New advertising rates for Google
As of November 1, 2020, Google will charge an additional invoice fee for ads served through Google Ads in the UK, Austria and Turkey. These rates will be applied to your December bill.
Here are the fees that Google adds for ads in each country:
- United Kingdom: 2%.
- Austria: 5%.
- Turkey: 5%.
In the case of Austria and the United Kingdom, the new rate is based on the recent tax on digital services that is applied in those countries. And in the case of Turkey, it is added due to the significant increase in complexity and cost to comply with the regulations of the country's advertising market.
Similar taxes in other countries have not been announced.
How, when and where are these fees applied?
- They apply to ads made from the Google Ads platform: Google Search Network, Google Display Network, Google Hotel Ads.
- They will be included in your invoice or statement from December 2020. They will also appear in the "transactions" section of your Google Ads account. That amount will be added to any taxes that apply in your country, such as sales tax.
- If you pay by monthly billing or have the automatic payments option activated, the new rates will be added to your account budget. For example, if you have a budget of € 100 and accumulate € 5 of digital services tax fees for ads published in Austria, you will be billed a total of € 105.
- If you make manual payments, you may be charged these fees once the payment amount has been used. This situation would leave an outstanding balance, which will be automatically deducted from your next payment. For example, if you accumulate € 5 of regulatory costs of operations for ads published in Turkey and make a new payment of € 100, you will see an available balance of € 95 to invest in ads (€ 100 - € 5).
How do the new rates affect the dashboards of the Google Ads platform?
Dashboards will not change. The CPC (cost per click) or CPC (cost per conversion) calculations shown in the dashboards of your Google Ads account will only show the investment, without applying the additional Google fees.
How do the new rates affect my Google Ads budget planning?
To maintain your advertising investment, you will have to increase your Google budget by a percentage equivalent to the rate applied by Google for each country.
For example, in the UK, to maintain an investment of € 1,000, you must allocate a budget of € 1,020 (additional 2%).
You can also keep the same budget, reducing your real investment in advertising by 2%. In this case, an initial budget of € 1,000 would be € 980. Although it may seem residual, this € 20 reduction in investment can have significant negative effects on CPA and ROI. Those € 20 could generate a return of € 200.
It is also important to note that Google Ads algorithms work better with large amounts of data. For this reason, in certain cases, at Roiback we apply the same campaign to different countries that share a language - for example Germany and Austria. This allows us to optimize campaigns and achieve better conversion results in sales and costs per acquisition.
At Roiback, we will keep you informed of any news about Google rates. For any questions, please contact your Direct Channel Specialist.