May 24, 2003

Consumer Webwatch will shortly present a report that concludes that searchers find it hard to distinguish between paid pay-per-click text ads and regular search results.

In a discussion on "Building Trust on the Web" under the Consumer WebWatch's April summit on Web credibility, Leslie Marable of Consumer WebWatch told that according to one study of April last year 60 percent of the consumers they polled "had no idea that some search engines charged fees in exchange for prominent placement of search results."

It should be added that since then several search engines have started designating their pay-per-click search results more clearly, not at least because of pressure from the American Federal Trade Commission. This was clearly one of the reasons Consumer WebWatch commissioned a new study.

The new study is not based on a phone survey like the previous one. Instead Consumer Webwatch has opted for an anthropological/ethnographical in-depth study of 17 people. It turns out that all participants were surprised when they learned about pay for placement -- even the more "advanced" Web users.

Search sites often mark paid results as "sponsored". One participant noted that "A sponsor is someone who gives money to support programs," and he did clearly not read this to mean "paid text ads". This is not a representative survey. You need more than 17 respondents to achieve that. Still, we would not be surprised if a majority of searchers are unable to distinguish between pay-per-click text ads and regular search results -- especially when the text is formatted and presented in a similar way.

Does it matter? Well, a cynic may argue that "what they do not not won't hurt them" -- as long as they find relevant results that is. Both Overture and Google AdWords spend a lot of resources on ensuring that the paid text ads actually are relevant -- not only to avoid complaints from organizations like the Consumer WebWatch, but also in order to make advertisers happy. Relevant text ads results in more click-throughs and higher conversion rates.

But there is also the question of credibility. If this marks the start of a new debate on the legitimacy of pay-per-click text ads, the search sites may get hurt, as these ads have become one of their most important sources of revenue. Moreover, the success of a site like Google is built on a good reputation, and Google cannot afford to loose that.

Google has actually done a lot to distinguish the text ads from regular search results, placing them i colored text boxes set apart from the rest of the listings. However, they are still called "Sponsored Links". So why don't they just call the adverts "Adverts"? Our guess is that they are afraid that this will cause a drop in click-throughs and lower revenue.

In the long run, however, the risk of more bad publicity may make that a more sensible option. The searchers may like it as well. This especially applies to those that are searching for information instead of goods and services. People who want to know more about how to grow a lush lawn are not always looking for fertilizer.

For a presentation of last years controversy, see "Paid results have finally become 'Sponsored Links'" (The Pandia Post July 2002).

Source: Pandia.com

        

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