As director of paid search at Greenlane Marketing, a web marketing firm based in Eagleville, Pennsylvania, Christian Wenzel spends a lot of time studying who's clicking on his clients’ Google ads. He’ll look at things like where they're located to see if, for instance, people in Pennsylvania are more likely to click on a given ad than people in California. Then, he'll tweak the ad campaign accordingly in hopes of maximizing its effectiveness.
Last April, Wenzel was scanning one Google Ad performance report when he noticed something strange. The campaign was for a US-based software company, and it was supposed to reach people in the United States, Australia, Canada, South Africa, and the United Kingdom. But according to Google, the ad had also been shown to people in Iran, Syria, Sudan, North Korea, and Cuba—all countries that are sanctioned by the US Office of Foreign Assets Control, or OFAC. People in those countries were unlikely to be prime customers for Wenzel's client, but whenever they clicked on the ads, his client was charged for it anyway.
It wasn’t much—about $100 in Iran here, less than $1 in Cuba there—but to Wenzel, it felt like throwing money away. “Obviously, that’s money we’re wasting for our clients,” he says. “There’s no way those people would become a customer.”
When Wenzel tried to exclude those countries from being targeted in the campaign, though, he found that he couldn’t easily do that either. In order to comply with the law, Google prohibits advertisers from naming six sanctioned countries as targets or exclusions. And yet, Google still serves ads in these places, which means advertisers can inadvertently spend money reaching people in countries where they’re largely barred from doing business. “It’s kind of bullshit,” Wenzel says. "In my opinion it’s just Google trying to increase their revenue."
Issie Lapowsky covers the intersection of tech, politics, and national affairs for WIRED.
Wenzel is hardly alone in feeling ripped off. The issue he spotted is the subject of numerous blog posts, Google message board discussions, and tweets, going back years. WIRED spoke with several advertisers who found unexpected costs accrued in OFAC-sanctioned countries, with no easy or obvious way to exclude those countries from their campaigns. Not only that, they say Google’s default ad settings quietly nudge advertisers to spend money in these places, often unwittingly. It’s an issue that, while narrow, underscores the voraciousness of Google’s $100 billion ad business, and the blurry lines tech companies draw in pursuit of global growth.
OFAC sanctions are a tangled morass of trade restrictions that apply to an ever-evolving list of countries, businesses, and individuals, in order to help the United States achieve any number of foreign policy goals. Given the complex nature of sanctions, Google declined to provide legal justifications for why it writes rules the way it does. Instead, a spokesperson said in a statement, “We comply with sanctions imposed by the United States Office of Foreign Assets Control, and we do not offer the Google Ads product to advertisers in countries sanctioned by OFAC." This policy applies to Crimea, Cuba, Iran, North Korea, Sudan, and Syria. As part of its compliance, Google also prohibits advertisers outside these countries from targeting them specifically.
But that doesn’t mean Google prevents ads from appearing in those places. “If an advertiser chooses to run a global campaign, their ads will show up globally without geographic limitations,” the spokesperson said. In other words, if you try to target people in Iran, Google won’t allow it. But if you try to target anyone in the world, you may very well be charged for ads that pop up in Iran.
From a legal perspective, there’s nothing wrong with that, as long as the entity paying for the ad and the publisher hosting the ad are based somewhere else. After all, the goal of economic sanctions is to prevent US entities and individuals from doing business with these countries. “Unless one of your parties is in Iran or unless they’re a prohibited party under the sanctions, there wouldn’t be money movement or an economic transaction,” says Allison Caffarone, executive director of the Program on Corporate Compliance and Enforcement at New York University School of Law.
A spokesperson for OFAC declined to comment on Google's ad program.
But while Google appears to be on the right side of the law, whether they're doing right by their advertisers is a different question altogether. Advertisers say the company makes it far too easy to accidentally run ads in these places—and not easy enough to leave them out.
