Study: Paid Search Disclosure Lacks Transparency

A consumer advocacy group finds that-despite FTC mandates-many search engines still aren't clearly distinguishing between paid ads and legitimate results.

Two years after the FTC (Federal Trade Commission) called for "clear and conspicuous" disclosure in the paid search sector, a consumer advocacy group finds that some of the biggest names in the business still arent clearly distinguishing between paid ads and legitimate search results.

According to a study released by Consumer Reports Consumer WebWatch, many of the most popular search engines that hawk paid placement and paid inclusion ads alongside results still do not provide clear disclosures about how those results are influenced by advertising fees.

Paid inclusion, where companies pay a fee to increase the likelihood that their names will appear in search results, is at the heart of a fierce debate over the fairness and relevancy of search engine results, and the latest WebWatch findings only add to the mistrust in the industry, said WebWatch director Beau Brendler.

In an interview with, Brendler said the WebWatch study analyzed search results returned by the likes of Google Inc., Yahoo Inc. and its AltaVista subsidiary, Microsoft Corp.s MSN, America Online Inc. and Lycos Inc. and found a worrying lack of consistency and transparency in the way results are displayed.

In June 2002, the FTC issued guidelines to search engines that called for paid, ranking search results to be distinguished from nonpaid results with clear and conspicuous disclosures. The commission also asked that paid inclusion be "conspicuously explained and disclosed" to avoid misleading consumers about the way search results are generated.

Using those guidelines, WebWatch engaged professional librarians to use the 15 most-trafficked search engines over the past six months. Among the major findings, WebWatch reported that the majority of disclosures were difficult to spot, hyperlinks to disclosures were imperceptible and many disclosures were impossible to understand.

"The disclosures and explanations should be consistent and easy for consumers to find. It should not be cluttered with legal jargon because the average consumer doesnt understand the difference between paid inclusion and paid placement," Brendler said.

He gave Google high marks for the way paid placement advertisements are clearly separated with distinguishing labels and colors. But companies such as Yahoo did not do a good enough job of making the separation, Brendler said.

Yahoo allows advertisers to purchase inclusion in its search index with the Overture SiteMatch program, but those results arent clearly marked on the site, the study found. Yahoo does provide disclosure via an "about this page" link.

Officials at Yahoo did not return calls for comment.

/zimages/5/28571.gifClick here for more on Yahoos paid search path.

"Paid inclusion is not necessarily a bad thing. It can be useful to consumers and businesses looking to make certain connections, but what concerns us is the way the disclosure is handled," the WebWatch director said.

WebWatch said testers found a bigger problem with meta-search engines that present results from several other engines simultaneously. Of the three meta-search tools tested—CNETs, InfoSpace and WebSearch—all stripped away existing disclosures and often did a poor job of providing any of their own.

Although CNET and InfoSpace disclosed paid placement, none of the three meta-engines tested adequately disclosed paid inclusion—despite relying on results that may have contained paid inclusion, the study found.

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