Earlier quoted context omitted.
For one, when they started ads, they were not inline with the search results, and in brightly highlighted boxes. So it was easy to say, you know, we have ads, but they don't affect search results. Today they say the same thing, but nontechnical users can no longer distinguish ads from their organic search results.
Non-technical users can't read the bolded "Ad" in the top left? Ok, it's more subtle than before but it doesn't prey on the less sophisticated among us.
Last year they made a change that made them so indistinguishable to the untrained eye that even Google rolled them back: https://techcrunch.com/2020/01/23/squint-and-youll-click-it/ https://www.cnbc.com/2020/01/24/google-will-iterate-the-desi...
But no, generally, they don't notice that. Studies have been done demonstrating how few users can tell the difference between an ad and a search result. In one study, half of respondents "didn't spot" ads in Google search results at all: https://www.123-reg.co.uk/blog/seo-2/how-google-is-profiting...
That study was in 2013, when Ads were much more obvious in search results than they are today. By 2018, the statistic of people who couldn't identify search ads on Google was up closer to two-thirds: https://marketingtechnews.net/news/2018/sep/06/two-thirds-pe...