Google Bans Ads for Payday Loan Companies

16th May 2016

In a move that will likely appease poverty campaigners, Google has announced plans to ban PPC ads for short-term lending products, effectively banning ads for payday loan companies.

The company will put the new policy into effect from 13th July 2016. Globally, this will result in a ban on any loan where the date of repayment is less than 60 days of the date of issue. Additionally, In the USA, the search giant will also ban ads for loans with an APR of 36% or higher, regardless of the payback deadline.

This move has long been expected from Google as the company has previously taken action against payday loan companies with a special variation of its algorithm which was created to deal with the “spammy websites and spammy terms” that are often found within the industry.

 

Changes to PPC Based On Ethics

Google has been one of the major providers of online advertising. However, the site is part of a growing trend to prevent ads for services that are considered morally reprehensible or products that are plain dangerous. The dangerous products list includes explosives, guns, knives, drugs and tobacco as well as the newly added payday loads.

This change is designed to protect users from deceptive or harmful financial products and will not affect companies offering more sustainable long-term loans such as mortgages, car loans, student loans, commercial loans, or revolving lines of credit.

Russell Hamblin-Boone, chief executive of The Consumer Finance Association (CFA) said it was disappointed by the move. “Short-term loans are a legal source of credit used by millions of people across the UK, and the industry is highly regulated,” said Mr.Hamblin-Boone.

For a business with clients in the affected industry, there are few options available currently to replace the traffic lost from AdWords PPC ads. Providing higher quality content will to some extent mitigate the issue, however, with a corporate environment that is becoming hostile to the short-term loan industry from an ideological position, it remains to be seen how much effect this strategy would have in the long-term.