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Google, Amazon pass on UK Digital Services Tax by hiking ad prices, fees at same rate the government takes

Anonymous Coward
Anonymous Coward

> And you’ll probably end up paying, too, because advertisers build the cost of ads into the prices they charge for their goods and services. Now that the cost to advertise beer, bread, bacon and any other commodity on Google just rose, brands will surely pass on their extra costs rather than wear the pain on their own bottom line. Just as Google has chosen to do.

Well no, not really. "Brands" don't spend whatever it takes to place n thousand ads on Google. They have an advertising budget measured in dollars(/etc.), which they try to spend wherever seems to get them the best return. But since this affects all customers equally within a region, and AIUI ads are priced by auction, the fee will likely be absorbed into the earlier price, and I can see the advertising effectiveness per currency-unit not changing much in real terms.

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