Have you noticed your Google Adwords spend automatically increase in the last few days and wondered why?

You may not have been aware but as of the 1st November Google automatically passed on 2% digital services tax (DST) to the advertiser.
See this link for details: Google Support (As of November 1, 2020, a 2% UK DST Fee will be added to your next invoice or statement for ads served in the United Kingdom.’)

The government slapped a DST tax on applicable companies like search engines, social media services and online marketplaces like Amazon who have already passed this DST onto advertisers (see this link for details: Digital Services Tax) so Google have announced that UK users of the Google Ads platform will incur an extra 2% charge on spending, in the form of a Digital Services Tax (DST) fee. This also applies to other countries like Austria but at 5%.  I’m sure you think that 2% is bad as this could cost you an additional £40 on a £2,000 spend (it would be £100 in Austria). 

How is this charged?

Your Google Adwords campaign will run exactly the same is it was before, however, at the end of every month you will see an extra line on your invoice with the DST.  So luckily it will not affect your cost per clicks or click through rates. The additional 2% DST fee will be shown on a separate line in your invoice from your overall campaign spend. However, this means your total invoice could be 2% over your current budget.

What are the first steps to take?

As this will take your spending 2% over your budget you need to decide whether to decrease your budget which will mean fewer clicks through to your website or take the DST hit and lower your ROI.

How can we help?

We have experience in taking Google Adwords campaigns, carrying out an evaluation and identifying areas where money can be saved without affecting efficiency.  As an example, a number of campaigns run ‘broad match’ keywords that if not properly managed can serve a number of irrelevant keywords that have no chance of generating enquiries or orders.

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