Pay Per Click | Advertising Proposals Could Affect Google, Facebook And Twitter

THE OFFICE OF FAIR TRADING (OFT) could impose restrictions on pay-per-click and social networking advertising that would affect Google and social networks, according to debt management company Cleardebt.

"The OFT considers that search engine sponsored links and online messaging forums which limit the number of characters are unlikely to be an appropriate means of providing consumers with sufficiently balanced and adequate information," the OFT guidance document reads.

The issue specifically relates to debt management firms' use of these forms of advertising, which the OFT considers inappropriate, but the proposed restrictions could easily be applied to other industries as well, causing a significant impact on commercial freedom. The credit industry is already being reviewed by the UK government over this issue.

In fact, the proposed clampdown on advertising mediums could even affect forums, blogs, and contextual advertising, which means that the majority of internet advertising would be off limits for debt management companies.

Andrew Smith, director of marketing and external affairs for Cleardebt and spokesperson for the Debt Resolution Forum (DRF) said, "The DRF believes that, as long as a licensee's search engine marketing is legal, that intellectual property and defamation laws are enough to ensure its proper use and any further restrictions would be a restraint of trade."

Since this issue seems to focus on debt management, it appears that the OFT is reacting to the rising debt that many people have, and is fearful that they could be sucked into debt management schemes that might not benefit them, on the basis of ads that give many promises but little information.

These concerns are understandable, but an advertising ban might be the wrong way to go about things, given the impact on freedom. Educating people about how to manage their debt seems like a far more reasonable, and more sustainable, option.

If these guidelines are implemented, and particularly if they spread to other industries, they could have a significant effect on companies dependent on advertising revenue, such as Google, Twitter and Facebook. 97 per cent of Google's 2010 revenue came from text ads on search results, which means Google will be watching the outcome of this decision very closely. µ