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FTC Warning to Google and Other Search Engines Could Spell Changes for Advertisers Most consumers can't differentiate between paid and organic search engine results, the FTC says. New practices could be on the way.

By Eric Siu

Opinions expressed by Entrepreneur contributors are their own.

Changes in the way search engines display advertisements and natural search results may be on the horizon. For business owners, that means the effectiveness of the ads they pay for to drive click-throughs might also be about to change.

This week, the FTC issued a warning letter to Google, Bing, Yahoo and more than 20 other specialized shopping, travel and local business search engines. The letter was in response to a recent survey called "Consumer Search Insights" which demonstrated that most consumers can't differentiate between paid and organic search engine results.

Search engines have relied upon guidance offered in the FTC's "2002 Search Engine Letter," which compels search engines to ensure that any paid ad or search ranking is clearly marked and distinguished from non-paid results. But as the business of search has evolved, the impact of social media, mobile apps, voice-assisted mobile devices, new types of specialized search results and a competitive search atmosphere has led to a blurring of the lines between paid and organic advertisements, the FTC contends.

Related: Penguin 2.0: What to Expect From Google's Next Search Update

Given the potential to confuse consumers, the new FTC letter requests that search engines:

  • Use more prominent shading with clear outlines or defined borders to distinguish advertising located immediately above the natural results and other ad results from natural search listings on both desktop computers and mobile devices.
  • Use text labels that explicitly and unambiguously convey that a given result is a paid ad.
  • Place text indicating that an ad block contains paid results on the upper-left hand corner, where it is more likely to be read by consumers.

The new FTC letter does not contain any mention of potential disciplinary action should the search engines fail to follow through on the organization's changes. But assuming that the search engines cited by the FTC do go on to make changes, businesses and consumer can expect to see some changes.

If you're an advertiser who drives website traffic through pay-per-click (PPC) ads, you may or may not see a small decline in your click-through rate (CTR) as paid ad listings become more obvious to search users. For this reason, it will be important for all PPC advertisers to monitor their campaigns and to implement other PPC best practices that can recapture any traffic that's lost.

If you're a consumer who uses search engines for personal purposes, you'll likely see improved demarcations between paid and organic results. This should make you more able to determine which results have been provided based on their merits and which ones have been purchased with ad dollars.

Related: A Look at Google's 200 Search Ranking Factors (Infographic)

Eric Siu

CEO, Single Grain. Founder, Growth Everywhere.

Eric Siu is founder of the A-player Hiring Blueprint, which teaches entrepreneurs how to hire top talent effectively. He also runs digital marketing agency Single Grain.

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