It appears to be search engine marketing month, first the FTC and now the NAD has also weighed in with a case of first impression over use of ad copy in paid search results. Like collecting postcards from our travels, we similarly have memories of NAD lessons in the online travel agency wars, including on sales pricing (click here for an early 2013 decision) and this adds to the set.
When searching for “flights from DC to Hawaii” (one of our personal favorites), companies bid for top placement in the sponsored search results. Favorable placement is based on not just the price the advertiser paid, but also the relevancy of the ad to the search. Ads that get more clicks have a higher relevancy rating. So in response to our query, we might see an ad for “Flights to Hawaii as low as $300. Sign us up!” Expedia challenged that CheapOAir was displaying the lowest price one could get to Hawaii from any airport not specifically from a DC airport. NAD agreed that this could be misleading to consumers and recommended that in search results listing specific prices CheapOAir display only prices available from DC to Hawaii. A more general claim of “cheap flights” would be held to lesser requirements.
Also in paid search ads, CheapOAir called out savings “off fees.” Expedia contended that the advertiser had inflated booking fees to the promise of savings and, therefore, was illusory. NAD concluded that it was appropriate to call out these discounts but only with more specificity to make clear the discount was off of booking fees and not fees in general since this could be misunderstood as discounts from airport or other mandatory fees.
So where does this leave an advertiser using a paid search? The Federal Trade Commission (FTC) has previously opined on how to appropriately clarify the hit is an advertisement rather than a native result. Now NAD is weighing in with its view that material terms of an offer promoted in a sponsored search box likely must include all material terms and clicking to find the details may not suffice. Like with banner ads, advertisers should take a hard look at whether their message really is amenable for use in the small real estate of a sponsored search box and seek to either provide a general teaser or find a way to succinctly tell consumers what they need to know before they click onto the site.