The issue, they say, stems from the default settings Google has put in place for geographically targeted ads. Say you want to reach people in the United States. Today, if you start an ad campaign and select the United States as your location target, by default Google will send your ad not just to people who are in the United States but also to people who Google believes have shown an interest in the United States. Google’s algorithms could, in other words, determine that a person in Pyongyang is interested in your product, regardless of whether they’re even allowed to buy it. If that person clicks on the ad, you’d have to pay Google for it either way.
Facebook, Google biggest competitor in the digital ad space, also allows advertisers to target their campaigns geographically. But unlike Google, Facebook’s feature defaults to targeting only those people whose home or most recent location is within the bounds the advertiser sets. Advertisers can then change their parameters to target people traveling to that location or who were recently in that location, if they want.
Google advertisers also have the option to change their location target settings, but often they don’t know they need to. Google doesn’t disclose all of this in the main location settings, instead tucking it away under a separate menu called Location Options. There, users can opt out of Google’s recommended setting and target only people in their chosen locations.
“[Google] has very different motives than the advertisers do,” says Aaron Weiner, who specializes in Google Ads for the marketing firm SoftwarePromotions. “They want to make money on my clicks. They don’t necessarily want to sell customers on my client.”
This is how Wenzel’s client ended up gathering clicks in Iran and other countries. Though they believed they were only targeting the United States, Australia, Canada, South Africa, and the United Kingdom, Google was also targeting people who its algorithms decided were interested in those places.
When advertisers realize they’ve been paying for ads in sanctioned countries, as Wenzel did, they face another obstacle. Typically, Google allows advertisers to exclude countries from their campaigns by searching the name of the country—but those six sanctioned countries don’t appear as options. Google declined to elaborate on why the system is set up this way, other than saying it was to comply with sanctions. But the result is that, in order to prevent ads from showing up in sanctioned countries, an advertiser has to upload a list of every country they do want to reach. If an advertiser wants to run a global campaign, it would mean entering a list of every other country in the world.
This was the advice Ryan Moothart received last year when he contacted Google about ads being served to Iran, North Korea, and Syria. Moothart manages Google Ad campaigns for the Seattle-based digital marketing firm Portent. Moothart says the Google customer service agents he spoke with were unsure why his ads were appearing in those places, but entering the countries he wanted to reach did alleviate the problem. Google also credited Moothart’s account for the charges he had accrued in those places.
A Google spokesperson says the company has no policy of reimbursing advertisers for these clicks, because that's how the system is supposed to work. But several advertisers WIRED spoke with, including Weiner, said they’d also been refunded for these ads. One advertiser, who asked for anonymity because he didn’t have authority to speak for his company, says he received a $400 refund, but only after spending hours on the phone with Google representatives.
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There are, of course, legitimate reasons a person in Iran or another sanctioned country might be a good target for an ad, even one marketing a US-based company or institution. Perhaps that person is only in Iran temporarily or is planning on studying abroad. Economic sanctions aren’t intended to create information blackouts in these countries, and in a lot of ways, digital ads are just information, delivered to you before you ever asked for it. According to Christopher Boehning, a partner at the New York-based law firm Paul Weiss who specializes in global sanctions, informational materials, including ads, are generally exempt from sanctions rules. "This exemption is consistent with US policy to allow for the free flow of information between the residents of sanctioned countries and the rest of the world," Boehning says.
But for Wenzel’s clients, the goal of these ads isn’t just to spread information. It’s to jump-start sales or other types of commerce—activity they’re prohibited from engaging in in these countries. What frustrates Wenzel most, he says, is the fact that a company like Google, which meticulously studies user habits, hasn’t changed its settings to be more user-friendly and transparent about where ads are being served. Instead, the company continues to collect on all those clicks.
“Our clients are larger advertisers, who can afford to hire an agency to manage their campaigns. A lot of Google’s advertisers don’t have those resources,” Wenzel says. “If I’m a smaller company, and I think I’m only targeting the US, I feel like Google should do a better job of making sure that’s where those ads are targeted, especially in countries there’s no chance you’re going to get a sale.”
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