Google updates product policies time by time, few days ago, Google updated programe policies of Google Adsense. This was a silent update made on May 27, 2011 and most of Google Adsense publishers are not aware of this update as publishers rarely read Policy updates, they only come to know when their accounts are disabled because of updated policy. Anyways, Google brought a major change in this policy for publishers and according to this change, Google Adsense publishers are not allowed to place Google ads in iframes.
According to this change:
AdSense code may not be altered, nor may the standard behavior, targeting or delivery of ads be manipulated in any way that is not explicitly permitted by Google. This includes but is not limited to the following: clicking Google ads may not result in a new browser window being launched, nor may Google ads be placed in an IFRAME.Google always discouraged placing ads in iframes as they said "Our targeting technology is not optimised to serve ads within a separate IFRAME" however publishers were allowed to place ads in iframes but according to recent update of Google Adsense Program policy, placing ads in iframe clearly violates Google Adsense policy.
Possibly, users still can show contents using iframe and there is no issue if that content-iframe includes Google Adsense ads too.
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