Choosing the optimal currency for running advertising campaigns in Meta and Google Ads for companies from Ukraine

Why is choosing the right currency critical to the success of your advertising campaigns?

The choice of currency for advertising campaigns in Meta and Google Ads is critical for companies from Ukraine. It influences budgeting, cost planning and profitability measurement. Choosing the right currency allows you to avoid unnecessary financial losses due to exchange rate fluctuations, double conversion and optimize the overall effectiveness of advertising campaigns.

Understanding currency risk in advertising campaigns

The currency risk in advertising campaigns for companies from Ukraine is the potential loss of funds due to instability of exchange rates. When a Ukrainian company uses foreign currency to pay for Meta and Google Ads, it faces the risk of changes in the cost of these advertising services in hryvnia. For example, if a campaign is planned in US dollars, and then the hryvnia exchange rate decreases against the dollar, the total advertising costs for the company increase. Thus, exchange rate fluctuations can significantly increase the cost of advertising campaigns, which negatively affects the overall budget and the ability to achieve planned marketing goals.

Comparison of currency options for Meta and Google Ads

When choosing a currency for advertising campaigns in Meta and Google Ads, Ukrainian companies are faced with a choice between the local currency (hryvnia) and foreign currencies such as US dollars or euros. Using hryvnia may seem more convenient and eliminates the need to manage currency risk.

However, not all international advertising platforms accept hryvnia, which may limit access to some functions or complicate the payment process. On the other hand, paying in US dollars or euros provides greater access to international advertising tools and can facilitate more precise targeting. However, this also increases currency risk and requires constant monitoring of exchange rates to avoid unexpected costs.

Advantages and disadvantages of major currencies

Hryvnia:

1. Advantages: Using hryvnia provides simplicity in financial planning, since you do not need to worry about currency fluctuations or conversion costs. This also eliminates currency risk.
2. Disadvantages: Limited selection on international platforms; Some advertising tools and options may not be available in UAH. For example, if you chose hryvnia as the main currency when creating an advertising account in Meta, then you will have a double conversion, from hryvnia to dollars, and then again in hryvnia.

US dollar:

1. Advantages: Wide adoption on international platforms; greater access to various advertising tools. The stability of the dollar can also be an advantage in the face of hryvnia volatility.
2. Disadvantages: Currency risk due to exchange rate fluctuations; additional costs for currency conversion.

Euro:

1. Advantages: The Euro is a stable currency and widely accepted in advertising networks, especially in the European region, which can be useful for companies targeting the European market.
2. Disadvantages: Like the dollar, the use of the euro also involves currency risk and the need for currency conversion, which can lead to additional costs.

Comment from an industry leader

Payoneer’s partnership with Mastercard also allows users to open both plastic and dozens of virtual cards.

Usually they are actively used in digital marketing, joining Google Ads and Facebook Business Manager accounts.

In fact, if you are already a Payoneer user or want to open an account, you can generate such cards.

An important point in this will be the optimization of commissions on payments for advertising. And although the commission on Payoneer cards from Mastercard can reach a scary 0-3.5%, there are simple rules on how to pay 0%.

The main factors influencing the commission are Cross-currency and Cross-border. Therefore, depending on the country of registration of your business, it is important to understand whether your card is issued by First Century Bank N.A. (FCB) under an American license or Payoneer Europe Limited (PEL) under an Irish license.

Thus:

1. Paying PEL on a European card to a merchant in the appropriate currency within the European Economic Area (for example Google Ireland in EUR) will be free for you;
2. The same 0% commission will be applied when paying with an FCB Dollar Card to a merchant in the USA in USD.

Register with Payoneer at http://tracking.payoneer.com/ and earn $25 the first time you get at least $1,000 in your Payoneer balance after signing up for Payoneer.

Analysis of the impact of exchange rates on ROI

Foreign exchange rates can have a significant impact on the return on investment (ROI) of advertising campaigns. When a Ukrainian company uses foreign currency for advertising payments, ROI may depend not only on the effectiveness of the advertising campaign, but also on exchange rate fluctuations.

