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In Search Of Transparency In Free Vs. Paid Listings

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Nearly 50 percent of Internet searchers cannot distinguish paid search ads from organic search listings on a search engine results page (SERP), according to an SEO Book Survey. This lack of transparency is a concern that the U.S. Federal Trade Commission (FTC) would like to see remedied.

The Search Engine Marketing Professional Organization (SEMPO) shares the FTC’s concern, and in fact, suggested last fall that the FTC consider an update to its 2002 guidelines for search engines regarding the transparency of paid and earned results. Likely among SEMPO’s motivations is its desire to maintain the unregulated status of search and search engines. If search engines are seen as not protecting consumers from deceptive advertising practices, then the threat of government regulation of search could grow.

In June, the FTC’s Consumer Protection Division did in fact issue an update to its 2002 guidelines. In a letter to general search engines (which included AOL, Ask, Bing, Google, Yahoo and others), as well as 17 of what the FTC called “the most heavily trafficked” shopping, travel and local search engines, the FTC offered updated guidance around the need for visual cues, labels, or other options for clearly distinguishing paid ads from organic search results, in order to avoid misleading consumers.

What Does this Mean for Paid-Submission Directories?

Often, businesses can claim a free basic business listing in an online directory, with the option to upgrade for a fee. Do the FTC’s guidelines apply to these paid submissions?

The FTC says its guidance is offered as a general recommendation. It expects each search engines to determine how to apply it, with the ultimate goal of ensuring consumers clearly understand the role payment plays in search results. Considering the underlying spirit of the FTC’s guidance, it would seem this could extend to paid directory listings.

Among the considerations is the role of data providers such as Neustar/Localeze, Axciom, Infogroup and Factual. Some of these providers are paid for their data by directory publishers, and some of them pay directories for their data. Each relationship is different.

How should the directories represent these listings in order to comply with the new spirit of the suggested guidelines? Should the only distinction be whether the business itself paid to have a listing, in which case, the data aggregators and the directories need to add a variable that conveys that distinction for each record and is shown to each website user?

Clearly, the question around the transparency of paid versus free listings leads to more questions and likely complex solutions. How the FTC’s guidelines develop into best practice is still unclear and there remains a significant amount of uncertainly in the local listings space overall. There is only one constant and that is for everyone involved to expect change.

Image: Yellow Pages Search — Original Billboard Image from Shutterstock

About the Author

Gideon Rubin is CMO of Local Market Launch, the Santa Barbara-based startup that is driving new standards of quality in business listings management and local presence solutions for national brands, multi-location businesses and SMBs.

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