So what does Google get out of payday loans?
The news results for payday loans included a recent, legitimate article from Bloomberg BusinessWeek on the practice of lead generation companies auctioning users’ info, but it also includes a spam press release that is hosted on the Seattle Post Intelligencer site that was originally sourced from PR Web, a service that distributes press releases for anyone willing to pay their fee.
The second SERP is even worse. It’s dominated by churn and burn affiliate and lead gen sites or hacked, unrelated sites.
Money. Lots of it. Google earns more than 90% of its revenue from AdWords. According to Fahrenheit Marketing, the loan industry (broadly speaking, which includes mortgages, credit cards, etc.) is the second most expensive keyword vertical on Google with a top CPC of $.
Google’s own Traffic Estimator reveals how profitable the payday loan segment is, driving at least $60,000 in revenue daily from payday loan keywords alone. Click to expand images below.
You get the idea. Based on these examples and using Google’s own conservative Traffic Estimator data, Google could be earning $34 million a year from these keywords. Veteran PPC marketers know that Traffic Estimator isn’t totally accurate. SEMRush shows an average CPC of $ for “payday loans,” $ for “cash advance,” and payday loans in Gahanna $9.11 for “fast cash,” meaning Google’s earnings are likely significantly higher. Can Google live without this revenue? Certainly, but it’s not going to give it up unless it is forced to do so.
Even PPC ads aren’t delivering a good user experience.
Sadly, even expensive PPC ads aren’t delivering a quality experience. As seen in the SERPs captured above, the top ads are lead providers, tribal lenders, and offshore lenders. Lead providers exist solely to collect users’ information and then resell it to the highest bidder. Tribal and offshore entities leverage their affiliations with Native American tribes or offshore locations to circumvent state laws that are designed to protect consumers.
Many of the top ads include deceptive claims or outright lies that lead users to believe that new customers can qualify for as much as $1,500 or receive their money in as little as two minutes. Few legitimate companies can afford to compete with lead providers and tribal or offshore lenders, meaning consumers are forced to choose from the deceptive ads that lead to the companies that are out to extract the most profit from them.
Google has tried to address this…sort of…
Despite Google’s strengthened AdWords policies for short-term loan products that require websites to disclose things like APR, legitimate contact information, and a code of practice on responsible lending, many sites still don’t do this, or they legally can’t do this without violating federal regulations.
Where do we go from here?
Google has a vested interest in delivering a quality user experience. If it doesn’t, it eventually will lose market share (and profits) to competitors who can. So how can Google fix this?
On the organic side, Google’s crackdown on link networks is a good start, but it doesn’t stop unscrupulous sites from gaming Google through cloaked redirects and hacked sites. Some things Google could look at to detect these sites include:
- Site Age & Domain Age – Many of the churn and burn affiliate and lead gen sites were recently registered and recently created. Legitimate brands in this space have been around for years.
- WhoIs Info – Shady sites hide behind private domain registrations. Legitimate companies typically do not.
- Unusual 301 Redirect Activity – Are there a large number of external domains 301’d to a site?
- Link Velocity – How quickly are sites gaining links?