Guaranteed Results

Behind the Controversy

Not everyone, though, is happy with paid-placement arrangements. Commercial Alert, for example, a Portland, Oregon-based national nonprofit anticommercialism group, filed a deceptive advertising complaint with the FTC earlier this year against eight search engines for placing ads in their results without clearly indicating that they were indeed ads. "[They] look like information from an objective database selected by an objective algorithm. But really they are paid ads in disguise," the complaint states.

Named in the complaint are seven search-engine owners: AltaVista, AOL Time Warner, Direct Hit Technologies, iWon, LookSmart, Microsoft and Terra Lycos. Some of those companies' search sites refer to their paid links as "Featured Sites," as opposed to "Sponsored Sites."

"These search engines have chosen crass commercialism over editorial integrity," says Gary Ruskin, executive director of Commercial Alert. "We are asking the FTC to make sure that no one is tricked by the search engines' descent into commercial deception. If they are going to stuff ads into search results, they should be required to say that the ads are ads."

Ruskin says that by concealing the fact that such listings are really just ads, search engines appear to be violating the federal prohibition against deceptive acts or practices. This omission falls within a line of deceptive advertising cases, in which the FTC sought sanctions against companies caught hiding the fact that ads were ads.

Ruskin says not all search engine companies have adopted deceptive advertising practices. For example, Google clearly notes that its paid placements are "Sponsored Links," and it will not place paid ads within its search results.

Obviously, though, search engine companies believe their listings are labeled clearly enough-and they haven't stopped their paid placement practices. But in the opinion of industry expert Sullivan, "Some of the [search engines] could use less ambiguous language."

For now anyway, paid placement-even the kind not labeled as such-is still a legal way to promote your business. Should you use the technique? It's up to you.

Melissa Campanelli is a marketing and technology writer in Brooklyn, New York.

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Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at

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This article was originally published in the November 2001 print edition of Entrepreneur with the headline: Guaranteed Results.

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