• by Wendy Davis  @wendyndavis, November 12, 2009

Executives from Google and Yahoo told the Food and Drug Administration on Thursday that its crackdown on sponsored links has, in some ways, resulted in search ads that are worse for both consumers and marketers.

"We continue to see the advertising," testified Yahoo's David Zinman, vice president and general manager for display advertising. "But we've lost the clarity and the transparency for the users."

Google's Amy Cowan, head of industry for health, agreed that drug companies' search ads were "more relevant, transparent and informative" before the FDA clamped down on search advertising this spring. Cowan added that click-through rates on such ads plummeted after the agency sent out warnings about sponsored search.

In March, the FDA told 14 large pharmaceutical companies that their search ads were misleading because the ad copy touted the benefits of drugs without also informing consumers about risks and contraindications. But critics of that move say that search ads have very tight character limits, which makes it virtually impossible to convey that a particular drug is a potential treatment while also alerting users to its drawbacks.

Drug companies immediately revamped their search strategies, both by curtailing the use of search ads and by revising the content of the ads. Now, when drug companies buy keywords to describe medical conditions, many no longer include the brand name in the ad copy or URL.

For instance, a Yahoo search for "high cholesterol" yields a sponsored ad titled "Cholesterol and Diet," with copy reading "Learn About a Cholesterol-Lowering Prescription Treatment Option" and the domain name High-Cholesterol-Rx-Treatment.com.

The landing page takes users to a branded site promoting Pfizer's Lipitor, but consumers have no way of knowing that without clicking through on the ad.

Zinman testified that this shift to generic ads that don't mention a brand name has created "a world where users have less transparency" because the ads deprive searchers of critical information about the landing pages.

He says that Yahoo would like to see the FDA issue guidelines stating that search ads' landing pages should contain all of the required safety information about the drug, but that the search ads themselves should not be required to carry that data. "We're making the case that the placement in search results shouldn't be treated as advertising in the traditional sense," he says.

Google proposed in its testimony that some search ads could include a "warning" line in which companies could include up to 62 characters' worth of information about contraindications and a link that consumers could click for more information.