Google AdWords Bans Payday Loan Ads

23 May 2016

Google AdWords Bans Payday Loan Ads

Google has announced that, from July 2016, it will ban ads for payday loans on its AdWords advertising network.

Currently, ‘adult’ services, gambling-related content, alcoholic drinks and prescription medications are among the list of businesses that are not allowed to be advertised using Google AdWords. Last year, the search giant banned 780 million ads for breaching its policies, so it does appear to take its responsibilities in this area seriously.

Google has recognised that “Ads for financial services are a particular area of vigilance given how core they are to people’s livelihood and well being. […] We’re banning ads for payday loans and some related products from our ad systems”.

AdWords will no longer allow ads for loans that must be repaid in under 60 days. In the US, the rules will be even more stringent: any ad with an APR of 36% or higher will also be banned (in the UK, payday loan APRs can be as high as 4,000%).

The reason for this change in policy is that Google found that, “When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates for users […] This change is designed to protect our users from deceptive or harmful financial products and will not affect companies offering loans such as mortgages, car loans, commercial loans…”.

Search research firm AdGooroo estimates that Google is set to lose $34.5 million in ad revenue from such payday loan ads, which looks like a massive amount. However, it does account for just 0.05% of Google’s annual ad revenue in 2015. Nonetheless, making such a change for ethical rather than business reasons could hark back to Google’s early days where its motto was “don’t be evil”.

If you are currently advertising payday loans, this is the time to start looking at alternative methods of getting the word out about your service. It is also a reminder that checking the terms and conditions of any pay-per-click advertising network is essential, if you are to advertise in an acceptable and appropriate way.