On Google Earnings Call, Google Ignores FTC Definition Of “Paid Inclusion”

On its earnings call today, an analyst asked Google about the new paid inclusion model for Google Shopping. The analyst got corrected. Google doesn’t call what it’s doing paid inclusion, he was told. That’s because Google is comfortable continuing to ignore the US Federal Trade Commission’s definition of what “paid inclusion” is. It’s yet another example that the search engine industry doesn’t really care about the FTC’s search engine guidelines.

Definitions? We Don’t Need No Stinkin’ FTC Definitions

I’ll update this story with the extended quote after the earnings transcript goes live later. But when asked about “paid inclusion,” Google senior vice president Susan Wojcicki said:

We actually don’t refer to this as paid inclusion … [paid inclusion means] putting paid things into the search results in a non-marked way.

That’s not what paid inclusion means. It wasn’t what paid inclusion meant when Google first fought against it years ago, when it was a common practice in the industry. It’s not the definition that the industry itself used, nor that the FTC used, when it drafted its disclosure guidelines about paid inclusion.

Paid Inclusion Doesn’t Mean Failure To Disclose

My previous post, Once Deemed Evil, Google Now Embraces “Paid Inclusion”, explains in depth what paid inclusion was, Google’s opposition to it and the FTC’s still current definition. Let’s look at that again:

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.

Paid inclusion listings are subject to disclosure guidelines but they are not defined by a lack of disclosure. Paid inclusion is defined as payment for inclusion in search listings. Period.

Google Is Doing Paid Inclusion….

That is exactly what Google has been doing with some search properties over the past year, charging to be listed within them outside the usual ad areas. That’s precisely what it is doing with Google Shopping, using a paid inclusion model.

So why doesn’t Google just use that term? Why is Google unilaterally trying to redefine a term that was long used in the industry and core to disclosure guidelines created by a US government agency?

And Is Embarrassed About It (So Change The Meaning!)

That’s easy. It’s embarrassing. As I said, Google used to be fiercely opposed to paid inclusion, to the point of even putting it under the “evil” heading of things it would never do. It touted in 2004 that by NOT having paid inclusion, its shopping search was better:

Because we do not charge merchants for inclusion in Froogle [what's now Google Product Search and soon to be called Google Shopping], our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased.

But in 2012, we’re now told by Google — repeatedly — that having a commercial model will produce better shopping results. What was evil overnight becomes good, as well as a nice new revenue source for Google.

Is Anyone Home At The FTC?

Google feels comfortable ignoring the FTC’s definition of paid inclusion, if it’s embarrassing to the company. Nextag feels comfortable not only ignoring the required disclosure of paid inclusion (which at least Google does) but also attacking Google on consumer transparency grounds.

These twin events in recent weeks are why I wrote to the FTC asking if it even considered its guidelines to be relevant, as well as if it felt the industry was living up to them.

Last week, I wrote how after a month, the FTC had given no response. Meanwhile, the search engine industry seems happy to continue ignoring the FTC’s definitions and guidelines. That’s not a situation you’d think a regulatory body would like to have continue.

More background on these issues is below:

Related Topics: Channel: Industry | Features: Analysis | Google: Business Issues | Legal: Regulation | Top News


About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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  • http://www.facebook.com/MarkWelchMktg Mark Welch

    Wow, the FTC hasn’t responded to you after a month? Huh?

    You didn’t really expect any response, did you? Did you allege that Google was doing something illegal under existing law or FTC regulations? (Even if you did, I expect that 99% of such complaints are blackholed anyway — but if you just want the FTC to comment about Google flouting its definitions, you’re wasting your breath.)

  • http://www.facebook.com/the.nathaniel.bailey Nathaniel Bailey

    The industry should have seen this coming long before google announced
    it because lets face it, google is like any other company leading a
    market, they are out to make more money, and who can blame them, that’s
    what all companies are out to do, make as much money as they can even if
    it is against some US guidelines which not everyone will agree with.

    But at the end of the day guidelines are just that guidelines, not rules
    (check the definition of guidelines). So if the FTC is simple giving
    guidelines for the search industry I’m sure there aint a lot that can be
    done about google wanting to do paid inclusion for its product

    I’m not saying I agree with it, I’m just noting what people should
    already know and should have seen coming at least last year because
    google basically owns the search industry and can do anything they want
    because people/companies don’t want to lose the traffic, sales and
    conversion they gain from google!

  • http://twitter.com/dancave dancave

    At the risk of being flamed… could it have been that someone at Google got it wrong in the first place when they labeled paid inclusion as evil, and now someone smarter, as well as more business minded perhaps, has seen that ‘Disclosed Paid inclusion’ can actually bring better results as well as more money?

    I hope that the ’Disclosed Paid inclusion’ development removes some of the lower quality feeds as only people who are taking there marketing seriously will entertain putting budget behind there feed… I’m just putting that out there.

    Personally I will not benefit from this  ’Disclosed Paid inclusion’ because i will now be charged for what i used to get for free, so my ROI will plummet. But that’s just the way it is, its a dog eat dog world out there. Introducing a free service to build up a following and then charging for it is not new or innovative business practice, its as old as time, and if you didn’t see this coming you probably need to start looking into the marketing future for all your channels today.

  • Durant Imboden

    “Paid inclusion”? There’s a simpler word for the Google Shopping results: “ads.”

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