• by Laurie Sullivan  @lauriesullivan, August 18, 2009

A consumer satisfaction report on search engines and Internet portals released Tuesday could shed a little light on where to allocate budgets for search engine optimization, paid search and display ad campaigns.

It turns out that the experience consumers have on search engines can influence loyalties to brands that advertise on engines. Ads running on sites that consumers like tend to produce better results, according to Larry Freed, president and CEO at consulting firm ForeSee Results, which produced the study.

The advertiser feels the backlash, "guilt by association" if the consumer doesn't like the search experience, "but that's nothing new," Freed says. He adds that ForeSee has begun to study the influence that search engine satisfaction has on marketing and ad campaigns, as it relates to conversions and sales.

In the "American Customer Satisfaction Index (ACSI), Annual E-Business Report" released Tuesday, AOL sits in last place, but improved its score most from the prior year compared with other search engines on the list. Google stands out as being the "most liked," followed by "All Others," which could indicate that consumers are turning to niche engines more often, Freed says.

As more information is uploaded and indexed, the challenge to navigate through the muck has promoted higher satisfaction ratings in some niche search engines and portals, Freed says. "If financial news is important, or local news is important, you might go to one or the other to access the information from the smaller search engines or portals," he says.

Google remains No. 1, with an 86% satisfaction rating -- no change from last year. "All Others" ranks No. 2, with 78%, up 2.6% compared with a year ago. Yahoo follows with 77%. AOL gets a 70% satisfaction rating, improving by 1.4%, but placing last.

This year's e-business report also may provide guidance to investors based on a link between ACSI scores and financial performance, according to the report. Google's revenue and profit growth have remained steady, along with consistently impressive ACSI scores since 2002.

"Even though AOL rose 1 point, at the end of the day trailing Google by 16 points is a problem they need to overcome," Freed says. "High satisfaction leads to more use, more loyalty and higher customer retention. This will translate to improved revenue, regardless of the model they use."

Satisfaction drives higher revenue, which will drive better financials and improved stock performance, although Freed does not suggest that investors use the model to buy stocks.

Overall, Internet Portals & Search Engines scored a satisfaction rating of 83% -- up 3.8% from last year.

Google has led the customer satisfaction survey for each of the past seven years, except one. Yahoo temporarily overtook the Mountain View, Calif. giant in 2007, but Google rebounded in the following year by posting the highest customer satisfaction ACSI score ever recorded in the e-business survey. Even this year, it secured the second-highest score of any non-manufacturing company, online or offline, measured by the ACSI.

The Index, produced by ForeSee Results and published by the Stephen M. Ross School of Business at the University of Michigan in partnership with the American Society for Quality and CFI Group, was conducted before Microsoft announced its new search engine Bing, as well as the search deal with Yahoo.

Freed says there's a possibility that later this year, another study will be released that looks at Microsoft's Bing.

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