The FTC Reminds Search Engines to Label Paid Results

The Federal Trade Commission issued a sternly worded letter to Google, Yahoo, Bing, AOL and 19 other lesser-known search engines, giving them a slap on the wrist for trying to blur the difference between paid ads and natural results. According to The Guardian, the FTC didn’t specifically call out a specific engine, but cited the general blending of paid/organic results over the past 10 years.

In recent years, the features traditional search engines use to differentiate advertising from natural search results have become less noticeable to consumers, especially for advertising located immediately above the natural results.

Historically, paid results have been in a separate section of the SERPs, off to the side so users knew they weren’t natural. But they have been creeping over to blend more and more into the organic results. The FTC found that search engines have been shrinking the text that lets users know which ads are paid, making the background color paler, and using multiple phrases for “paid result” to confuse users about the difference.

google1Apparently, all of those tactics are working. The letter cites a study by the Pew Research Center from 2005 that found 62% of users couldn’t spot the difference between paid and natural results, while only 18% said they could always tell the difference.

When search engines fail to clearly disclose which results are paid and which are organic, they violate the FTC’s .com Disclosures that require clear and concise labeling of sponsored posts and advertisements.

While the FTC originally wrote out the .com Disclosures 20 years ago, and addressed advertising in search engines 10 years ago, they needed to remind companies about their advertising regulations due to the rapid evolution of mobile devices. Americans are adopting smartphones to find answers and search engines have to clarify which results are sponsored on both mobile devices and desktops.

Regardless of the precise form search may take in the future, the long-standing principle of making advertising distinguishable from natural results will remain applicable.

After emphasizing the importance of differentiating paid and organic ads, the letter suggests adding both a more prominent border and darker shading to distinguish sponsored results. They also want search engines to make the “sponsored ad” text labels bigger and closer to the ads – and with less ambiguous terminology.

We live in a world where the lines between advertising and content are growing more and more blurred, where marketers try to create engaging, interactive content to sell their products. It only makes sense that search engines would try to blur the lines between sponsored and organic results as well.

A letter from the FTC usually brings as much joy to companies as an IRS audit. Do you think search engines will heed their suggestions and make changes to the formatting of paid results? From a marketer’s perspective, do you think it will affect the success of sponsored results like Google AdWords?

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Amanda Dodge