Publicis calls on Google to avoid 2pc advertiser charge
Google has been urged by one of the world’s biggest advertising companies to reverse its “heavy-handed” decision to make brands bear the cost of the UK’s new digital services tax.
Publicis, the French company behind agencies including Saatchi & Saatchi, has pressed the American tech giant to rethink a 2pc charge from November, claiming it is “driven by deeper political issues”.
The digital services tax was rolled out on April 1, affecting search engines, social media companies and online retailers such as Google, Amazon and Facebook, with a levy on their UK revenues.
In an email seen by The Sunday Telegraph, Publicis Media Exchange, which manages trading on behalf of Publicis Media’s advertising agencies, said: “We believe this is a heavy-handed approach by Google that’s driven by deeper political issues.”
It added: “The [UK Government] don’t want Google to simply increase costs and pass these on to their customers. Taxation of major digital media platforms is a global issue and will be part of any ongoing or future trade negotiations between the UK and the US/EU. We have expressed our disappointment to Google regarding the introduction of this fee.” Paris-based Publicis is one of the world’s oldest and largest communications companies, with a market value of €6.8bn (£6.2bn).
The company owns a string of advertising and marketing agencies, producing campaigns for brands including Cadbury, Samsung, Kellogg’s and Honda.
The business is also part of the “big four” advertising holding companies alongside WPP, Omnicom and Interpublic, which have suffered from the digital disruption caused by Google and Facebook.
Google’s decision to charge extra for adverts placed on its search engine and Youtube will reportedly heap £120m worth of annual costs on to British advertisers.
A Google spokeswoman said the company would continue paying all UK taxes, but would encourage governments around the world to focus on international tax, instead of “new unilateral levies”.
“Digital service taxes increase the cost of digital advertising,” she added. “Typically, these kinds of cost increases are borne by customers and like other companies affected by this tax, we will be adding a fee to our invoices, from November.”
Publicis did not respond to a request for comment.
