Since they're nearly indistinguishable from real organic search results, people click on them assuming the search engine found them the best result. This leads to two major problems:
1. Search ads are the primary source of malware and fraud on the Internet today. (Phishing emails are second.) Sites pretend to be other sites all the time, and to allow tracking and landing page behaviors, every major search ad provider allows ads to "lie" about the destination domain. So you may see an Amazon ad, it says it goes to Amazon.com, but actually directs through to realamazonlinkipromise.biz instead. Fraud's really profitable, so fraudsters win ad slots easily, and are adtech companies' best customers, so there's really little incentive to crack down on this.
2. Search ads use this placement as a form of extortion. If you run, say, Best Buy, you shouldn't have to buy search ads for "best buy", because obviously you're the best result. However, they have to, because if they don't, the search engine will sell ads to their competitors using their keyword, so people searching "best buy" get "Circuit City" as the top result instead. (Yes, I chose that reference in part because I don't want to shame any real current companies in this example for sleezy practices.) And since users click the top result (the ad), not the first organic result, Best Buy ends up paying for every click for every user who goes through Google/Bing/etc. to get to Best Buy.
The second reason is why browsers are so obsessed with combining the search and address bars: They want you to search "best buy" or "bestbuy" or etc. because that's ad revenue, whereas actually typing bestbuy.com nets Google nothing.
> 2. Search ads use this placement as a form of extortion. If you run, say, Best Buy, you shouldn't have to buy search ads for "best buy", because obviously you're the best result. However, they have to, because if they don't, the search engine will sell ads to their competitors using their keyword, so people searching "best buy" get "Circuit City" as the top result instead. (Yes, I chose that reference in part because I don't want to shame any real current companies in this example for sleezy practices.) And since users click the top result (the ad), not the first organic result, Best Buy ends up paying for every click for every user who goes through Google/Bing/etc. to get to Best Buy.
One thing to note is that the cost of the ad is based on the landing page relevance (and even more so for branded terms), and so in your example Best Buy would be able to buy the ad for the "Best Buy" keyword for pennies (a rounding error on their SEM campaign, I'm sure), while Circuit City would have to pay a whole bunch for the "Best Buy" keyword.
Given that, I don't mind it so much. It's a good way for a competitor to get their name out there, but it's not really a sustainable practice long term for them. There's built-in pressure favoring the incumbent on their own terms.
Bear in mind, Best Buy should pay zero pennies for each of the millions of people trying to reach their website. It's absolutely inexcusable for a search company, which also owns an ad company, and also happens to run the web browser everyone's using, to create a system that basically taxes all attempts to visit a business's website specifically.
Honestly, what Google and Microsoft and such are doing in this case is trademark theft. They are selling the search result for a trademarked name they don't own, and when the actual trademark owner wants to be found by their own name... they have to pay for it.
I don't know who is going to file the case, but sooner or later, someone should, because it's a slam dunk.
> every major search ad provider allows ads to "lie" about the destination domain.
This seems like the real problem, not search ads as a concept
> So you may see an Amazon ad, it says it goes to Amazon.com, but actually directs through to realamazonlinkipromise.biz
Just disallow that? Problem solved.
If you want yet another filter, only allow public companies or companies that have raised >10M on Crunchbase to advertise, and have them verify that they are really who they are by asking them to put some string of your choosing in their DNS records.
Sure, Google could disclose real advertisement destination URLs tomorrow if they wanted. But the marketers are their customers, and that would upset their customers quite a bit. Especially since a lot of their customers' entire purpose in paying for Google Ads is to exploit that particular feature.
1. Search ads are the primary source of malware and fraud on the Internet today. (Phishing emails are second.) Sites pretend to be other sites all the time, and to allow tracking and landing page behaviors, every major search ad provider allows ads to "lie" about the destination domain. So you may see an Amazon ad, it says it goes to Amazon.com, but actually directs through to realamazonlinkipromise.biz instead. Fraud's really profitable, so fraudsters win ad slots easily, and are adtech companies' best customers, so there's really little incentive to crack down on this.
2. Search ads use this placement as a form of extortion. If you run, say, Best Buy, you shouldn't have to buy search ads for "best buy", because obviously you're the best result. However, they have to, because if they don't, the search engine will sell ads to their competitors using their keyword, so people searching "best buy" get "Circuit City" as the top result instead. (Yes, I chose that reference in part because I don't want to shame any real current companies in this example for sleezy practices.) And since users click the top result (the ad), not the first organic result, Best Buy ends up paying for every click for every user who goes through Google/Bing/etc. to get to Best Buy.
The second reason is why browsers are so obsessed with combining the search and address bars: They want you to search "best buy" or "bestbuy" or etc. because that's ad revenue, whereas actually typing bestbuy.com nets Google nothing.