Google is introducing a new way of labeling sponsored ads that makes them almost indistinguishable from organic search results. Instead of marking each ad individually as “sponsored,” the entire ad block is labeled—creating a design that blends seamlessly with the organic listings. For users, especially non-experts, it’s nearly impossible to tell the difference, as a new survey has shown.
Recently, Google has made several moves to keep users within its own ecosystem (for example, through AI Overviews and AI Mode), which has also led to a rise in so-called zero-click searches. This suggests that paid ads could increasingly be integrated in a more subtle way. Critics suspect a simple logic behind this: the less obvious the advertising, the more clicks and revenue for Google. But that raises an obvious question—can this even be done legally under European law?
The new design hasn’t been officially rolled out yet. In our research, we haven’t seen broader implementation so far. Still, the implications are clear: what could this mean for SEO and SEA? How should we approach ad placement in the future if paid listings become almost invisible among organic results?
In this Article
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Why Google Is Changing Its Sponsored Ads Label Design
Google is currently testing a new way of labeling paid ads that makes them almost indistinguishable from organic search results. Instead of tagging each ad individually with a label like “Ad” or “Sponsored,” the entire block of paid search results is now marked as sponsored. This means the visual distinction between organic and paid listings is becoming increasingly blurred.
The goal of this change is to “optimize” the user experience on search results pages by integrating ads even more seamlessly into the organic listings. In reality, Google aims to make its ads more appealing and, above all, increase the click-through rate on paid results—without explicitly signaling to users that they’re clicking on an advertisement. After all, Google only earns money when someone clicks on an ad, not on organic results.
For advertisers and agencies, this raises an important question: how should they respond? If the visual difference between ads and organic results continues to fade, SEO strategies may need to adapt to maintain visibility. SEA strategies could also be affected, as the performance of paid ads in such a subtly designed environment will have to be reassessed.
Despite these tests, it’s still unclear whether this change will become a permanent feature in Google’s SERPs. For now, it appears to be a limited experiment. However, this development clearly shows that Google is pushing forward in optimizing its ad platform to generate even more revenue—always with the goal of strengthening its dominance in the search ecosystem.
Legal Framework for Google Ads in the EU and Germany
Google’s new ad labeling approach isn’t just a shift in online marketing—it could also raise legal concerns, particularly regarding EU regulations on consumer protection and advertising transparency. While it’s impossible to predict how specific laws will be applied or what conclusions courts might ultimately reach, it’s worth taking a closer look at the key EU rules that require clear and transparent identification of advertising.
Digital Services Act (DSA)
The Digital Services Act (DSA) aims to make online platforms and services safer and more transparent. Of particular relevance here is Article 26, which regulates advertising on large platforms like Google. The DSA requires that all advertising be presented in a clear, concise, and unambiguous way so that users can easily recognize it as such—protecting consumers from misleading practices.
Key points from Article 26 DSA:
Clarity of advertising: Each individual ad must be designed so that users can clearly recognize it as advertising. This includes the obligation to use visual elements that distinguish ads from surrounding content.
The law leaves little room for interpretation. Article 26(1) explicitly states that providers must ensure “for each specific advertisement” that users are able to identify that the information they are seeing “is an advertisement.”
This phrase—“each specific advertisement”—could prove especially significant in this context. In Google’s case, it may imply that not only the overall block of paid ads should be marked as “sponsored,” but that every single ad within that block must be clearly recognizable as advertising.
This potentially conflicts with Google’s current test design, in which only the entire ad block is labeled, rather than each ad individually (as was previously the norm). As a result, the distinction between organic and paid listings becomes much less apparent, potentially violating the DSA’s requirement for explicitness and clarity. A consumer-friendly court could very well interpret it this way, considering a recent survey by Search Engine Roundtable has actually shown people having problems distinguishing ads from organic results.
It may very well be, however, that a judge might consider the new layout to be transparent enough. It stays interesting.
Penalties: Violations of the DSA can have serious consequences. Failure to comply with transparency requirements can result in fines of up to 6% of a company’s global annual revenue.
Unfair Commercial Practices Directive (UCPD)
The EU’s Unfair Commercial Practices Directive (UCPD) was created to protect consumers from misleading advertising and harmful business practices. It stipulates that commercial communication (i.e., advertising) must be clearly and unmistakably identifiable as such, ensuring that consumers are not deceived or misled. In the case of Google Ads, Article 7(2) and Annex I Nos. 11 and 11a are particularly relevant, as they provide explicit requirements for the recognizability of (online) advertising.
Article 7(2) UCPD: Misleading Omissions
- This article defines a misleading omission as a situation in which the commercial intent of an advertisement is not made clear—if, as a result, “this causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.”
- If paid ads are not clearly labeled as such and users are unaware that they’re viewing advertising, this could be considered a misleading omission. In such a case, the commercial intent is obscured, potentially deceiving consumers.
- If Google designs its ads in a way that makes them visually indistinguishable from organic results, users may not realize that they are clicking on paid advertisements. That is precisely what Article 7(2) aims to prevent: users must always be able to recognize when content has a commercial purpose.
UCPD Annex I Nos. 11 and 11a
Annex I No. 11 of the UCPD prohibits “hidden advertising”—the blending of commercial and editorial content where the commercial intent is not clearly identifiable. In concrete terms, this means that paid advertising may not be presented in a way that gives the impression of being organic or editorial content.
Annex I No. 11a specifically addresses paid search results, requiring that any financial payments leading to higher ranking positions in search results be “clearly disclosed.” This is directly relevant to Google Ads, where advertisers pay to have their listings appear in top search positions. If these ads are not clearly marked as advertising, this could constitute a violation of Annex I No. 11a of the UCPD.
