Google Blurs The Line Between Paid & Unpaid Results Again

Google has a new program that allows local businesses to get paid listings that appear within what’s known as the 7-pack of local listings. But do those listings violate the Federal Trade Commission’s guidelines about proper disclosure of paid search ads? Probably not, but they do seem confusing.

The New York Times had a good article about the program this weekend, These Battle Lines Are Drawn In Yellow. We also covered the program’s launch earlier this month in our own article, Google New Local Ad Category Invades The “7 Pack”.

So what’s the problem? In The Trouble With Google’s Yellow Pages Experiment from Silicon Valley Watcher, Tom Forenski, notes:

Prior to this, the results were separated. Sponsored links were always on the right, and the main search results were ‘organic,’ they were listed on how relevant they were to the query — not because of payment.

Actually, Google’s been mixing the line between paid and unpaid results for several months. I’ll get into the past history, but let’s see what’s happening with this particular program. Here’s a search for skateboards in houston:

Look at the top result, for Kingpinz.com. You’ll see that there’s a little “Sponsored” disclaimer that appears just below the listing. Here’s a close-up:

Now is this a change from Google’s past practices of keeping the unpaid and paid results distinct? To some degree, not at all.

Tom says that Google has always put unpaid “organic” results on the left of the results page and paid ads on the right. That’s not true. Google, since it ran its very first paid search ads back in 1999, has had paid ads that have appeared “inline” or directly above unpaid results. You can see this in plenty of searches today, such as this one for income taxes:

In the example above, you can see ads for Turbo Tax and H&R Block appearing directly above the unpaid listing for the IRS. There are also paid ads to the right.

Does Enhancing A Unpaid Listing Make It Paid?

Of course, with the new local program, the entire listing is not highlighted in yellow, to better delineate it from the unpaid listings. I haven’t talked to Google about this yet — I or someone from Search Engine Land will follow up more on this — but I’m guessing the entire listing isn’t highlighted because the listing itself is free.

If you review the program’s information, you’ll see that business listings are free. The “enhancement” part only appears in conjunction with a free listing. If you don’t already show up naturally for free, then your further enhancement won’t be shown. And that enhancement doesn’t impact ranking, as we’ve reported before:

Google assured me, again, that there’s no impact on rankings from this. But it’s the first time to my knowledge that “ads” appear in the “7-Pack.” The program is also totally independent of Local Listing Ads, which are supposed to return at some point this year.

Indeed, here’s an example of an enhanced listing that doesn’t get top billing, for golf clubs san jose:

See listing G, for “The Golf Club at Boulder Ridge?” That’s an enhanced listing, but it doesn’t appear at the very top.

So on the one hand, Google’s long-standing goal to keep the clarity between paid and unpaid results seems in the clear. But then again, Tom clearly got confused — and I suspect others might, as well. “See, that listing is showing up for free, but that thing underneath, that’s an ad. Kinda.” That’s hard to explain.

That brings me back to some past history. In November, our Google Experiments With Paid Inclusion & Does “Promoted” Meet FTC Guidelines? article looked at how a new shopping program seemed to violate the FTC’s guidelines about paid inclusion, plus whether paid ads on YouTube used language that clearly identified those as ads, as the FTC requires.

Google’s response was that it felt things were in compliance. With these local ads, we’re checking and will update with any Google statement we receive. As a reminder, this is the FTC’s guidance about such paid ads, issued in 2002:

The staff is encouraging search engine companies to make changes to their paid-ranking search results to clearly delineate them as such, whether they are segregated from, or inserted into, non-paid listings. Factors to be considered in making such a disclosure clear and conspicuous are prominence, placement, presentation (i.e., it uses terms and a format that are easy for consumers to understand, and that do not contradict other statements made), and proximity to a claim that it explains or qualifies.

Personally, I don’t see the enhancements as ads. But I do see them as potentially confusing for consumers, and there’s nothing that explains more to a curious consumer about why that little yellow highlight below a local ad appears. As the very least, the word “Sponsored” could lead to more information.

Postscript: A Google spokesperson sent us a statement:

Enhanced listings are a new feature in the Local Business Center that enable business owners to let potential customers know what they think is most important or unique about their business. The feature enables LBC users to choose one of the following enhancements: photos, videos, website, coupons, directions, menu or reservations. We are currently running a limited trial of the feature in San Jose and Houston.

To be clear, enhanced listings have no impact on the ranking of LBC listings.

Enhanced listings are labeled as advertisements via Google’s “Sponsored” designation, 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 trial, and as with all tests, we may make changes to our current experiment in the future.