July 2, 2003, 12:00 AM

Consumers surprised about paid search practices, study says

Consumers Union’s Consumer WebWatch finds consumers have little knowledge of how paid search works–-but do consumers care? Search engines say consumers care more about relevancy than about how the results got there.

Consumer WebWatch, affiliated with the non-profit Consumers Union, publishers of Consumer Reports Magazine, has released findings from a consumer study in which participants demonstrated surprise and some confusion over paid listings on web search engines.

According to Consumer WebWatch, the 17 consumers in the study, conducted in March, were surprised that search engines are paid to list some results and sites more prominently than others. Participants also said paid listings were often too difficult to find on many search sites, and they were misled by the term “sponsored,” which many did not interpret as being open to advertiser influence. The study found most participants had little understanding of how search engines compile web pages and prioritize links on a results page.

Leslie Marable, research project manager at Consumer WebWatch, defended the study’s small sample size, saying the current study is a qualitative approach that stems from an earlier quantitative study of 1,500 conducted by independent researchers Princeton Survey Research Associates for Consumers Union. That survey found 60% of what the company describes as “Internet-savvy” Americans are unaware that some search results are paid. Consumer WebWatch in the current study commissioned Context-Based Research Group to use an “ethnographic” methodology to probe participants’ attitudes about and knowledge of paid search practices. In the study, a methodology the research group has also used in studies for American Express and Microsoft, researchers observed web users in their natural environments. “This approach allows us to understand what consumers actually do versus what they say they do online,” Marable says.

Consumer WebWatch developed guidelines for search engines based on its findings. The recommendations generally involve making clearer distinctions between paid versus non-paid results for consumers, and providing more explanation of the difference. “Consumers need to understand that search engines are not libraries, where information is ordered and cataloged objectively,” says James Guest, president of Consumers Union. “They are more like telephone directories where companies can pay to be listed before their competitors. Consumer WebWatch`s research already has told us that even many web-savvy consumers don’t know this. This new study tells us that when consumers find out about this, they feel betrayed.”

That finding presents a markedly different picture from other studies on paid search, including one involving more than 1,000 respondents conducted last year by independent research firm Synnovate and sponsored by paid search provider Overture Services Inc. In that study, 54% of the respondents reported being aware they were clicking on sponsored links in search results, and 79% rated the quality of those listings the same as other search results.

Jupiter Research analyst Matthew Berk says the bottom line in determining how satisfied consumers are with search results, paid or not, is relevance. “The fact that some links are sponsored does not mean that they will not be relevant. In fact, sponsored links may be the most relevant for some searches. So you have to be a little more sophisticated than saying ads are bad and results are good,” he says.

Berk cites a second issue beyond relevance when it comes to paid search results: how they are identified to consumers. “Even at the search engines that are very good about declaring that a result is sponsored, it’s not necessarily something the consumer is ever going to pick up on. Google, for example, explicitly declares when results are either sponsored or an ad, but most people simply filter that out.”

Berk adds that all search engines need to be careful about disclosing where results are coming from, and consumers, if they desire, should be given the choice of digging down deep into such disclaimers for more information. At the same time, in a practical sense it’s unlikely most consumers would avail themselves of that opportunity, he says. “Some engines are already better at this than others. But it isn’t clear that everyone would read it, even if it were sitting right under their noses.”


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