E-Biz Sites Continue Hunt for Credibility

Report targets relationships between the web and consumers.

Business on the internet keeps growing—and so are consumer expectations of online service and shopping sites. Strangely, however, retail growth online and its credibility are not necessarily in sync with each other.

Online retail spending in the United States is expected to hit $47.8 billion this year and is expected to continue to climb steadily to $130 billion by 2006, according to industry projections by Jupiter Media Metrix Inc.

At the same time, one e-business watchdog group is finding that consumer trust and confidence in e-business is not keeping up with the growth in retail sales. A new survey, from Consumer WebWatch, shows that only 29 percent of 1,500 Internet users of various experiences say they trust the Web sites that sell products or services.

Consumer WebWatch, a project of the Consumers Union, the nonprofit publisher of Consumer Reports magazine, also finds that while most users demand trust and clearly stated policies from e-business Web sites, those who spend money online are only vaguely familiar with how e-business sites interact with one another as well as with the policies to protect consumers in terms of privacy, fraud and spam.

For instance, 60 percent of those surveyed are not aware of the common practice of search engine sites receiving fees to list some sites more prominently than others.

Earlier this month, for example, America Online Inc. turned to Google Inc. to provide search technology on its properties, including AOLs proprietary service, AOL.com, CompuServe and Netscape.com, starting next month. In conjunction with the search services, Google will also provide AOL with a targeted paid listings service, which provides separate results to a search that advertisers pay for based on keywords.

Some 80 percent of those surveyed would like to see disclosure of those types of relationships upfront, Consumer WebWatch reported.

The survey also reported that consumers find privacy policies and practices important (73 percent of those surveyed have given personal information to a Web site) but that those consumers dont always pay attention to those policies. Only 35 percent report reading the privacy policies on most sites; only 22 percent report reading Web sites About Us pages.

In another finding, consumers of news and information sites are seeking assurance that editorial content is not influenced by advertising: 59 percent say that a clear distinction between editorial content and advertising is important.

"The down advertising market can cause companies to pander" to their advertisers, said Beau Brendler, director of Consumer WebWatch, based in Yonkers, N.Y.

Consumer WebWatch, started about a year ago, was born out of a Web credibility project begun in 1998 by the Project for Excellence in Journalism. Its main task, said Brendler, is to establish a consumer bill of rights that will help standardize the kinds of things consumers can expect from online businesses.

"There has been a kind of Darwinian sweep thats through the Web," said Brendler. "Some of the fun has been taken out" in terms of users making their own discoveries online.

"What has emerged is a real marketplace, and the pressure to stay alive will grow on content providers to create revenue," Brendler said.

As a result of that evolution, said Brendler, e-business sites are in a bind. They are under pressure to drive traffic and increase sales, which has created a kind of "assault" on Web users that can undermine the trust and credibility of a site—precisely the opposite result of what is intended.

Consumer WebWatch officials said they hope that its efforts can raise the consciousness of Web sites into striking a proper balance between aggressive marketing and establishing trust.

In the goal of creating a consumer bill of rights, the group will issue quarterly research reports on consumer Web sites. The groups latest survey, available at consumerwebwatch.org, focuses on general attitudes toward consumer trust and Web site credibility. Next month, the group will release its second research report, which analyzes the online travel and airline ticket booking market. Another report later this year will focus on search engines and search portal sites.

The groups reports comprise a combination of statistical analysis and hands-on testing, similar to the way big brother Consumer Reports tests and reports on products.

Although Consumer WebWatch is attempting to standardize online trust and credibility, the group is not advocating its own seal or stamp of approval for Web sites to adopt. Instead, it is pushing sites to achieve the more intangible goal of creating a trusting relationship with users.

"We support anything that contributes to a better Web," Brendler said. "Seals of approval are not that effective. What does work is establishing credibility and reaching users."

Scot Petersen

Scot Petersen

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture,...