Consumers Lose Trust in Search Engines Once They Discover the Results Are Often Paid Advertisements, Study Finds.

Business Editors

YONKERS, N.Y.--(BUSINESS WIRE)--July 1, 2003

Consumer WebWatch, a project of Consumers Union, the non-profit publishers of Consumer Reports magazine, today announced findings of an ethnographic study that examines consumers' knowledge of and attitudes toward the paid search practices used by some search engine Web sites.

The study, titled "False Oracles: Consumer Reaction to Learning the Truth about How Search Engines Work", found that 17 Web consumers who participated in the March, 2003 study were surprised to learn some commonly used search engines are paid to list some results and sites more prominently than others. All participants said paid search listings on search and navigation sites were often too difficult to recognize or find on many sites, and the disclosure information available was clearly written for the advertiser, not the consumer. Participants were also misled by the term "sponsored," which many did not interpret as being open to advertiser influence.

"Consumers need to understand that search engines are not libraries, where information is ordered and catalogued objectively," said 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 has already told us that even many Web-savvy consumers don't know this. This new study tells us that when consumers find out about it, they feel betrayed."

The study found most participants had little understanding of how search engines compile Web pages and rank or prioritize links on a results page. The majority of participants never clicked beyond the first page of search results. They reported doing so because they trusted search engines to present only the best or most accurate, unbiased results on the first page, making it unnecessary to read further. As a result, two-in-five links (or 41%) selected by our study participants during assigned search sessions were paid search results.

"We learned from our first quantitative study by Princeton Survey Research Associates that 60 percent of Internet-savvy Americans are unaware that some search engine results are paid," said Leslie Marable, Research Project Manager, Consumer WebWatch. "These results were so intriguing we decided to dig deeper. In the second study, we instead opted for a groundbreaking methodology in which anthropological researchers observed Web users in their natural environments. This ethnographic approach allowed us to understand what consumers actually do versus what they say they do online."

The study, conducted from March 1 to 29, 2003, assessed 15 search engine Web sites, including: About.com, AlltheWeb.com, AltaVista.com, Ask.com, AOL Search (AOL.com), Go.com, Google.com, InfoSpace.com, iWon.com, Kanoodle.com, LookSmart.com, Lycos.com, MSN Search (MSN.com), Overture.com and Yahoo.com.

The final 17 participants were selected based on the fact that they were not aware of pay-for-placement strategies on search sites prior to the study, among other factors. The anthropologist researchers monitored participant behavior prior to "enlightening" them about site-specific paid search practices and then studied how this knowledge altered their behavior. This was done through "homework" search assignments as well as six hours of one-on-one time spent observing each participant at home, at work or at school. Consumer WebWatch chose to focus on the medium- to large- metropolitan areas of Kansas City, Mo., Phoenix, Ariz., Providence, R.I., and Raleigh-Durham, N.C., to provide more variance in offline and online consumer experiences.

The research project was funded by Consumer WebWatch, which commissioned Context-Based Research Group, a Baltimore-based research firm, to conduct this study. It was designed to expand on the results of an earlier examination of Internet-savvy Americans released in April of 2002 by Consumer WebWatch.

The below industry-specific guidelines were developed as a result of this study:

-- 1. Search engine sites should provide consumers with a

comprehensive list of major advertisers and content sponsors

with whom they do business, particularly those relationships

that would influence search rankings or results page

presentation. This list should be prominently displayed and

easy to find, with a current date of last update. The better

sites will display this information on each of the search

results pages or provide an easy-to-see link (and label) from

each results page.

-- 2. Sites should provide consumers with basic explanations of

how ranking and prioritizing technologies work (i.e., Web

indexing, spidering, crawling, human-compiled directory,

etc.). For instance, what criteria are used to determine

keyword relevancy, or, how advertiser-paid results are fed

into the results page.

-- 3. Sites that provide an internal editorial review of

keyword-triggered paid search advertisements and links should

prominently disclose this fact and provide a basic explanation

of how the editorial process works, and how much it costs the

advertiser before acceptance. Sites should also provide a

basic explanation of how they determine relevancy weighting

for paid search results versus those derived from unbiased

algorithms.

-- 4. Sites should tell consumers if search results from a

business partner or third party are exclusive to that site,

and which results from that partner are "pure" search versus

those that have been paid for, and a last date of update. For

example, sites should explain what is meant by terms placed

next to the search box, such as "Enhanced by Search Engine X"

or "Powered by Search Engine Y."

-- 5. The better search and navigation sites will use clear and

conspicuous terms to label paid search results, whether they

appear as links or in other formats, like boxed

advertisements. Consumer WebWatch recommends the term "paid

advertisement," which is modeled after the newspaper and

magazine publishing industries. The better sites will use

colored text and/or contained boxes or standard Web page areas

in which to place paid search advertisements or links, making

them easier for consumers to distinguish from pure results.

-- 6. The better search and navigation sites will provide clear

options for search customization at the earliest possible step

of the search. Site search architecture should focus on

consumer requirements, as opposed to focusing on business

agreements.

-- 7. The better sites will include a disclaimer or tutorial page

for consumers explaining "first doesn't necessarily mean

best," in results returns.

-- 8. Sites should provide an explanation or basic definitions of

frequently used search engine marketing terms such as

"cost-per-click," "paid search," "pay-for-placement,"

"pay-for-performance," "pay-per-click," "paid inclusion" and

"paid submission."

-- 9. Sites that offer paid search marketing programs for

advertisers should avoid making claims such as "the best,"

"most relevant" results or "most matches."

-- 10. In the special case of meta-search engines, in which a

number of search service providers feed their paid results to

the search engine property: Clear and conspicuous disclosure

should be made to indicate to consumers that many such results

are the equivalent of "paid advertisements."

For more information on "False Oracles: Consumer Reaction to Learning the Truth about How Search Engines Work," go to

http://www.consumerwebwatch.org/news/searchengines/index.html.

About Consumer WebWatch:

Consumer WebWatch is a project of Consumers Union, the non-profit publisher of Consumer Reports magazine and ConsumerReports.org. The project is supported by The Pew Charitable Trusts, which invests in ideas that fuel timely action and results; the John S. and James L. Knight Foundation, which promotes excellence in journalism worldwide and invests in the vitality of 26 U.S. communities; and the Open Society Institute, which encourages debate in areas in which one view of an issue dominates all others. Consumer WebWatch's Web site launched April 16, 2002.

http://www.consumerwebwatch.org

Note: ConsumerWebWatch.org does not participate in any pay-for-placement or paid inclusion/submission program on any search engine or navigation Web site.

About Context-Based Research Group:

Context-Based Research Group is an ethnographic research and consulting firm located in Baltimore, M.D. with a global network of cultural anthropologists located around the world. Professional anthropologists Robbie Blinkoff, Ph.D. and Belinda Blinkoff, M.A., A.B.D. created Context in partnership with Chuck Donofrio, the President and C.E.O. of Carton Donofrio Partners, Inc., an international brand experience design firm also located in Baltimore. http://www.contextresearch.com.