Advertising Law Alerts

July 1st, 2013

Distinguishing Advertising from Search Results

As part of its ongoing effort to provide guidance to digital advertisers (including the recent release of the updated digital advertising guidance, "dot.com Disclosures: How to Make Effective Disclosures in Digital Advertising"), staff at the Federal Trade Commission's ("FTC") Bureau of Consumer Protection recently sent a letter to search engine companies, including Google, Bing, Yahoo! and various shopping, travel and local business search engines. The letter reiterated the importance of distinguishing advertising from natural search results in a clear and prominent manner, and provided new guidance on how search engines can best achieve such clarity.

This is not the first time the FTC has examined this issue. In 2002, the FTC published a letter advising search engines about the potential for consumers to be deceived, in violation of Section 5 of the FTC Act, unless the search engines distinguished sponsored search results from non-paid results with clear and conspicuous disclosures. See Letter from Heather Hippsley, Acting Associate Director for Advertising Practices, to Gary Ruskin, Executive Director of Commercial Alert.

The FTC indicated that, after issuance of the 2002 letter, many search engines followed the FTC's suggested guidance. The FTC said that it believes that, since then, there has been a decline in compliance.
Key recommendations from the FTC staff's letter include:

  • Search engines must ensure that any labels and visual cues used to distinguish advertising from natural search results are sufficiently noticeable and understandable to consumers.
  • In distinguishing 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. 
  • In addition to the visual cues a search engine may use to distinguish advertising, paid search results should have a text label that: (1) uses language that explicitly and unambiguously conveys whether a search result is advertising; (2) is large and visible enough for consumers to notice it; and (3) is located near the search result (or group of search results) that it qualifies and where consumers will see it.
  • Because consumers may not notice labels in the top right-hand corner of the shaded area or "ad blocks," search engines should place any text label used to distinguish advertising results immediately in front of an advertising result, or in the upper left-hand corner of an ad block, including any grouping of paid specialized results, in adequately sized and colored font.
  • Any cues used to indicate that search results were sponsored by an advertiser must be "sufficiently visible on both mobile devices and desktop computers."

Based on the FTC staff's recent guidance, search engines should review their sites and make any necessary adjustments to ensure that they are clearly and prominently disclosing any advertising content. Additionally, the FTC has made clear that disclosure techniques used for advertising should keep pace with innovations; as technology changes and improves, so should any necessary disclosures.

While the staff letter is directed to search engines, and only addresses search results, it may signal FTC's broader concern in ensuring that consumers understand the difference between advertising and other content, a concern that also underlies the FTC's 2009 revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising. For marketers experimenting with "native advertising" and other new approaches to presenting both content and advertising, "transparency" is likely to be the watch-word in the coming months.

If you have any questions about this alert, or about any other advertising law issues, please contact Terri Seligman at (212) 826 5580 or tseligman@fkks.com, Jeffrey A. Greenbaum at (212) 826 5525 or jgreenbaum@fkks.com, Hannah Taylor at (212) 705 4849 or htaylor@fkks.com, or any other member of the Frankfurt Kurnit Advertising, Marketing and Public Relations Group.