Ways For Digital Agencies To Cope Up With GST

“DM budgets will have to be reorganized for short-term strategies on digital ad spends,” 

says MitchelleCarvalho, CEO, CogMat on digital marketing GST trends. 

For a while now, the advertising world is going bizarre, while the retailers raised their marketing game to leverage on the attraction of Pre-GST prices (like all the sales happening in the name of ‘Pre-GST sale’).

However, the digital marketing industry has now realigned itself with all the post-GST budgets, as the tax levied on advertising is increased by 3%. The advertising services including retainers, media spends, video production, etc., now falls in the 18% GST slab.

The rise in tax comes as a second blow at the industry, after its digital media advertising domain came under the additional tax liability of 6% Equalization Levy, earlier last month. It is generally being termed as ‘Google Tax’ This equalization levy is applicable on all international entities like Facebook, Google, Yahoo and LinkedIn among others.

Mitchelle Carvalho, CEO of CogMat once said “Today, social media platforms are core to any digital marketing plan as they help in reaching a wider audience.” She further added ” In the wake of GST and Google Tax, digital marketing budgets will have to reorganize short-term strategies on all digital ad spends, especially in the preliminary phase of the tax roll-out.”

Some of the digital experts say that, whenever any industry is challenged with tax hike, recession, or any kind of downturn in the economy, advertising budgets are the first to get tightened, for any & all businesses to stay afloat.

Unfortunately, advertising is rarely seen as an investment instead of expense. Such times call for more organic, innovative and focused tactics to get better value out of the limited money spent.

Some key strategies to consider for effectively managing online advertising spends with GST:

1.Harness Owned Media – Owned media typically comprising of websites, blogs and emails, and are often a permanent feature in all marketing activities but are never the star attraction. Digital advertising is given more emphasis because it meets short-term goals for brand promotions,however, owned media like Search Engine Optimization and Content Marketing that are sustainable long-term exercises, featuring lower on the list of priorities for brands looking for promotional blitzkrieg.

Brands who choose to focus on Owned Media continue to have meaningful conversations with their audience and break through the clutter to have true fans who resonate with the brand and thereby meet their objectives.

2.Influencer Marketing – Brands have seen arising trend in exploring Influencer Marketing for promotions and this should continue to be the case. Influencer marketing helps brands in reaching their right Target Audience and engage with them effectively. Influencer referrals through product reviews, work as an excellent endorsement for a brand for instilling more trust for themselves among their audience.

3.Advertising in Clusters – A faster and better way for advertising efficiently on Facebook, YouTube, LinkedIn and Google networks will be to advertise among the right clusters of people. Instead of keeping the targeting open and generic, brands should try and focus on those clusters which are most relevant to their industry/brand category. A good & well targeted cluster advertising can prove to be more efficient when budgets are tightened.

4.Creative Content on Social Media – Advertising on social media with diminishing reach may become an issue. If you have worked to get a good amount of following to your page,try & leverage it by creative usage of its new features. For example – Use Live to bring expert insights, engaging Q&A, behind-the-scenes with products, even if it is an internal football match (remember your employees follows you on social media too) to communicate online. Focus on creating quirky posts even if they are not uploaded every day. Features like 360-degree videos are relevant and add to increase organic reach as well.

While trailing with above approaches can prove worthwhile, we expect that the impact of GST on digital media industry will set a trend by next quarter, by which India’s festival season will kick in.

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