German UWG (Implementation of the UCPD)
The UWG (German Act Against Unfair Competition) transposes the UCPD into national law. Particularly relevant are the rules on “advertising disguised as information” and “concealed advertising in search results,” which are outlined in Annex Nos. 11 and 11a of the UWG.
- Annex No. 11 (“advertorials”): Paid advertising may not be disguised or hidden by making it look like editorial content unless its commercial nature is clearly recognizable.
- Annex No. 11a (“covert advertising in search results”): Search results must clearly disclose when payments influence ranking positions. Such paid placements must be explicitly identified as advertising.
Note: These two provisions are essentially identical to those in EU law; the UWG simply translates the UCPD’s requirements on misleading and covert advertising into German legislation.
Under the UWG, competitors and consumer protection associations in Germany can issue cease-and-desist warnings (Abmahnungen) if they believe a company is violating the rules against misleading advertising. If Google were to design its ads in a way that fails to make their commercial nature sufficiently clear—effectively amounting to hidden advertising—competitors or other affected parties could initiate legal action and seek injunctions.
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Impact on SEO and SEA: What Google’s New Ad Labeling Means for Businesses
Google’s latest tests for ad labeling—marking an entire block of paid results instead of labeling each ad individually—are likely to have significant implications for companies relying on SEO and SEA. This change could affect both the visibility of organic search results and the performance of paid ads.
Impact on SEO: Reduced Visibility for Organic Results
A core goal of SEO is to maximize the visibility of organic listings and the free traffic they generate. As Google continues to blur the line between organic and paid results, this will directly influence organic rankings and click-through rates. With the new labeling test, the prominent placement of paid ads could push organic results even further down the page.
What does this mean for your SEO strategy?
- Fewer clicks on organic results: Since paid ads are becoming less distinguishable and appear almost like organic listings, click-through rates (CTR) for organic results could drop—reducing overall visibility in the SERPs.
- Focus on long-tail keywords: To maintain visibility in an increasingly competitive environment, it may be wise to focus on long-tail keywords. These are often less competitive and allow you to target niche segments more precisely.
- Stronger competition for top organic positions: As paid ads occupy more space at the top of the search results, competition for top organic rankings will intensify. It’s crucial to ensure that your on-page optimization and content quality are top-notch.
Impact on SEA: A Shift in Campaign Strategy
The change in ad labeling will also have direct consequences for SEA. Labeling an entire ad block as “sponsored,” rather than each ad individually, could alter user behavior and the visibility of paid ads.
What does this mean for your SEA strategy?
- Higher click-through rates for ads:
Because paid ads now look more like organic results, click-through rates (CTR) could rise. Advertisers may benefit from this subtler labeling, as users might click on ads more often without realizing they’re paid placements. - Adjusting bidding strategies:
In a landscape where paid ads are less visually distinct, you may need to refine your bidding strategies (like we did with JOIN) to maximize CTR while keeping cost-per-click (CPC) under control. More precise audience targeting and creative optimization will become increasingly important. - Ad copy matters more than ever:
In search results where ads are harder to distinguish from organic listings, compelling ad text becomes critical. Clear, persuasive calls-to-action can help ensure that users still understand your ad’s intent and choose to engage with it.
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Conclusion on Google Ads: Much Is Still Unclear, but Preparation Is Everything
The changes Google is testing for ad labeling raise important questions. While this is currently just a limited experiment, it’s entirely possible that Google could roll out this new labeling approach more broadly in the future. For now, it remains uncertain whether that will actually happen, how users will respond, and what legal consequences it might have for Google.
A major point of uncertainty is whether legal challenges will follow. If Google does proceed with this redesign, it could trigger legal disputes, as the transparency requirements for paid advertising may not be fully met. It remains to be seen whether competitors or consumer protection organizations will file complaints—or whether this could even lead to court cases.
So why is it worth thinking about these changes now? Because the future of online marketing—especially SEO and SEA—could be significantly shaped by them. Even though the legal framework is still evolving, it’s highly likely that Google will adjust its advertising practices over time. By preparing for possible scenarios today, you can ensure that your marketing strategies remain effective in a changing ad environment.
As an SEO and SEA agency, we know how essential it is to stay flexible and proactive. Preparation is everything—whether that means adjusting SEA campaigns, optimizing SEO strategies, or ensuring legal compliance—to make sure your business not only adapts to change but stays competitive for the long run.
Get ready for the unexpected: While many questions remain unanswered, a proactive approach—through adapting SEA strategies, refining SEO efforts, and securing legal compliance—will help you stay agile, resilient, and competitive in the evolving world of digital advertising.
FAQ: Google’s New Sponsored Ads Label
Why is Google testing the new ad labeling?
Google is testing the new ad labeling to “enhance the user experience” and increase the click-through rate on paid ads. The current experiment subtly shifts from labeling each individual ad as “sponsored” to marking the entire block of paid results instead. This blurs the line between paid and organic search results, making it harder for users to tell the difference. The underlying goal is clear: to generate more clicks on paid ads without explicitly signaling to users that they’re engaging with advertising.
How does the new ad labeling affect SEO?
The new labeling could negatively impact the visibility of organic search results. Paid ads may take up more space on the page and visually blend with organic listings, which could lead to a drop in organic click-through rates (CTR). As a result, SEO strategies will need to focus more on long-tail keywords and user experience to remain competitive in an environment where ads are less distinguishable from organic results.
