Maryland is the first state to pass a digital ads tax, but if the tax holds up to legal challenges, it may be joined by more states looking to rein in big tech companies while bolstering their public funds. The thing is, similar taxes already exist in the UK, Austria, Turkey and other countries. And in some of those countries, even though companies like Google and Amazon are the ones getting taxed, they've passed on these taxes directly to their own customers, the advertisers. Feels wrong, doesn't it? The PPC pros we spoke to in the UK and Germany felt the same way. Advertisers in those countries have pretty much resigned themselves to paying the 2-5% additional cost passed onto them, explaining that, while some have had to adjust their budgets a bit, these fees didn't have a considerable impact. In Maryland, though, the platforms will be taxed up to 10%. It's still unclear whether Facebook, Google, Amazon and Microsoft intend to pass that entire amount down to advertisers, but assessing the implementation of digital ads taxes in Europe, along with how marketers in those regions have adapted to them, can help domestic advertisers prepare should these taxes begin to show up in more states. First, you'll want to explicitly communicate the change with your clients so that they know where their money is going and can decide where it's best spent moving forward. You'll also want to budget accordingly: "We now have to factor this in when budgeting for advertising, which is another proportion of spend that doesn't go directly into media," said digital marketing manager Azeem Ahmad, suggesting that advertisers who've already budgeted out their spend for the year shave off a small percentage to see how their forecasted metrics change. And, it may be prudent to assess the overall landscape — the platforms may differ in how they handle the tax (Facebook didn't pass the UK tax onto advertisers, while Amazon and Google did), but a 2.5–10% tax on all the major platforms may make other channels more viable by comparison. Read more here. |