Caught Red-Handed — Illegal Search?

As predicted here recently, the search engines are again having to deal with questions on their business practices — particularly, the practice of accepting fees for improving listing rankings for certain advertisers.

It happened back in the mid-1990s, when Infoseek started an experiment to charge for top placement (killed due to user revolt). Now it seems to have drawn the attention of the Federal Trade Commission (FTC) — and worse, Ralph Nader.

Just to avoid confusion, I’ll start off by noting the difference between normal, run-of-the-mill banner placement and pay-for-placement (PFPL) listings. The PFPL is not like your normal banner buy; it’s when a site can get its URL listed higher in the rankings of the search engine’s results for particular keywords. Most people assume that those listings are ranked via a formula that attempts to determine relevance to the search criteria that the user provides. But some sites — a growing number — have added PFPL to their list of money-making schemes.

The search engines’ practices have shifted fairly quickly in the past year. When I first started putting together my textbook on Internet advertising late last year, I found that very few search engines were offering PFPL. I made mention of GoTo.com as an example of an exception. But then, a few months later, several people reading the drafts (they had lost bets) pointed out that nowadays more and more search engines were employing the practice. The chapter, as it will be printed next month, now paints a picture of a three-tier system among the search engines. Some don’t accept PFPL at all. Some do. And some have special “expedited” services to get your link listed faster, and perhaps more accurately, and perhaps even in a higher placement (wink, wink, nudge, nudge).

So it should surprise no one that an allergic reaction would develop to the spreading practice. Where it came from, though, did surprise me. The FTC complaint was filed by Commercial Alert, a Nader-related organization running a media campaign to point out the negative effects of advertising.

From its Web site: “Advertisers are engaged in a relentless battle to claim every waking moment, and what one executive called, with chilling candor, ‘mind share.'”

I don’t know about you, but being characterized as the controlling Big Brother figure for using marketing terms such as “mind share” makes me feel over-appreciated.

Specifically named in the complaint were MSN, Netscape, Direct Hit, HotBot, Lycos, AltaVista, LookSmart, and iWon. Commercial Alert alleged that posing paid listings as content is the moral equivalent of infomercials that are not adequately labeled as advertising — a practice the FTC has challenged in the past in broadcast media.

The release is an interesting combination of two very different things. Commercial Alert attempts to draw a connection between the search engine practices and negative yet ill-defined social consequences.

“Search engines have become central in the quest for learning and knowledge in our society. The ability to skew the results in favor of hucksters without telling consumers is a serious problem,” said Gary Ruskin, the executive director of Commercial Alert.

This may be an attempt to allude to another of the group’s media campaigns — the one in which it tries to get commercial content out of schools and libraries. The current campaign seems to suggest that since some Internet sites deal with information and education, it might make them more subject to regulation — a premise I personally find questionable.

Perhaps it’s just trying to build greater mind share for its other media efforts.

I called up Ruskin and quizzed him on the connection between the two issues. He confirmed that Commercial Alert was concerned with both the hidden ad issue and the issue of social implications of ads, but he said that the FTC complaint focused solely on the “deceptive practice” of hiding the advertising relationships. When asked if it would be fair to characterize his organization as anticommercial or anticorporate, he said, “No. We are just drawing a line… This far and no further.”

The group may, in fact, have a very valid point when it comes to the core of its complaint. This may be a deceptive advertising practice. It all hinges on one question: Are users being deceived into believing that commercial content is editorial content?

Most of these sites separate paid-for links with notations such as “Partner Sites” and “Featured Sites.” But does this constitute fair warning? I suspect the average Web user is smart enough to read “advertising” behind those words, but I also suspect that a very large minority does not.

In an Associated Press report published Tuesday, Microsoft responded to a reporter’s questions on the release by saying that MSN provides “compelling search results that people want.” Which is sort of like responding to the question “Did you chop down the cherry tree?” with “People like wood.”

Lessons learned:

  • Sometimes we get so involved in our own industry, we forget that we might be treading on the issues and concerns of other groups. This isn’t the 1st time (or the 10th time) the Internet advertising sellers have wandered across legal gray areas.
  • Those other interest groups can have a significant corrective impact on the ad industry.
  • This isn’t always a bad thing.

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