which in turn, can significantly impact your performance and revenue.
Paid media is a steadily burgeoning industry, and as the prices continue to rise, businesses should take the time to refine their organic position and gain a top spot on the SERP. Channelling some of your paid budget into SEO and the user experience ultimately provides your site with quality content, boosting your position on the SERP and ultimately generating more traffic to your site. NMPi can provide clients with a comprehensive and integrated strategy to ensure SEO success and maximise the power of your organic coverage. For more information on how NMPi can improve your site ranking visit our website.
3 – Optimising Keyword Spend
Paid search advertising expenditure currently accounts for 54.1% of total digital media spend globally, yet still brands struggle to comprehend the relationship between their organic and paid coverage. To date, approximately $332 billion is spent on paid advertising, and without understanding the true value of search, one has to wonder what percentage of that is unnecessary spend.
As costs go up, brands need to keep their outgoings low, and one way to optimise budget spend is to refine and reduce spend on keywords that one already has high organic coverage for. Identifying exactly how much their paid strategy cannibalises their organic strategy, allows businesses to tailor their bids, optimise content and maintain a dominant position on the SERP – without wasting budget.
Brands can optimise their keyword spend via Incubeta’s search management platform, Seamless Search. Using Seamless Search, businesses can assess thousands of internal and external factors that impact the correlation between their paid and organic search, determining the true value of each channel and how they’re impacting business performance metrics. Thereby reducing unnecessary bid spend, and increasing brand revenue. Join our waiting list to find out how you can optimise ad spend via Seamless Search.
There’s no denying that the new Google fees will eat into the advertising budget, however – with a little under a month until it comes into action – now is the time to optimise your ad spend. For more information on how to refine your expenditure, and get in prime position for Q4 visit NMPi, and get in touch.
This post was originally published on Incubeta’s Blog