FTC advises Google, Yahoo, others to be clearer in labeling paid search results

The consumer group has laid out a set of recommendations in a letter sent to the companies

By Zach Miners, IDG News Service |  Internet

Searching online for something like "diet plans," or "Caribbean vacation," or of course "iPhone," is bound to present a slew of results, including ads. Now, the U.S. Federal Trade Commission wants search engines to display those ads more clearly.

In a letter to Google, Yahoo, Bing, Ask.com, AOL and nearly 20 other of the most heavily trafficked search engines, the government consumer agency is laying out a new set of principles for those companies to follow to better distinguish natural search results from paid search results.

The FTC describes its work as "an ongoing effort to ensure that its guidance for online advertisers stays current with changes in digital media."

Search companies were already advised in 2002 by the FTC's Bureau of Consumer Protection about the potential for consumers to be deceived, in violation of Section 5 of the FTC Act, "unless search engines clearly and prominently distinguished advertising from natural search results," Mary K. Engle, associate director at FTC's division of advertising practices, said in the letter.

Companies followed those recommendations in 2002, the FTC said, but since then "we have observed a decline in compliance with the letter's guidance," the group said.

"Top ads," or advertising that is located immediately above the natural results, may be partly to blame, the FTC suggests. The group cites a recent survey by the search strategies company SEOBook that found that nearly half of searchers did not recognize top ads as distinct from natural search results.

Results delivered by specialized vertical search options may also sometimes be based on payments from a third party, the FTC said.

Google does maintain a strict separation policy of ads and search results. On Google.com, results that appear in the middle of the page are never paid. But advertisements that appear on the right-hand side and sometimes at the top -- those links are paid and are always clearly marked as "ads," the company states on its website.

"Clear labeling and disclosure of paid results is important, and we've always strived to do that as our products have evolved," a Google spokeswoman said in an email.

"We have always been committed to providing a clear and transparent search experience for our users," a Yahoo spokeswoman said. "We welcome the FTC's guidance and are in the process of further reviewing it."

Microsoft's Bing division declined to comment on the letter.

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