UK government to hit Facebook, Google and Amazon with digital services tax
The government will soon impose a ‘digital services tax’ on UK revenues generated by “established tech giants” like Facebook, Google and Amazon.
The 2% levy was announced by chancellor Philip Hammond in the Autumn budget today (29 October). It will come into force in 2020 following a period of consultation.
The announcement follows on from heavy criticism about the amount of tax tech behemoths pay to the treasury. In most instances they are gleaned from ad revenues – in comparison to their UK profit.
How much tax do tech giants pay?
Facebook UK revenues: £1.26bn Tax: £15.8m (2017)
Amazon UK revenues: £72m Tax: £4.5m (2017)
Google UK revenues: £1bn Tax: £36.4m (2016)
Snapchat UK revenues: £26m Tax: £360K (15 months to Dec 2016)
Twitter UK revenues: £76m Tax: £1.2m (2015)
Without going into detail, Hammond said the levy wouldn’t apply to “small UK startups.” But instead be targeted at profitable digital services companies that generate “at least £500m a year in global revenue”.
Kill or cure?
Ahead of the announcement, IAB chief executive Jon Mew argued that such a levy risked harming the UK digital ad market.
“While the government has said it wants to focus new measures on larger businesses, it would be difficult to avoid collateral damage across the sector and a negative effect on competition,” Mew warned.
“A tax on revenue would create a disincentive for competitors to set up and grow in the UK market. And would impact on mid-market players who drive competition and provide choice.”
Mew suggested that if the government was truly committed to leading the charge on innovation-friendly regulation that supports the growth of the tech sector then it should focus on supporting efforts to accelerate the EU Commission and OECD process to agree to an international approach to digital taxation.
Source: The Drum
How are students are using technology?
What technologies are students using in 2018, and for what purpose?
Smartphones and students are more inseparable than ever in 2018, with average daily usage as high as 5.6 hours.
Across the 11,500 students asked during the UCAS Media student lifestyle there was 99% ownership
The most popular usage (74%) is for messaging friends and family, followed by 54% usage for social media.
Just 4% of students use their smartphone for shopping.
Tablets are yet to become a staple in the student lifestyle, owned by less than half of students.
Used just 2.6 hours per day on average, tablets appear to be more aligned to entertainment than laptops and smartphones. The most popular use was streaming video (45%), closely followed by playing games (43%).
One key point to make is that among students who own tablets, almost a quarter use them for online shopping. Compared to the 4% who use their smartphone for the same activity.
Laptops are owned almost as exclusively as smartphones, with 98% of students having one to hand.
While used less than smartphones – at 3.8 hours on average per day – laptops were the primary device used for online shopping.
Desktop PCs, perhaps due to being fixtures of most university libraries and study areas, still command 3.9 hours from students each day, and are also more popular for online purchases than smartphones or tablets.
This distinction between the devices students are using to make online purchases is indicative of a multi-device shopping experience.
Research published earlier this year shows that the vast majority of online shoppers are using a combination of devices, but the wider marketplace has already made the shift to a mobile-first purchase experience.
Perhaps students have more faith in their laptop’s security than that of their smartphone, but for now, it’s a clear message that laptops and desktops are the drivers of student online purchasing.
Source: UCAS Media
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More than half of adspend goes digital in 2015!
In 2015 it is predicted that the UK will be ranked the first country in the world to spend more than half of budgets on digital media.
Research conducted by market services company WPP has forecast that for the first time every for every £2 advertising spend; the UK will be spending £1 on digital media! The total ad spend figures for 2015 will hit £15.7bn with online spend growing rapidly to hit the £8bn mark!
It is reported that display advertising is the fastest growing market in internet advertising, which is likely to surge by 20% to reach £2.7bn. Display advertising has performed consistently well in ad spend stakes since 2013 with advertiser demand for this format rising steadily. Paid search advertising is likely to grow to £4.2bn with around 29% of that advertising on mobile devices.
The future is looking extremely bright for digital advertising and with observations that the British have a particularly keen enthusiasm for the digital world; there could be fewer rivalling ways to reach audiences in 2015.
Contact The Media Angel for advice on how to incorporate digital advertising into your media mix and harness its huge potential! Give one of our friendly team a call on 02921 320 200 or email [email protected].
UK ad spend rises to nearly £20bn, with mobile marketing on the increase!
UK ad spend rises to nearly £20bn a year, around £1bn of which is now spent on mobile advertising…
According to the latest expenditure report undertaken by WARC and the Advertising Association, figures for advertising spend in the UK have risen steadily to nearly £20bn a year. Such figures coincide with predictions for further increases in advertising budgets, as the combined impact of recession and rise of the internet has forced brands to consider promoting on a longer list of media platforms.
Perhaps most significant in platform development is the growth of mobile advertising. The overall budgets for online advertising are expected to rise as figures are now formulated to include heavier spend on mobile advertising. It has been suggested that of the £6.3bn spent on internet advertising, £1bn is now invested in mobile.
Ofcom have delivered some unsurprising statistics that suggest tablet and smartphone devices are beginning to shape the ways in which we work and play. A massive 88% of 16-24 year olds in the UK now own a smartphone, and 44% of UK households now also own a tablet; trends possibly explained by the portability and ease with which individuals can access the internet via these devices.
Expense on mobile advertising and other modern formats such as television on demand are where the rising budgets are being spent, particularly since the so-called ‘millennium generation’ are said to be shaping future communication habits. In conjunction with this, print advertising expenses have continued to decline; with expectations for a 7.3% overall dip in spending in 2014 according to figures produced by the WARC.
The new anticipated release of the Apple iPhone 6 devices, with bigger screen space will mean larger ad space for mobile advertisers.