Facebook As A Marketing Channel And Taxes Levied On Ad Purchases

in money •  7 years ago  (edited)

With almost 2 Billion people using Facebook, any serious marketer cannot ignore it as a way to reach people.

Facebook uniquely allows advertisers to narrowly target an audience so that an ad campaign is like a sniper shot rather than a shotgun blast, as is the case with other advertising networks.

Ads are a lot cheaper too. There's no bidding on keywords (like with Adwords), constantly driving up ad costs. Ads are charged per impression, but the cost per impression is based on a number of factors including a viewer's age and gender, where they live, what their interests are, how relevant your ad is deemed to be to that audience, and more. How many impressions you get depends on your daily ad budget and the cost of those impressions.

You can see your up-front costs in Facebook's Ad Manager and track how your ads are performing.

However, if you live in the European Union, then VAT (sales tax) is levied on ad purchases. The rules depend on where you live in the EU and if you're buying ads in a personal or business capacity.

Unless you live in Ireland.

In which case, VAT is always levied on your ad spends.

To the tune of 23%!

And that tax is not reflected in the figures displayed in the Facebook Ad Manager. It's under-reporting ad costs by not including the tax amount.

So manual calculations have to be continuously performed to see what the true ad costs are.

What's more, the VAT levied is not included on the invoices Facebook mail out. You have to click the "See Full Receipt" button in the email to go to the online invoice where the tax amount is shown in small grey text.

Anyone in the EU, and especially Ireland, needs to be aware that their ad budgets need to be increased by almost a quarter to cater for the additional tax, or reduced significantly so that the tax payments can come out of a pre-existing budget.

Not exactly business friendly.

It's all detailed on this Facebook page:

https://www.facebook.com/business/help/133076073434794

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!