*Graphical summary of the GA’s opinion on the French Keyword Advertising cases

Having pondered about the GA’s opinion for some time I’d now like to sum my conclusions up. I’ve especially considered the statements published by Mackenzie, Ott, the IPKat and van Hoboken.

To enlarge the pictures just click onto the thumbnail above or onto the picture below. Although I’ve really tried to find a way to display most aspects of the opinion in a simple and comprehensible way, I do not recommend it for people who searching for an introduction into the topic, as the stuff is still quite complicated.

My criticism:

First of all I really do like the GA’s general view of the issue and agree with him e.g. on the nature of the internet. However, I do have to wonder if the ECJ will follow the GA on all issues. So for example…

- I am looking forward to seeing if the ECJ will agree with the GA’s splitting of the keyword advertising process into two separate issues and thus seeing the booking of the keywords by the advertiser as a non-commercial act and the selling of the keywords as a seperate service to the linking of ads to websites.

click to enlarge

- I share the GA’s view on the likeliness of confusion and welcome the fact that the GA kind of follows the “multi factor test“, as suggested by the District Court of Massachusetts.

- I am reluctant to agree that the search process should be compared to “caching” and the process of displaying ads to “hosting“. In my opinion, it doesn’t make much sense to “forcefully expand” the existing provisions to fit onto these two concepts as well. Clear-cut exceptions would be more useful, but would require the EU Comission to act; something it is apparently a bit reluctant to do…

- I am also very sceptical towards guiding claims against AdWords and the advertiser towards national liability rules, as I think that harmonised laws would create more certainty & security for business and consumers and thus be far more efficient.

click to enlarge

I’d appreciate any comments.

*UK reference for preliminary ruling on Keyword Advertising – Interflora v Marks&Spencer

As I’ve just learnt on the IPKats website the questions referred by the England and Whales Hight Court of Justice at the 22nd of May 2009 on Interflora, Inc. Interflora British Unit v Marks and Spencer PLC Flowers Direct Online Limited [2009] EWHC 1095 (Ch) have just been published on the Curia website.

Reading the reference is a bit encumbered by the fact that apparently someone has forgotten to add the numbers in front of each questions. This makes it slightly more difficult to read. Thus I’ve added the numbers in front of each paragraph, added titles to the three sections and added some comments.

[Liability of the advertiser]

“1. Where a trader [advertiser] which is a competitor of the proprietor of a registered trade mark and which sells goods and provides services identical to those covered by the trade mark via its website (i) selects a sign which is identical (in accordance with the Court’s ruling in Case C-291/00) with the trade mark as a keyword for a search engine operator’s sponsored link service, [a keyword suggested by Google?] (ii) nominates the sign as a keyword, [selects the keyword himself?] (iii) associates the sign with the URL of its website, [creates and ad?] (iv) sets the cost per click that it will pay in relation to that keyword, (v) schedules the timing of the display of the sponsored link and (vi) uses the sign in business correspondence relating to the invoicing and payment of fees or the management of its account with the search engine operator [uses the sign in AdWords to manage its account?], but the sponsored link does not itself include the sign or any similar sign [an "Adv-"], do any or all of these acts constitute “use” of the sign by the competitor within the meaning of Article 5(l)(a) of First Council Directive 89/104/EEC¹ of 21 December 1988 (“the Trade Marks Directive”) and Article 9(l)(a) of Council Regulation 40/94² of 20 December 1993 on the Community trade mark (“the CTM Regulation”)?

2. Is any such use “in relation to” goods and services identical to those for which the trade mark is registered within the meaning of Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation?

3. Does any such use fall within the scope of either or both of:

(a) Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation; and

(b) (assuming that such use is detrimental to the distinctive character of the trade mark or takes unfair advantage of the repute of the trade mark) Article 5(2) of the Trade Marks Directive and Article 9(l)(c) of the CTM Regulation?

