Commentary

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Those of us who have worked a while in new media often make the mistake of assuming the rest of the world functions with our level of understanding of how the Web works. That's not a good assumption. In April 2003, when we launched the WebWatch project, we published the results of a national poll that found 60 percent of Internet-savvy U.S. adults--over 18, with a minimum of six months of Internet use under their belts--didn't know that search engines took money from advertisers for placement in and around search results.

We were surprised, and wanted to know more about why they didn't know. So we hired a company specializing in ethnographic research, whose clients number among the biggest brand names in the world, to better understand. We dispatched anthropologists to four American cities--Providence, R.I., Phoenix, Ariz., Kansas City, Mo., and Raleigh-Durham, N.C.--to spend hours observing 17 Web-savvy consumers using search engines in their daily lives. We screened our subjects to make sure they--like the majority of our poll respondents--didn't know many details about search engine business models. Then, after a period of time, we told them how search engines made money--from selling advertising in the form of paid placement to selling presence and prominence in the form of paid inclusion.

The results were even more surprising than our poll. Some of our test consumers responded as if they had been betrayed by an old friend. Others became angry, or said they experienced emotions similar to depression. And they didn't understand that terms such as "sponsored link" and "featured results" and other advertising euphemisms actually mean: "This space in your search was bought by someone trying to sell you something." Search engines that clearly marked advertising fared much better among our test consumers than those that didn't. Often, our consumers said they would never use those search engines again.

A year later, we tested how search engines measured up to U.S. Federal Trade Commission guidelines the agency published after warning a number of the major players in 2001 about misleading advertising practices. We used test questionnaires made up directly from FTC publications. The results were mixed: Although the top 15 most-trafficked search engines had, over three years, become much better about identifying paid placement, none of those still using paid inclusion (10 of the top 15) clearly disclosed that fact, or clearly explained how paid inclusion works.

Based on this evidence, we at WebWatch believe search engines and their advertisers are taking some risk by not being straightforward about how the system works. We're not against anyone making money. But we do believe that as consumers surf ever higher on the Web learning curve, those search engines that make clear the difference between results and advertising will succeed--Google is a solid real-world example. Those that don't will risk losing consumer trust--and once that relationship is gone, it's very hard to restore.

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