For example, if a company plans its budget in US dollars, and then the hryvnia depreciates against the dollar, the cost of advertising services in hryvnia equivalent increases. This means that to achieve the same marketing goals, the company needs to spend more hryvnia, which reduces the overall ROI. Thus, changes in exchange rates can turn an initially profitable campaign into a loss-making one. Therefore, understanding and analyzing currency trends is critical to forecasting and managing the budget of advertising campaigns.

Tools for tracking exchange rates

To effectively manage currency risk, companies need to use specialized tools to monitor exchange rates. These tools allow companies to track real and projected currency movements, providing the information they need to make informed decisions on foreign exchange investments and settlements.

Among the popular tools are online services for monitoring exchange rates, such as XE.com, OANDA or Bloomberg. Many of them provide access to historical data, analytical reports, and the ability to set alerts for significant changes in exchange rates. Some financial software platforms and business management tools also integrate currency monitoring capabilities, allowing companies to adapt their advertising strategies in real time according to changes in the foreign exchange markets.

Practical tips for optimizing foreign exchange expenses

Optimization of foreign currency expenses is a key aspect of increasing the effectiveness of advertising campaigns, especially for Ukrainian companies advertising in foreign currency. First of all, it is important to plan your budget carefully, taking into account potential currency fluctuations. This may include setting aside additional funds to cover unexpected expenses in the event of a depreciation of the local currency.

It can also be useful to enter into fixed exchange rate agreements with advertising platforms or use financial instruments to hedge currency risk (this is not possible in the case of Google Ads and Meta). This allows you to fix costs and avoid losses in the event of unfavorable changes in the foreign exchange market. In addition, regular analysis of currency trends will help in making timely decisions to change settlement strategies or adjust budgets.

Using analytics to make decisions

Analytics play a critical role in selecting and managing currency strategies for advertising campaigns. The use of advanced analytical tools allows companies to more deeply analyze currency trends, predict possible changes in exchange rates and evaluate their impact on advertising budget.

For example, big data analytics and machine learning tools can help identify patterns in currency movements that can be used to make more accurate forecasts. Also useful is the use of Business intelligence (BI) tools that integrate financial, marketing and currency data, allowing companies to effectively measure ROI and optimize advertising budgets. Using these analytics helps companies make informed decisions, minimize financial risks and ensure more stable and profitable advertising operations.

Legal and tax aspects of choosing a currency in Ukraine

Legal and tax aspects of choosing a currency for advertising campaigns in Ukraine play an important role in making business decisions. When choosing a foreign currency for settlements, Ukrainian companies must take into account the norms of Ukrainian currency legislation governing cross-border financial transactions. You should also pay attention to the tax implications of using foreign currency, as this may affect your tax liability.

It is important to note that changes in exchange rates may affect the accounting of income and expenses, so companies must ensure accurate accounting in accordance with applicable tax laws. In addition, businesses should consider any potential restrictions or prohibitions associated with the use of foreign currency in the context of international economic sanctions or local regulatory requirements.

For example, there is a difference in payment approaches when working with platforms such as Meta and Google Ads. Meta does not have the option to pay directly into the company’s bank account; the limitation is the use of credit or debit cards. This may create difficulties for businesses that prefer or are required to make payments through bank accounts.

But Google Ads offers a more flexible approach, allowing payments directly to your bank account. This may be more convenient for companies that have established banking procedures or accounting requirements.

In both cases, it is necessary to take into account the accrual of 20% VAT, which is an important aspect for Ukrainian companies. VAT must be paid regardless of the payment method or currency chosen, which can affect the overall cost of advertising campaigns and budget planning. It also requires attention to detail when maintaining tax records and planning tax deductions.

For Ukrainian companies, it is important to take into account currency and tax aspects when choosing to pay for advertising campaigns in Meta and Google Ads. Taking into account various payment methods and mandatory VAT calculation is key for effective budgeting and cost optimization.

Vladyslava Rykova

Expert in legal marketing. Head of marketing agency MAVR.

Business degree “Master of Business Administration” (MBA).