Google Experiments With Paid Inclusion & Does “Promoted” Meet FTC Guidelines?

Just when you thought paid inclusion was finally dead with holdout Yahoo getting out of the space, it’s come back from the most unlikeliest of sources: Google. Below, a look at the experiment plus reexamining the FTC’s guidelines about disclosing paid ads. Does saying “Promoted Videos” on YouTube rather than “Sponsored Videos” meet these?

For those unfamiliar with paid inclusion, it is where advertisers pay to have their listings included within editorial results, rather than being listed separately from them as paid placement search ads. In paid inclusion, there’s also no guarantee that the ads will show in a particular position.

Paid inclusion is a dinosaur left over from the days when you had companies that would sell a search partner only editorial results, leaving it to that partner to outsource with someone else for paid listings. For example, Microsoft once had its search engine using editorial results from Inktomi and paid results from Overture. It is also a remnant from before the days when search ads generated so much revenue that there was no need to deal with “messy” paid inclusion.

Messy? Sure. Yahoo would tell the world how fresh and complete its index was. Yet to site owners, it would pitch paid inclusion as a way to ensure that your pages were getting regularly visited by its spider or not overlooked entirely. It’s also messy to explain to searchers that these paid listings integrated into editorial results aren’t “ads” simply because they weren’t guaranteed to rank.

Paid inclusion is so messy that Google’s founders took an extraordinary step of speaking out against it in their IPO registration document of April 2004 several times. I’ll come back to those statements, but let’s look at what’s happening on Google now

The folks over at Range Online Media spotted new ads that are integrated directly within shopping results. Below are some screenshots they also provided me:

The arrow points to the ads. Here’s another example:

Here’s a close-up of the ad integration:

I can’t see these, when I look at the same pages, such as here. That’s because it’s an experiment that Google confirmed to me is being shown only to a small number of people. These are also separate from the other Google Product Ads rolled out this month to everyone.

I asked about these being paid inclusion. In response, I was sent:

At Google, ads are always labeled to indicate that the information is sponsored. We’re currently running a test in which Product Listing Ads appear on the Google Product Search page when a user clicks to ‘Compare Prices.’ Like the product listings, these ads provide information such as prices and ratings, so when a user sorts the information, the list changes the order of both the listings and the ads. As always, the ads are labeled as advertisements, and this experiment is intended to help us understand whether this is a useful experience for our users. This feature is currently in a limited beta with a small number of U.S.-based advertisers, and as with all tests, we may make changes to our current experiment in the future.

Wow. That made me feel more than ever this was paid inclusion. See, even though there’s an ad label attached to the listings, the fact that they are integrated within editorial results themselves rather than being segregated from them is one sign. In addition, if you can sort the results, then the ads have no guaranteed placement, which again is a core element of paid inclusion.

Now let’s go back to what Google’s founders said about the practice in the IPO papers (I’ve bolded key parts):

Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating.

And:

We will do our best to provide the most relevant and useful search results possible, independent of financial incentives. Our search results will be objective and we will not accept payment for inclusion or ranking in them.

And:

Objectivity. We believe it is very important that the results users get from Google are produced with only their interests in mind. We do not accept money for search result ranking or inclusion. We do accept fees for advertising, but it does not influence how we generate our search results. The advertising is clearly marked and separated. This is similar to a newspaper, where the articles are independent of the advertising. Some of our competitors charge web sites for inclusion in their indices or for more frequent updating of pages. Inclusion and frequent updating in our index are open to all sites free of charge. We apply these principles to each of our products and services. We believe it is important for users to have access to the best available information and research, not just the information that someone pays for them to see.

And:

Froogle [the name for Google Product Search back then] enables people to easily find products for sale online…. Most online merchants are also automatically included in Froogle’s index of shopping sites. Because we do not charge merchants for inclusion in Froogle, our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased. As with many of our products, Froogle displays relevant advertising separately from search results.

At best, Google could excuse the current experiment from being paid inclusion by saying that these advertisers are not being charged to be included. That if they want to be in those listings, that’s free if they put in product feeds. But paid inclusion overall was rarely pitched as a way only to be included. It was pitched as a way to guarantee fast inclusion and constant updates. And the unspoken benefit was that it put you right in the mix of the regular results.

When I spoke further with Google about the move, the company stressed that the ads all have ad disclaimers and that the testing will also look at putting the ads outside the regular results and also may not allow for sorting. What you see above isn’t final, by any measure.

Certainly the ad disclaimer helps, but as long as they’re integrated right in the regular results, with sorting, that’s paid inclusion in my book. It’s also paid inclusion according to the Federal Trade Commission, from its definition in 2002 (again, I’ve bolded the key part):

Paid inclusion can take many forms. Examples of paid inclusion include programs where the only sites listed are those that have paid; where paid sites are intermingled among non-paid sites; and where companies pay to have their Web sites or URLs reviewed more quickly, or for more frequent spidering of their Web sites or URLs, or for the review or inclusion of deeper levels of their Web sites, than is the case with non-paid sites….

In a related matter, I asked why YouTube’s “Promoted Videos” aren’t called “Sponsored Videos,” as they once were. “Sponsored” has been the search industry’s term-of-choice when it comes to indicating what’s an ad. It’s used by Google, Yahoo and Bing, and it was a word the FTC particularly seemed to like when it issued guidelines.

Google emailed me:

Whenever a Promoted Video appears on YouTube, it is marked as a ‘Promoted Video’ to indicate that it is an advertisement. This label is hyperlinked to the YouTube Glossary, which offers more information about the Promoted Videos advertising program.

OK, I knew that. But these were called “Promoted Videos” originally, then changed to “Sponsored Videos,” then changed back to Promoted, which to my ear doesn’t sound as ad-like. So why were they changed?

To that, Google noted a blog post from March saying:

We think “Promoted Videos” more accurately describes this program than “Sponsored Videos,” the original name.

I was also told that “Promoted” was determined to be more descriptive and appropriate.

Determined how? Google wouldn’t share that. So maybe there was some testing done to see if users understood that “Promoted” better explained that these are ads. Or maybe a product team decided “Promoted” got a better clickthrough than “Sponsored” because people did NOT realize these were ads.

Google has massively ramped up where and how it shows ads over the past year. As the company continues to grow, it also has people without a firm history of knowing why ads are separated from search results and why certain words have been used to indicate what’s an ad and what’s not. Calling something “Promoted” that’s an ad in one part of Google while it’s “Sponsored” in another isn’t consistent and generates confusion. Mixing ads into editorial results also potentially generates confusion. Neither makes me feel particular good, but hey, maybe that’s just me.