In September 2020, Google announced that they would be charging specific fees for serving ads in certain countries from November 1st 2020.
These “Regulatory Operating Costs” or DST fees will be charged in addition to your advertising costs when you serve an ad in specific countries. This a direct response to the newly imposed digital services tax introduced by certain country’s governments. These fees do vary per country and from Google’s perspective are associated with the new costs of doing business in these countries. The countries affected and the associated costs are below:
- United Kingdom = 2%
- Austria = 5%
- Turkey = 5%
Why have Google done this? The Governments of the above-named countries have imposed a “Digital Services Tax” on digital businesses, including search engines which started on the 1st April 2020. Unfortunately, Google have now passed these additional costs onto the advertiser.
Full details on the UK’s digital services tax can be viewed via this link.
These additional costs do not affect the CPC you pay or anything related to any bids in the Google Ads auction. The additional cost, whatever that may well be added to the advertisers’ invoice.
For example, if you are a UK advertiser who spent £1,000 on clicks for the month of November, your DST fee from Google would be 2% of that, which is £20. That would make your final invoice (exclusive of VAT) £1,020.
If you do feel that these fees will affect the overall profitability of your advertising, then please do get in touch with your account manager (Mabo Clients Only) and we can help you with this. Our Google representatives have also offered to help our clients with any advice on this.
For further information on this announcement from Google, please visit this link.