Originally at https://searchenginewatch.com/2016/05/16/google-bans-payday-loan-ppc-but-who-benefits/

Last week, Google announced a change to its AdWords policy around payday loans, banning ads for products with high APRs and short repayment terms. 

I’ve been talking to a payday loan provider, and we’ll also look at this decision from Google, made seemingly for moral reasons.

According to Google:

“Today we’re sharing an update that will go into effect on July 13, 2016: we’re banning ads for payday loans and some related products from our ads systems. We will no longer allow ads for loans where repayment is due within 60 days of the date of issue.

In the U.S., we are also banning ads for loans with an APR of 36% or higher. When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that.”

So has Google done this for moral reasons?

Well, payday loans can certainly be harmful products. Most quote something like 700% APR or above. It will typically cost in the region of £90 to borrow £200 for three months. This is steep, but the longer term loans offered by such sites are worse, while late or missed payment fees can be extortionate.

This move will not necessarily stop payday loans companies bidding on the term, but they will be limited on the types of product they can advertise.

The obvious effect is that this removes a fast path to market for newer payday loan firms who sometimes offer even worse terms than the more well-know brands. If they can’t pay for PPC, they’ll need to work on a longer-term SEO strategy to gain any visibility on Google.

However, Google still allows other products which could be harmful. For example, there are plenty of ads for home electronics which can be paid in instalments, at some very unfavourable terms.

<img class="alignnone size-full wp-image-59922" src="https://searchenginewatch.com/wp-content/uploads/s…

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