FTC: Sponsored Search Results Need To Be Clearer

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FTC: Sponsored Search Results Need to Be Clearer
FTC: Sponsored Search Results Need to Be Clearer

The Federal Trade Commission (FTC) articulated its concern about the increasingly blurred line between paid and organic search results in a letter sent on June 24 to twenty five major search engine companies, including Google and Microsoft. The letter aims to revise the guidelines published in 2002, and to remind search engines to “clearly and prominently distinguish advertising from natural search results,” the FTC noted in a press release.

The letter was prompted mounting complaints from Internet users, who couldn't differentiate between sponsored ads and organic search results. The problem, says Alex Funk, director of global paid media services at Covario, is that the influx of paid listings has “demoted” organic results.

The FTC's revised guidelines call for search engines to introduce visual cues that would make it easy for Internet users to discern paid search results and other modes of advertising from organic search results. However, the agency insists it isn't going to actively regulate the search marketing space; search engine providers will decide how specifically to display organic and paid search results. “Search  engines can use shading, a lined box, a border, or some other form of labeling, as long as it is clear to the consumer whether something is an ad or not,” says Elizabeth Lordan, a public affairs specialist at the FTC.

However, with no concrete guidelines in place, what makes a paid ad distinguishable from an organically-generated one remains subjective, Funk argues. Funk, who is colorblind, often has trouble telling the two apart.

Daryl Colwell, SVP at search marketing agency MediaWhiz, believes the root of the problem originates from less-prominent search engine providers, who obscure organic versus paid search results to drive revenue. “The big boys [like Google and Microsoft's Bing generally] have no issues complying,” Colwell says. 

A Google spokesperson stresses the importance of “clear labeling and disclosure of paid results.” Similarly, a Microsoft spokesperson considers clear labeling “an important issue to the industry.”

While search engine titans like Google and Bing can afford to comply with the guidelines without incurring major revenue losses, some niche search engine providers cannot. For Colwell, the FTC's revisions aim to “clean out, for lack of a better term, certain players that have been flying below the radar.”

Still, both Funk and Colwell agree that FTC has a valid point. “[It's the FTC's] job to protect the consumers, and to act in consumers' best interests in the face of businesses,” says Colwell. If non-compliance persists, Colwell advises advertisers to “put even more emphasis on creating better content to ensure that [their] site continue[s] to rank highly for the relevant keywords, and verticals they play in.”

Search engine providers might find these compliance changes “jarring at first”, Funk says; though he expects them to eventually acclimate.

If violations persist, however, Lordan says the FTC “will seek to determine whether consumers are being deceived in violation of Section 5 of the Federal Trade Commission Act, and will take appropriate action.”

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