Study: Search Engines Still Fail to Disclose Ads

BERKELEY, CALIF. – Search engines continue to inadequately inform consumers about the influence that advertising dollars have on placement and rankings of search results, according to a report released today by Consumer Reports WebWatch.

The organization issued the study at an event in Berkeley, Calif.

The report, “Still In Search of Disclosure,” is the fourth in an ongoing research project undertaken by Consumers Union, the non-profit consumer watchdog organization behind Consumer Reports magazine. A follow-up to a 2004 study examining the ways search engines identify and explain paid search results, the latest study found little improvement over last year, and concluded that none of the 15 search engines examined had satisfactorily disclosed their practices.

“Follow-up research confirms these insufficient efforts to inform consumers about the financial forces at work every time they hit the search button,” said Jorgen Wouters, a WebWatch consultant and author of the report.

Despite many changes among the sites in the study, WebWatch found that nearly half the sites stayed the same, a third got worse, and only three of the 15 sites improved. Key areas considered were prominence of disclosure headings, along with clarity and accessibility of disclosure statements.

The study found that many of the search engines moved or changed the color of these elements from a bright color like red to gray. Several also removed the direct hyperlink from the “sponsored links” headings to the disclosure page, making it more difficult for users to find that information.

Of the top search engines, AOL Search, Google, and Yahoo Search Marketing were given good marks for disclosure, but showed minimal change over the year before. Ask Jeeves and Yahoo Search were downgraded for making headings less visible, and removing hyperlinks to disclosure statements. MSN Search was the only major search engine to show improvement, largely because MSN discontinued its paid inclusion and content promotion programs, giving them less to disclose.

Wouters insisted that WebWatch is not on a mission to abolish paid placement or paid inclusion, but rather wants engines to fully disclose that certain results appear because of a paid relationship and not necessarily because of the site’s relevance to the user’s search query.

“We think that consumers have a right to know what they’re clicking. All we’re asking for is that if it’s an ad, call it an ad,” Wouters said. “People aren’t necessarily opposed to the advertising. Let’s face it, a lot of people are going to the Web to buy products.”

The first study, done in 2002, showed that more than 60 percent of consumers were unaware of search engines’ paid placement programs, which give preferred placement in search results to sites that advertise. The Federal Trade Commission (FTC) cited the report in a letter to search engines calling for “clear and conspicuous disclosure” of paid placement and paid inclusion in search results. The FTC’s letter was prompted by a 2001 complaint by consumer advocacy group Commercial Alert.

A 2003 WebWatch study showed consumers continued to be surprised, and showed “considerable dismay” when they found out that some search results were there because the advertiser was paying to be there. For its 2004 study, WebWatch created an evaluation tool based on the FTC guidelines. The study found that most of the 15 search engines had made some efforts to satisfy the FTC recommendations, but none excelled at making the relationship between advertising and search results clear.

“Overall, our findings reinforce a troubling trend that we noted a year ago — that search engines seem to be doing very little to comply with FTC guidelines. And some of them seem to be doing as much as possible to conceal advertising,” Wouters said.

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