GoogMob Deal “A Watershed Moment” For Mobile Advertising

Just as the introduction of the iPhone changed everything in the consumer world of mobile and helped usher in the era of the mobile internet, the pending Google acquisition of mobile display ad network AdMob is an almost equally significant event for mobile advertising. Over the past few years mobile advertising and marketing have been [...]

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Turkey Suing Google for $47M in Back Taxes

Dear World:

Google is advertising in your countries.

Duh.

Turkey has recently determined that Google owes them $47M US (71M Turkish lira) in back taxes on advertising sold in Turkey. The government maintains that because Google sells advertising in Turkey and maintains an office and registered subsidiary in the country.

Google, on the other hand, points out that “it runs its ad network operations from Ireland and thus is not obliged to pay taxes in Turkey merely because it owns a subsidiary there.” The suit recognizes that bills and checks (or should I say cheques?) for such advertising are addressed from/to the company’s European headquarters in Dublin.

Says TechCrunch:

In a statement, Google said it is acting in accordance with the tax laws of every country in which it operates, including Turkish laws, and that its negotiations with the government on this issue are ongoing. . . .

We’ve also been in touch with a Turkish lawyer, who tells us the government is making a valid claim, pointing out that Google has set up a full-fledged company called Google Reklamcılık ve Pazarlama Ltd. Şti. (which means Google Advertising and Marketing Ltd.) in Turkey rather than what he refers to as a ‘liaison’ branch. Had it done the latter, says the lawyer, the company would have had to pay very little or no taxes at all.

Personally, I’m a little skeptical of the Turkish government’s claim, mostly because if Google has really been taxable all this time (and since Google is the #1 online and search ad company in Turkey), they (the government or Google) would have figured this out a lot sooner. Did the Turkish government just figure out they could tax Google? Or is this, as TechCrunch points out, just a bargaining tactic tor force Google’s negotiations to go faster?

(Note: the Turkish government says they’ve determined this after a year of investigating. Again, a year? It doesn’t take a year to figure out that someone should be paying you taxes, especially not if a Turkish lawyer can figure it out in one email. If they really wanted the taxes, they could have indicated that Google should be paying taxes at the beginning of the investigation instead of stalling a year while Google racked up more income that they could penalize. I think being dishonest like that should be reason enough to lose the suit.)

Here’s what I think: if you really want to tax Google, countries of the world, then do it—but pass a new law that they can’t get out of. Don’t try to cobble together a legal argument, backform your present laws that may or may not fit the situation, or stall an entire year to try to squeeze more out of them. Because, after all, taxing Internet companies for selling stuff in your jurisdiction has worked really well in New York, North Carolina, etc.

What do you think? Will Turkey get their cash, will the case get thrown out, or are they really just hoping for Google to settle for any amount? Will this make Google reluctant to operate in that country in the future?

Study Shows All Your Dreams Will Come True With Display Advertising

The Online Publishers Association (OPA) would like you to know that just because a consumer doesn’t click on your display ad, that doesn’t mean it wasn’t effective!

In fact, according to its new study, “The Silent Click: Building Brands Online,” OMA says the money you spend on display advertising contributes towards your other marketing efforts. The findings include:

• One in five conduct related searches and one in three visit the brands’ sites
• Users spent over 50% more time than the average visitor to these sites and consumed more pages
• Users spent about 10% more money online overall, and significantly more on product categories related to the advertised brands
• Higher income audiences visited the advertisers sites

While the study was conducted by comScore–and assessed 80 of the biggest branding campaigns across 200 of the most trafficked sites–you should assume that the data is somewhat skewed. As much as it helps us out–if you spend more on display advertising–let’s not lose site that this study was commissioned by a group that wants you to spend more on display ads.

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Radio Takes a Ad Revenue Hit As Well

While likely to be no surprise, the Wall Street Journal reports that radio ad revenues have fallen sharply along with just about anything else that has the word advertising attached to it. That is unless you are in some sectors of Internet advertising and even then it depends on who is doing the research to supply data that determines whether that is true or not.

It looks like the Internet and all of those who participate in the commercialization of it (i.e. advertising, marketing and general trouble making) are responsible for the end of the media world as we know it.

….intensifying competition for listeners, from satellite radio and the Internet, helped slow growth in advertising. The recession sent revenues off a cliff. Station ad revenues fell 7.8% in 2008 and are expected to drop a further 15% this year, estimates consultant BIA Financial Network.

There is a bright spot, however, in the radio world. The smaller market stations that can be more locally focused, while still suffering, are not hurting as badly and have prospects for future success. Makes sense considering the noise that local search has been making lately. Maybe there are ways to make nice and play together on a local level for the small business owner. Covering one’s bases with an inexpensive, targeted radio campaign that gets the message out thus supporting when people search for local solutions makes good sense.

The key element will be the not just radio stations that survive but those who thrive and the small markets are looking to be the most likely prospects for that to happen.

……the best positioned broadcasters may be those exposed to smaller markets, where competition for ad dollars is less. Average revenue at stations in markets below the top 50 fell 6.6% last year compared with around 9% for bigger stations, BIA estimates. It projects smaller stations will continue outperforming through 2013.

One thing that is interesting about that statement is that the competition for ad dollars is less. That is probably more relative in reality. There are not a lot of small businesses right now that are flush with ad spend that has nowhere to go. Just because there are less places to advertise doesn’t necessarily translate to the advertising dollars being there regardless of how many different channels want a slice of the small business ad pie.

So Pilgrims, what’s your view of radio? Is it still viable? If so, in what form or format? How does it play in your ad spend alongside of dwindling print opportunities and abundant Internet options? Is there a future for radio?