Search results often include links labeled "sponsored links," "sponsored results," or "sponsored sites." Many of us assume that these are advertisements -- but not everyone has the same understanding.
New research on the actions of 299 participants by Harvard Business School professor Benjamin Edelman and doctoral student Duncan S. Gilchrist reveals that replacing "Sponsored Link" with "Paid Advertisement" results in up to a third fewer click-throughs.
"Results are most pronounced for commercial searches, and for users with low income, low education, and little online experience," according to their working paper.
Edelman and Gilchrist recommend that all search engines change their labeling immediately, if necessary under pressure from the Federal Trade Commission.
They conclude: "The 'paid advertisement' label is especially beneficial to the users who least understand the meaning of 'sponsored links.' These users -- young people, low-income users, less educated users, and Internet novices -- deserve special protections."
On Nov. 4, Google changed it sponsored link language to simply say "Ads." While a step in the right direction, according to the researchers, the label is too small and brief to attract attention. "Paid Advertisements" would be much clearer.
The fact that Google has just changed its wording policy on advertising suggests that this is a trend to watch. Should you care? Absolutely, if your company partners with one of the big search engines to deliver search results and ads to visitors on your site. The results often use the same "sponsored" language, but presented in your own site design.If you are concerned about it, contact your search vendor.
If you were a search engine CEO, would you make this change? Judging by the experiment discussed above, such a move could cost you a not insignificant amount of ad revenue. Should government step in and require the change?