FTC staff to search engines: Differentiate ads from natural results

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When users type something into a search engine and hit enter, what shows up on the screen next?  Is it the natural result of their search or is it advertising?  If they get natural results and ads, is it clear to consumers which is which?  Following up on efforts to update guidance to digital advertisers, including revisions to .com Disclosures and the Endorsement Guides, staff of the FTC's Bureau of Consumer Protection just sent a letter to search engine companies.  If your clients are interested in online advertising — and we dare you to find one who isn’t — you’ll want to read the latest.

BCP staff first looked at this issue in 2002 and published guidance analyzing search engine results through the lens of Section 5.  A summary of staff’s message back then:  There’s a potential for deception unless search engines clearly and prominently distinguish advertising from natural search results.

But what about now?  One concern staff raised in today's letter is that the ways some search engines currently differentiate ads from natural results may be less noticeable to consumers.  For example, you know those "top ads" — the paid results located at the very top of the page in a shaded box?  Those boxes appears to be getting fainter.  And according to one online study cited in staff’s letter, nearly half of users didn’t recognize them as distinct from natural search results.

Another development:  results that integrate or offer specialized search options as part of the service — say, by allowing users to narrow their search to categories like news, images, local businesses, etc.  Sometimes those searches are just another way of presenting natural results.  But other times the results are based at least in part on payments from a third party to the search engine company.

In addition to putting the issue in context with other staff guidance on digital marketing, the letter emphasizes that truth and transparency remain fixed stars in the advertising galaxy:

Although the ways in which search engines retrieve and present results, and the devices on which consumers view these results, are constantly evolving, the principles underlying the 2002 Search Engine letter remain the same:  consumers ordinarily expect that natural search results are included and ranked based on relevance to a search query, not based on payment from a third party.  Including or ranking a search result in whole or in part based on payment is a form of advertising.  To avoid the potential for deception, consumers should be able to easily distinguish a natural search result from advertising that a search engine delivers.

The letter goes on to emphasize the “importance of distinguishing advertising from natural results in a clear and prominent manner.”  Certainly, advertisers have flexibility in how they accomplish that — “Any method may be used, so long as it is noticeable and understandable to consumers” — but what matters is consumer perception.

One key consideration:  prominent visual cues that distinguish ads from natural search results.  But the shading used to identify ads has become less visible over the years.  At the same time, customized settings on computers and mobile devices can make that box even harder to see.  Therefore, staff recommends that search engines differentiate paid results with more prominent shading, a prominent border to set it off — or both.

Text labels can play a role, too.  The letter offers insights into how the choices search engines make about placement and wording can affect consumer comprehension.

What about new search platforms?  Sure, business models are evolving and who knows how consumers will use search engines in years to come.  But "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."  Where can advertisers go for more guidance?  The staff letter suggests the recently revised .com Disclosures:  How to Make Effective Disclosures in Digital Advertising.



GREAT JOB! Expand this effort to include Domain Name System providers on the Internet who poison DNS lookups with their own replies instead natural search results. Same thing and they also need to be held accountable to natural search results as "search engines" are.
Lets make an effort to curtail all this unwanted adverts, they are not only unwanted but the vast majority of them overtake your search and until you press or click to close and change your natural search, they will linger in your screen for ever. make them appear on bright red or yellow and easy to overcome, also an easy option to opt out and never receive this type of ad from same advertiser again in the future.
How does the letter address self-advertising by search engines? This would be a situation where links to the engine's other content are presented in organic results without labels and yet the links would not appear on their own through normal organic ranking. There would be no third-party payments in those situations. The current draft Google commitment to the EU addresses this for Google review links (see at pages 1-3 of the appendix illustrating implementation of paragraph 3 of the commitments). How does the new guidance apply to this case?
I agree with Raleigh above. We help large and small businesses with their online marketing, and there is a tremendous amount of stress for small businesses that cannot rank for their exact business name URL. The small business owner's view is that it is their branded name, however that alone does not keep larger websites from optimizing pages to outrank the small business owner, which in turn FORCES them to purchase online advertising for their own business name.

FTC, maybe it's time to take a look at this again? There is now almost no visual distinction between paid and organic search results in Google.

It's REALLY time to take a look at this again. There is almost no visual distinction whatsoever between ads and organic search results in Google now. The "Ad" label is the same size and location as the icons from organic searches, and looks just like a regular result.

Does the FTC actually care about consumers anymore?

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