FTC Updates Search Engine Ad Disclosure Guidelines

FTC LogoBack in 2002, the Federal Trade Commission (FTC) established guidelines for the various search engines to follow when it came to distinguishing to the users what results are paid for and what results are natural, or free, listings. This included paid advertisements, paid placements, and paid inclusion programs.

Surprisingly, it is taken over 10 years for the FTC to update these guidelines despite the vast changes that have occurred with search engines, their products, and how advertising is integrated.

Yesterday the FTC released updated guidelines for the search engine industry and how it distinguishes between advertising and natural search results. Particularly, the FTC believes that in recent years it has become less easy for consumers to recognize what is paid and what is not. Their primary objective is to ensure that advertising isn’t misleading consumers into believing they are natural search results.

The letters note that in recent years, paid search results have become less distinguishable as advertising, and the FTC is urging the search industry to make sure the distinction is clear.

One of their concerns is the fact that paid ads and ad blocks aren’t clearly shown to be paid advertisement, with the labels that have significantly smaller text, or that are more he then on the top right corner of an ad block as opposed to the left corner. They believe consumers may not note the reference to paid advertising when it is over on the right side.

We have observed that search engines have reduced the font size of some text labels to identify top ads and other advertising and often locate these labels in the top right-hand corner of the shaded area or “ad block,” as is the case with top ads. 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 use of shading ad blocks has often been used to differentiate between paid and unpaid listings. The most common example of this are the Google AdWords listings in the Google search results. However, the FTC has noticed that the background shading used by many search engines tends to be less visible when viewed on mobile devices and certain computer monitors.

We have observed that, increasingly, search engines have introduced background shading that is significantly less visible or “luminous” and that consumers may not be able to detect on many computer monitors or mobile devices. Reliance on this method to distinguish advertising results requires that search engines select hues of sufficient luminosity to account for varying monitor types, technology settings, and lighting conditions.

Instead, the FTC suggests that search engine should use prominent shading with a clear outline, a prominent border, or both.

Accordingly, we recommend that in distinguishing any top ads or other advertising results integrated into the natural search results, search engines should use: (1) more prominent shading that has a clear outline; (2) a prominent border that distinctly sets off advertising from the natural search results; or (3) both prominent shading and a border.

FTC also brings up social listings, such as the ones you see in Facebook’s Graph Search, or even Google+ influenced personalized results where some listings are displayed more prominently because of someone in that users personal network. If any of those listings are paid, with the FTC example of a listing for a recommended restaurant because the user’s contacts have enjoyed it, if there is any pay compensation for that being displayed in social results, it must be clearly noted.

With the popularity of voice activated search results, such as Siri, the FTC is also advising that if search results are delivered verbally, that there must be an audio disclosure to go along with it states it is a paid advertising, and that one the user can easily here and recognize as being paid ads.

The FTC knows that as search engines continue to evolve with different technologies to provide users with search results, but they also wants to ensure that any new ways of receiving or displaying search results in the future also include clear differentiation between paid and unpaid. Since the original letter in 2002, mobile and tablets have increased significantly, as well as types of platforms search engines use to display and promote information, such as mobile apps, social media and their own way of narrowing segments of search results, such as things like news results or blog search results. With this, the FTC wants search engines to follow these guidelines from the outset as they introduce new ways of displaying their results.

Online search is far from static, and continues to evolve. Indeed, in the past few years, the growth of social media and mobile apps, and the introduction of voice assistants on mobile devices, have offered consumers new ways of getting information. 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.

The FTC sent out letters to what they considered the primary general-purpose search engines, which includes AOL, Ask.com, Bing, Blekko, DuckDuckGo, Google, and Yahoo. They also sent out letters to 17 specialized search engines, ones that specialize in specific market areas of shopping, travel, and local businesses that also display advertising.

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