Report: Search Engines Do Poor Job Of Disclosing Pay-For-Play

Two years after the Federal Trade Commission issued guidelines calling for disclosure of paid listings in search engines, many top search engine companies still fail to adequately explain the extent to which they have accepted payment from marketers, according to a study released this week by Consumer Reports WebWatch.

"While some sites diligently disclose and explain their business relationships, others appear to obscure the presence of advertising within search results," wrote report author Jorgen J. Wouters.

For the study, "Searching for Disclosure," a team of five researchers tested the 15 most popular sites between April 28 and May 4. The researchers looked at how well the sites disclosed information about both paid placement, where advertisers buy higher rankings within search results, and paid inclusion, where advertisers pay to be listed within the results found via search engines' own organic programs.

The report found that eight of the 15 search engines tested had disclosures that were physically difficult to see because of their fonts and colors, and that many disclosures were "incomprehensible" and "[left] some testers baffled and uncertain about what they had read."

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The report also concluded that disclosure around paid inclusion was especially problematic. "Paid inclusion was not satisfactorily disclosed or explained by any of the search engines tested," the report stated.

Among the top search engines, Google has never used paid inclusion. Two others, MSN Search and Ask Jeeves, both stopped accepting paid inclusion listings earlier this year.

"Paid inclusion, in general, has a lot of stigma attached to it," said Jim Rainey, an Ask Jeeves product manager. He added that paid inclusion sometimes also lessened the quality of search results. Paid inclusion had accounted for around 1 percent of the company's overall revenue, said Rainey.

Chris Theodoros, director of agency relations at Google, said the company always shied away from paid inclusion out of fear that it would compromise the relevance of search results.

In June 2002, in response to a complaint by the consumer watchdog organization Commercial Alert, the FTC called for greater disclosure of paid listings. Yesterday, Commercial Alert Executive Director Gary Ruskin said his organization still receives consumer complaints about the topic. "Search engines still haven't fallen into line with the FTC rule," he said.

The WebWatch report went so far as to recommend that consumers consider avoiding one site, 1stblaze, due to "inadequate or absent disclosures that undermine the integrity of search results." The Web site 1stblaze.com included no contact information beyond an e-mail address; a MediaPost e-mail sent to that address Tuesday was returned undelivered. Beau Brendler, director of Consumer WebWatch, said his organization's attempts to contact the search engine company were likewise unsuccessful.

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