Google Bans Payday Loan Ads: What Do You Think?

Creative Commons image by Jonathan Rolande.

Creative Commons image by Jonathan Rolande.

You might have heard that Google has announced their plan to ban payday loan ads. What this means is that companies offering loans with high annual percentage rates (36% or more in the USA) and repayment terms of less than 60 days will no longer be allowed to advertise those loans on the search engine giant. The new rule will go into effect in July, so payday loan companies have just a couple of months to come up with a new digital marketing strategy that does not include an AdWords campaign.

So, why did they make this move? One theory is that they’re doing it for moral reasons. After all, payday loans are known as predatory loans in most cases. They prey on the poor and downtrodden who have poor credit and can’t obtain a loan elsewhere. While this might sound noble, it might not be the reason that the ads are banned. Consider that other types of products that prey on the same type of consumer (such as rent-to-own furniture, for example) are still allowed. On the other hand, some progress in this area is better than no progress, and eliminating ads for payday loans is a step in the right direction, if the goal is to protect consumers.A� Other products currently banned from advertising are cigarettes, illegal drugs and explosives, so there is a precedent already set, and this might just be the next harmful product in line.

Another possibility is that some of the major players in the payday loan industry might not be opposed to this measure. Think about it: If you have a popular and busy payday loan company, your AdWords campaign is probably not (or is no longer) the reason for your current success. It would be a boon to know that your competitors are not allowed to advertise anymore. Similarly, if a particular company is ranking at the top of the first page of Google results, that company’s PPC ads are irrelevant, particularly if other PPC ads are banned. It means that the top results will end up on the top of the search page, which very well may boost business.

So, what do you think about this? Do you think that Google is doing the right thing for the right reason, or do you disagree with either the action or their desire to protect people from making poor financial decisions? There is some controversy about it: While many believe that the new rules will take a stand against predatory lending, others feel that the decision is discriminatory against these companies, who feel that they provide a necessary service to people who would otherwise miss a rent payment, go without groceries, or have their electricity shut off.

Whatever the reason and the public consensus, Google plans to go ahead with its plan to ban the ads beginning in mid-July. As it’s not the first time they’ve banned a product or service, the payday loan industry, just like the cigarette industry, will go on. Lenders might have to step up their SEO or other marketing strategies, though.