Advertising on Facebook and Google is about to become a lot more expensive

Written by Nathan Jolly on 22nd May, 2018
Advertising on Facebook and Google is about to become a lot more expensive

A new “digital tax” on Google, Facebook and other such digital media companies looks likely to hike the prices of digital advertising in Australia.

Treasurer Scott Morrison has confirmed such a tax will be happening, pending a Senate vote.

Centre Alliance senator Stirling Griff holds one of the two deciding Senate votes needed to make this happen. He seems excited, saying his party was 100% behind “a digital economy tax proposal”, explaining, “If the digital economy tax makes the government coffers swell more than they do now, that is very much a positive step.”

Another positive step (not in the least for companies such as our own) is it will drive advertisers to publishers rather than platforms like Facebook. Companies who work with clients, create related content, and use existing audiences to push a message – or a banner ad with a click-through link.

Especially because this tax is very unlikely to be worn by the likes of Facebook anyway.

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You cannot outrun the ads

While SMH cheerily report that it “would be up to the digital company to decide whether that levy was passed on to the advertiser”, comparing the levy to our GST, this is clearly going to be the case.

The thing about the GST being introduced, was that the cost of goods and services simply went up to cover the 10% levy.

The idea of heavier taxation for such digital companies makes sense, and seems fair, until you take into account that they will simply charge more for advertising on their platforms. Or charge the same, but limit the reach of such ads, meaning you eventually spend more to hit the same amount of people anyway.

Either way, this could be a major blow for the future of Facebook advertising and the like.

With all that in mind, a full-page colour ad in a newspaper you can pick up and touch sounds priceless right about now, yeah?

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The article was originally published on The Industry Observer