Google's retired motto "do no evil" may actually come to bear. The company will lose about $35 million in advertising revenue as a result of its ban on payday loan ads to protect searchers from predatory lenders, according to research released Thursday by AdGooroo, a Kantar Media Group company.
On Wednesday, Google Global Product Policy Director David Graff wrote in a blog post that as of July 13, 2016, the company will no longer allow ads for high-interest, short-term loans to serve up in paid-search results. It prohibits paid ads for loans with a repayment date within 60 days; and in the U.S., the company will prohibit ads promoting interest rates of 36% or more.
No payday ads means less revenue for Google. Some 4,211 advertisers collectively spent $35.5 million to sponsor 726 payday loan keywords on U.S. Google desktop search last year, at an average cost per click of $5.32, according to AdGooroo.
As the top advertiser on the 726 payday loan keywords, moneymutual.com spent nearly $2.7 million for 252,505 clicks at an average click-through rate of 3.80% at a cost per click of $10.55 for 608 keywords with Google in 2015.
Nine advertisers, from quickercash.com to maxlend.com, earned an average CTR of 3%, ranking in CPC from $7.56 to $10.20. Upturn in October 2015 published a report highlighting why the use of ad targeting for this type of lead generation is harmful.
The report, organized into three sections, highlights online lead generation, online payday lending ecosystems, and interventions and what can be done. The latter most interesting because it details the risks, such as how these companies can share a customer's sensitive financial data, increasing the chance that it will fall into the hands of unscrupulous companies. These companies continue to use Google and Bing to serve advertisements, even in states that outlaw both payday lending and payday lead generation, according to Upturn.
While the report calls for stronger federal guidelines, Google took matters into its own hands.
In term of the data, AdGooroo limits the results of its study to paid-search activity on the 726 payday loan keywords analyzed. Advertisers may sponsor additional keywords that, if measured, would alter the findings of the data.