4. Does it make any difference to the answer to question 3 above if:

(a) the presentation of the competitor’s sponsored link in response to a search by a user by means of the sign in question is liable to lead some members of the public to believe that the competitor is a member of the trade mark proprietor’s commercial network [the confusion issue] contrary to the fact; or

(b) the search engine operator does not permit trade mark proprietors in the relevant Member State of the Community to block the selection of signs identical to their trade marks as keywords by other parties? [AdWords trademark policy issue]

[Liability by Google/AdWords]

5. Where the search engine operator (i) presents a sign which is identical (in accordance with the Court’s ruling in Case C-291/00) [Article 5(1)(a) ... must be interpreted as meaning that a sign is identical with the trade mark where it reproduces, without any modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contains differences so insignificant that they may go unnoticed by an average consumer.] with a registered trade mark to a user within search bars located at the top and bottom of search pages that contain a sponsored link to the website of the competitor referred to in question 1 above, (ii) presents the sign to the user within the summary of the search results, [in the organic search results?] (iii) presents the sign to the user by way of an alternative suggestion when the user has entered a similar sign in the search engine, ["Do you mean"-function] (iv) presents a search results page to the user containing the competitor’s sponsored link [not as a part of the organic search results] in response to the entering by the user of the sign and (v) adopts the user’s use of the sign by presenting the user with search results pages containing the competitor’s sponsored link [only the user uses the sign!], but the sponsored link does not itself include the sign or any similar sign ["Adv-"], do any or all of these acts constitute “use” of the sign by the search engine operator within the meaning of Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation?

6. Is any such use “in relation to” goods and services identical to those for which the trade mark is registered within the meaning of Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation?

7. Does any such use fall within the scope of either or both of:

(a) Article 5(l)(a) of the Trade Marks Directive and Article 9(l)(a) of the CTM Regulation; and

(b) (assuming that such use is detrimental to the distinctive character of the trade mark or takes unfair advantage of the repute of the trade mark) Article 5(2) of the Trade Marks Directive and Article 9(l)(c) of the CTM Regulation?

8. Does it make any difference to the answer to question 7 above if:

(a) the presentation of the competitor’s sponsored link in response to a search by a user by means of the sign in question is liable to lead some members of the public to believe that the competitor is a member of the trade mark proprietor’s commercial network contrary to the fact; or [confusion issue again]

(b) the search engine operator does not permit trade mark proprietors in the relevant Member State to block the selection of signs identical to their trade marks as keywords by other parties? [AdWords TM policy issue again]

[Directive 2000/31 & accessory liability]

9. If any such use does fall within the scope of either or both of Article 5(l)(a) of the Trade Marks Directive/Article 9(l)(a) of the CTM Regulation and Article 5(2) of the Trade Marks Directive/Article 9(l)(c) of the CTM Regulation:

(a) does such use consist of or include “the transmission in a communication network of information provided by a receipt of the service”, and if so does the search engine operator “select or modify the information”, within the meaning of Article 12(1) of European Parliament and Council Directive 2000/31/EC³ of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“the E-commerce Directive”)?

(b) does such use consist of or include “the automatic, intermediate and temporary storage of information, performed for the sole purpose of making more efficient the information’s onward transmission to other recipients of the service upon their request” within the meaning of Article 13(1) of the E-commerce Directive?

(c) does such use consist of or include “the storage of information provided by a recipient of the service” within the meaning of Article 14(1) of the E-commerce Directive?

(d) if the use does not consist exclusively of activities falling within the scope of one or more of Article 12(1), 13(1) and 14(1) of the E-Commerce Directive, but includes such activities, is the search engine operator exempted from liability to the extent that the use consists of such activities and if so may damages or other financial remedies be granted in respect of such use to the extent that it is not exempted from liability?

10. If the answer to question 9 above is that the use does not consist exclusively of activities falling within the scope of one or more of Articles 12-14 of the Ecommerce Directive, may the competitor be held jointly liable for the acts of infringement of the search engine operator by virtue of national law on accessory liability?”

*Have you ever wanted to look into your personal records at Google?

Reading my favourite Austrian newspaper this morning I came across a very interesting new Google Service. “Google Dashboard” is a service, that not only allows you to check out what data Google has recorded about you (pretty much everything you do/did while being logged in at Google, Gmail, YouTube, etc.), but at the same site offers you links to the relevant privacy settings page of each of Google’s products(!).  To be honest, I think that’s almost too good to be true. (Just compare that to how Austrian companies are actually  complying with the “Right of Information” granted by section 26 of the Austrian Data Protection Act- DSG 2000)

However it is not possible to possible to actually delete stored information through this application and Ott mentions that there are some services, as e.g. the Google Toolbar, which are not listed in the Dashboard.

Anyway, check it out yourself by clicking here or watch the video first.

*Sect. 26 Austrian Data Protection Act – “Lex Unheared Of”

First things first: I’ve finally received an answer to all of my three requests which I posted on the 8th  June 2009.

For a short description of the rights referred to the individual [Right to Information, "Auskunftsrecht"] according to section 26 of the Austrian Data Protection Act [original title: Bundesgesetz über den Schutz personenbezogener Daten (Datenschutzgesetz 2000 - DSG 2000)] as well as for a link to German/English version of the law please see my previous post >>here<<.

