FTC Warns Search Engines About Paid Ads

Search engines are increasingly blurring the differences between paid ads and organic listings, the Federal Trade Commission said on Tuesday.

“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,” Mary Engle, FTC associate director for advertising practices, said in letters to search engine operators. The letters marked the agency's first major guidance to search engines since 2002, when the agency stated that search companies should clearly differentiate sponsored ads from organic results.

The letters were sent to dozens of companies, including Google, Bing, AOL and Yahoo. 

“To avoid the potential for deception, consumers should be able to easily distinguish a natural search result from advertising that a search engine delivers,” Engle said in the letters, which the FTC made public on Tuesday.

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The FTC pointed to some concrete ways in which search engines potentially confuse consumers. For instance, some search companies no longer use markedly different background colors for paid ads and organic listings, according to the FTC.

The letter cited recent research suggesting that it's problematic for search engines to use the same (or very similar) background colors for ads and organic listings. “A recent online survey by a search strategies company found that nearly half of searchers did not recognize top ads as distinct from natural search results and said the background shading used to distinguish the ads was white,” the letters state.

The agency suggested that search engines could remedy that issue by placing ads in box with “prominent shading that has a clear outline,” or use a “prominent border” between ads and natural search results.

The FTC also said that some search engines might confuse consumers by placing ad labels on the top right-hand corner of a block of listings. “Consumers may not as readily notice the labels when placed in the top right-hand corner, especially when the labels are presented in small print and relate to more than one result. Web research suggests that Web pages are normally viewed from left-center to right, with substantially less focus paid to the right-hand side,” the letters stated.

While the letter offers specific recommendations, the underlying principles are no different from the ones set out in 2002, according to attorney Jeffrey Greenbaum. “The FTC is really responding to the fact that, over the last decade, for whatever reason, search engines appear not to be complying with the earlier guidance,” says Greenbaum, an advertising lawyer with Frankfurt Kurnit Klein & Selz.

He adds that this pattern isn't all that unusual -- often because the businesses themselves change. “Compliance often fades over time,” he says. “When the FTC first issues guidance, people pay attention to it. But advertising practices evolve.”

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