FTC: Search engines should label ads as paid or result content

Written by New York Times | Washington | Updated: Jun 27 2013, 06:26am hrs
Search engine companies should more clearly distinguish on their web pages between advertising, paid content and the results of an internet search, the US Federal Trade Commission told two dozen search engine providers.

The commission made the statements, which update guidelines first laid out in 2002, in a letter it sent to seven general search engine companies including Google, Bing and Yahoo, as well as to 17 specialised search sites that focus on travel, shopping and local businesses.

Saying that the commission has noticed a decline in compliance with its 2002 guidelines, Mary Engle, associate director for advertising practices, wrote that 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 cited a 2012 study by SEOBook, a search strategies company, which found that nearly half of searchers did not recognise top ads as distinct from natural search results. Top ads are advertisements that appear immediately above the list of search results.

Those ads are often set apart by background shading, to distinguish them from other search results. But the FTC said that the shading was often too light and failed to differentiate the ads from non-paid material. In addition, it warned, the formats used in one type of device say, desktop browser pages often did not work for different devices, like mobile smartphones.

Specialised search results for example, from a search engine that focuses strictly on one industry, like airlines or hotels are sometimes based at least in part on payments from a third party, the FTC said. If that is the case, it is also a form of advertising and should be identified as such to consumers, the agency said.

The issue came up during last years FTC investigation of Google, when other companies accused Google of displaying shopping results based not on what would best suit a customer, but rather on the potential return to Google. On Tuesday, Google said that clear labelling and disclosure of paid results is important, and weve always strived to do that as our products have evolved.