The dust has finally begun to settle, yet there is still some confusion that has been left behind post GST, and if you are looking forward to make things easier for you and your business, you have come to the right place.
Last two weeks saw the advertising world making hay while retailers raised their marketing game to leverage on the attraction of pre-GST prices, however, the industry will now have to realign itself with post-GST budgets, as the tax levied on advertising is increased by 3%. The advertising services including retainers, media spends, video production, the works, now fall 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. Colloquially termed ‘Google Tax’, the equalization levy is applicable on international entities like Facebook, Google, Yahoo and LinkedIn among others.
“Today, social media platforms are central to any digital marketing plan as they help reach a wider audience.” said, Mitchelle Carvalho, CEO of CogMat, a digital marketing agency based in Mumbai. “In the wake of GST and Google Tax, digital marketing budgets will have to rejig short-term strategies on digital ad spends, especially in the preliminary phase of the tax roll-out.” she further added.
The digital expert says that, whenever any industry is challenged with recession, tax hike or any kind of economic downturn, advertising budgets are the first to get tightened, for 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:
Harness Owned Media
Owned media typically comprising of websites, blogs and emails, are often a permanent feature in marketing activities but never the star attraction. Digital advertising is given more emphasis as it meets short-term goals for brand promotion whereas owned media like Search Engine Optimization and Content Marketing that are sustainable long-term exercises feature lower on the list of priorities for brands looking at a promotional blitzkrieg.
Brands who choose to focus on Owned Media will continue to have meaningful conversations with their audience and break through the clutter to have true fans who resonate with the brand; thereby meeting their objectives.
Brands have seen an upward trend in exploring Influencer Marketing for promotions and this should continue to be the case. Influencer marketing helps brands reach their right Target Group and engage with them effectively. Influencer referrals through product unboxing and reviews, work as excellent endorsement for a brand instilling more trust among its audience.
A quicker and better way to advertise efficiently on Facebook, YouTube, LinkedIn and Google networks will be to advertise among the right clusters. Instead of keeping the targeting open and generic, brands can try and focus on clusters that are most relevant to their industry or brand category. Well targeted cluster advertising can prove to be more efficient when budgets are tightened.
Creative Content on Social Media
Advertising on social media with diminishing reach may pose to be an issue. If you have worked towards getting your page a sizeable following, try and leverage it by creative use of its new features. Use polls to create dipsticks that can be used for insights on your products and services regularly. 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 follow you on social media too) to communicate online. Focus on creating quirky posts even if they are not uploaded everyday (shareability of something “Lol-worthy” is always higher). Features like 360-degree videos are relevant and add to increase organic reach as well
While trialing with above approaches can prove worthwhile, Carvalho expects 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.
“As industry verticals all over the nation are grappling with the new challenges brought in by the revolutionary tax reform, businesses are still under muddle about who pays more and who saves more. And amidst the chaos, we are hopeful that with the efficient use of available resources, digital marketing industry will find its feet in the GST era.” Carvalho added.