Very short summary: according to section 26 of the Austrian Data Protection act, every  individual (data subject) may ask entities holding (any kind) of information about the data subject, free of charge, once a year and within 8 weeks, to disclose all the information stored about him/her/it.

How it all started: At a legal symposium in early 2009 a speaker mentioned that the Austrian Data Protection act was kind of a LEX IMPERFECTA as it was very difficult to actually get the requested information from from e.g. his bank. So, while waiting for the opinion of the GA I sent out letters to 3 entities, asking them to reveal which kind of information they’ve stored about me.

I’ve tried it anyway, and here is my summary:

Deltavista GmbH: As there was no clear description on the website of the Deltavista GmbH of how to file a request, a week was wasted before tDeltavista received my letter containing all the necessary documents (copy of my driving license). Anyhow, on the 18th of June I received a letter including “all” the information they have stored about me. The information  included my name (not the correct / full one) and the addresses at which I’ve lived in Austria. Furthermore it said that this information has not been “used” within the last year and that they do not have a creditworthiness history about me. I have to say I am satisfied with the speed of delivery and the content of the information. It is still interesting to see that in their presentation Deltavista listed one bank to be one of their clients. I have a bank account at this (foreign) bank, but  however no information about this bank account didn’t show up in my records presented by Deltavista. I took that as a good sign. Solid and quick.

T-Mobile Austria: Getting the information from T-mobile was not easy but the staff was very nice and helpful, although they honestly didn’t have the slightest clue what I was talking about. After being forwarded to the legal department, after having talked to many nice ladies (one of which tried to convince me that such requests could only be filed by a court order ,  the lady at the legal department asked me what information exactly I was requesting, which was a bit difficult as I didn’t really have a clue what kind of information they might be holding about me in the first place. On the 20th of July I finally received the requested information in the form of  dodgy print outs from their computer system. Friendly & helpful, but a bit unorganized.

Bank Austria – Unicredit: Reaching the legal department was by far the hardest bit as the main questions were always “why” and “what exactly”? I guess what saved me was that, as the head of my local branch was continuously very extremly reluctant to assist with my request, I couldn’t help but mention that I am a jurist and that I am submitting my request for research purposes and that I was timing my request and taking down the names of all the people involved (I guess that was after my third conversation with him). As a result he kind of refused to talk to me (“I am not authorised, bla, bla, bla…. “) anymore, but finally promised to forward my request to the legal department of my bank. This was the point at which I signed up for the Domain www.bankaustria-unzufriedene.at. Once having reached the legal department (call them, they won’t inform you that they’ve received your request), everything went quite swiftly and I have to say that when I received the letter from the bank on the 1st of August (the deadline prescribed by law ended on Monday the 3rd of August and I received the letter by express mail on Saturday the 1st) I was more than surprised. Apparently someone had really put some thought into how to prepare the information for their customers. Very, very well done. There was a tiny question left which was answered with a two minute conversation with a friendly employee at my local bank. After managing to get past the head of the branch; not fast but excellent quality.

CONCLUSION: The problem seems to be that companies such as T-mobile and Bank Austria still  haven’t informed their first level support staff about the customer rights arising out of section 26 DSG. Once the customer/client has made it to the legal department he/she has already reached his goal

*Fighting Fire with Fire… Online Reputation Management Tips by Google

The advice by Google on its blog may be compared to the tips for fighting a forest fire:

1: Be careful and think before you publish information about you. (avoid)

2: If there is something you don’t like, go to the source and fight against it there = contact the site’s webmaster. (extinguish)

3: If “2″ doesn’t work out, post even more content yourself, pushing the “bad source” out of the screen. Or, open a Google Profile… (fighting fire with fire)

*New BGH meta tag decision “Partnerprogramm”

I’ve just discovered on  IPKat blog a new decision by the  BGH [BGH, Urteil vom 07.10.2009 - Az. I ZR 109/06] on the topic of meta tagging or other SEO methods and the liability of advertiser. This is thus NOT and keyword advertising case.

In the Partnerprogramm case the TM (“ROSE”) of a claimant (www.roseversand.de) was found to be used by an web-advertising company 0049-net GmbH which got hired by the defendant (www.raddiscount.de) , a  competitor of Rose, to promote the defendants website.  The core problem of the case does not lie in the trademark use issue but on the liability of the defendant for the trade mark infringement by the advertising website. The courts have had no troubles to find an infringement as the TM of the claimant got used in the search results of the advertising company which then directed possible customers to the website of the defendant and thus the courts for an confusion of origin.

