Study Says Google, Yahoo And Bing Are Running 'Deceptive' Ads - And Regulators Are Doing Nothing To Stop It

Google, Yahoo and Bing were among 22 search sites told by US federal regulators last year that they need to start marking out ads more prominently in search results to protect consumers from unwittingly clicking on paid-for links. The companies have responded by doing - well, very little.

Paid-for search links generally appear to the right-hand-side and at the top of a search results page. They are usually headed with the words "ad" or "sponsored" and can appear in shaded boxes or below a border. But recently many of those borders have gone away and the labeling has become more inconsistent, according to a new study by Ben Edelman, an online marketing consultant who has previously worked to root out corruption at eBay. Now, disclosure text has become very small, and the shading very subtle, meaning users often don't realize they are clicking through to ads rather than the most relevant result for their query.

There is also the added complication of specialized search results, such as Google's Shopping section, where brands pay for Product Listing Ads that showcase images and the prices of a product.

A report in the Wall Street Journal also details how Google earlier this year even stopped placing colored shading around its search ads, leaving just a small yellow "Ad" label next to paid links, which makes it even harder for users to distinguish ads from natural results.

A Google search results page in 2010:

A Google search results page today:

A Bing search results page today

Bing

A Yahoo search results page today:

One consumer advocacy group, Public Citizen, told the WSJ "consumers are being tricked."

The result of the apparent non-action from search companies is that consumers are unknowingly clicking on ads, which is generating more money Google, Bing, Yahoo et al., the group said.

Search advertising is big business. It accounts for the bulk of internet advertising spend, and is projected to reach $55 billion in revenue worldwide this year, according to researchers at media agency Zenith Optimedia.

In June last year the US Federal Trade Commission (FTC)'s associate director for advertising practices wrote to 22 search sites warning them that they are failing to comply with the guidelines it set out in 2002. The FTC's associate director of advertising practices Mary Engle wrote in the letter that there had actually been a "decline in compliance."

Those guidelines state that search ads should be labeled "explicitly and unambiguously" and that they should be marked out with "prominent shading" or a border. Labeling should also be consistent, meaning Google and Yahoo are breaching the guidelines by flipping between "Sponsored" and "Ad" labels, for example.

The FTC was contacted by Business Insider for comment about whether it may take further action against the non-compliant search companies; this article will be updated when that is received.

Business Insider has also contacted Google, Bing and Yahoo to ask whether they plan to make changes to the way ads in search results appear to make it clearer to consumers that these links have been paid for by advertisers.