The BGH states that:

1. Wird ein als Suchwort verwendetes – geschütztes – Zeichen dazu verwendet, das Ergebnis des Auswahlverfahrens in der Trefferliste einer Internetsuchmaschine zu beeinflussen und den Nutzer auf diese Weise zu einer Internetseite des Verwenders zu führen, liegt eine markenmäßige Benutzung vor. (vgl. BGH, Urteil vom 18.05.2006 – Az. I ZR 183/03, MIR 2006, Dok. 196 – Impuls; BGH, Urteil vom 08.02.2007 – Az. I ZR 77/04, MIR 2007, Dok. 287 – AIDOL; BGH, Urteil vom 22.01.2009 – Az. I ZR 30/07, MIR 2009, Dok. 063 – Beta Layout; BGH, Beschluss vom 22.01.2009 – Az. I ZR 125/07, MIR 2009, Dok. 050 – Bananabay).

[translation by Austrotrabant] If a protected sign [trade mark] ]is used as search term [keyword] to influence the decision-process [?ranking procedure?] on the search result page of a internet search engines and thus guides the user to the website of the person using the advertising service [advertiser], this constitutes trademark use.

I am of the opinion that the IPKat blog somehow got this decision wrong when they  labelled it as “Liability for AdWords” but I agree with Uli Hildebrandt when he states that:

The BGH clarifies an issue concerning liability for links. A company that pays commission to another company which has a link to the first company’s offers and infringes a trade mark with this concrete link is itself liable for the link.

*Of Cats and Dogs -or- The Difference Between Keyword Advertising and Meta Tags

edited by C. Angelopoulos

this is a cross-post to the IPKat’s post.

Actually, I do think making a proper distinction between Keyword Advertising and Meta Tags is important in law; Below, a list of three reasons as to why:

1: Because they aim for different effects.

With the help of meta tags, people attemp to transport content or to improve the ranking of a site in the SEARCH RESULTS, while Keyword Advertising is used to display ADVERTISEMENTS above (Top-Ad) or beside (Side-Ad) the search result. While users soon “learn” to ignore these ads (for more details on this effect see Level of Trust in Search Engines), trying to smuggle oneself into the search results is a way of exploiting users’ incredible, and most probably unfounded, trust in the ranking of search engines (please see here, under Do Users notice the Ads?). So, while the first is a method of advertising, the later one aims at deceit. But does this make any difference in practise? It does!  Why?

2: “Because mummy said so“.

Let’s face it, this has always been the longest running and best argument in the world ever. The market leader has officially declared (again) that it does not consider meta tags for the ranking of its search results. Maybe others do, but Google at any rate doesn’t since 2004(!). So, as there already is a difference in practice, the question is shouldn’t this difference be reflected in the law as well…?

3: Because evolution/development just keeps moving on.

Although cats and dogs are both mammals, only few will argue that they are the same animal. While it is completely reasonable, and in some cases even necessary, to develop analogies between existing practises and new ones, this does not mean that the old terminology should be forced onto new phenomena. The analogy might later (in fact) turn out to be perfectly applicable, but using the old term might prove problematic and should be regarded as unprofessional.

(And dear colleagues let’s face it, not everybody who has been given a BlackBerry by his/her company or has bought him/herself a new shiny/stylish iPhone is an IT-lawyer. This stuff IS sometimes a bit complicated – otherwise my doctoral thesis would prove to be rather pointless!

Please feel most welcome to disagree on any or all of the above and feed this troll by commenting.

*Possible implications for the Austrian “Bergspechte” reference arising out of the Google France opinion by the GA Maduro

Obviously the Austrian OGH as well as the Dutch Hoge Raad de Nederlanden have seriously doubts if Top-Ads should be seen as separate ads above the list of search results (“list of hits“), as the OGH has stated in section 3.5 of its Wein & Co decision that Top-Ads are a to be seen as being within the search results.  Thus the OGH and the Hoge Rad de Nederladen at least implicitly alleged in tehir references that advertisers and search engines might carry out a (mythical) practise usually referred to as “keyword buying“. Also the textual labelling appears not to be sufficient for the OGH. Thus the second question of the “Bergspechte” reference for preliminary ruling by the Austrian Supreme Court reads like following:

(A) Is the trade mark proprietor’s exclusive right infringed [...] regardless of whether the accessed advertise- ment appears in the list of hits or in a separate advertising block and whether it is marked as a ‘sponsored link’?

(B) [...] is the fact that the advertisement is marked as a ‘sponsored link’ and/or appears not in the list of hits but in a separate advertising block sufficient to exclude any likelihood of confusion?

When reading through the GA’s opinion paragraph 10 truly impressed me as it said in a very clear and unambiguous language that:

10. Google also operates an advertisement system called ‘AdWords’, which enables ads to be displayed, alongside natural results, in response to keywords. Ads typically consist of a short commercial message and a link to the advertiser’s site; they are differentiated from natural results by being presented, under the heading [...], either at the top of the page, against a yellow background, or on the right‑hand side. (8)

[8]The parties have provided documents in support of their opposing views as to whether internet users truly distinguish between natural results and ads.

I’d like to summarize paragraph 10 as following:

- Contrary to the OGH’s view since “Wein&Co” the GA does not see Top-Ads to be a part of the (organic) search results. Thus the GA is not of the opinion that Google accepts money to rank ads in its search results (“Keyword Buying”)

- The GA seems to see the labelling of the ads to be sufficient as he does not refer to them as labels but “headings” which would indicate that they are clearly visible.

- When referring to the coloured background of the Top-Ads the GA seems them as a way to “differentiate” ads from (organic) search results and does not, as the OGH does, see them as a kind of highlighting.

- According to Footnote 8 within paragraph 10 the AG has not decided (yet) how to address the issue of likeliness of confusion. I personally wouldn’t be surprised to see the GA coming up with a “multi factor test for the likeliness of confusion” as suggested by e.g. the District Court of Massachusetts in its Hearts on Fire Co v BLue Nil Inc decision.

Looks like GA Maduro is just about to bust the myth of Keyword Buying

*Trademark infringements or acts of unfair competition through Google Maps Naviagtion?

While analysing the GA’s opinion on the likeliness of confusion I came across a video by Google in which the company presented its newest software: Google Maps Naviagtion (GMN).

What makes GMN so special is that it bundles all of Google current services (Google Maps, Streeview, Google Search) and offers them to be used on a hand-held device. Still, raised my interest was when I saw a result page for an query for “tai restaurant” in the video as the result page on the mobile phone listed a number of businesses but did not indicate if any of these links were Sponsored links.

So here we go: If Google combines its proven (AdWords/AdSense) Keyword Advertising technology with mobile devices this might not only the same challenges as the current Keyword Advertising issue but also some extra challenges as:

- the user is usually in a hurry and thus do not pay a lot of attention (esp. when using the voice input function)

- the space on the screen is limited and thus it might be more difficult to mark/spot Sponsored Ads

- little to no chance to get a second opinion

Here are a few screen-shots I’ve taken myself form the video:

Enter your query or use the voice recognition software.

Google performs a search for you

And presents you the results page.

So I assume there are all free business listings, and no “Ad Extensions” for which advertisers get charged per click right?

*Empirical Research on the User’s Perspective of Keyword Advertising

When speaking about the essence of the Keyword Advertising dispute from a trademark as well as from a law of unfair competition point of view, 3 central questions arise. These were also explicitly listed by GA Maduro in his opinion on the three pending French Keyword Advertising trademark infringement cases:

i) Whether the use takes place within the course of trade.

ii) Whether the use is made in relation to goods or services which are identical or similar to those covered by the trade mark

iii) Whether the use affects or is liable to affect the essential function of the trade mark, by reason of a  likelihood of confusion on the part of the public

So, let’s focus on the last criteria/question: the likelihood of confusion. As I am not aware of any court decision really dealing with this question on an empirical level, I turned to the current literature on the topic and read that:

The important question then is: would the consumer be confused into thinking the trade mark owner was the origin of the goods advertised in the sponsored links? This is a difficult question to answer in the absence of empirical research. [1]

Although I truly believe that the chapter of Bednarz/Waelde is (apart from a small issue concerning the placement of an ad on the SERP) the best and most comprehensive piece I’ve ever read on this topic, I find it very difficult to agree with them on the point that there is empirical research available which could serve as a ground for further discussion of this issue. Having said this, there is no relevant study that I know of which explicitly answers the question if users are or will be confused when being confronted with advertisement on a Search Engine Result Page (SERP).

Here are some facts I came across while doing research for my thesis. As you will see in a second the range of topics covered is lsightly broader than the question at hand itself as I wanted to allow the reader to get an overview about not only the empirical research available but also the multitude of factors to be -possibly- taken into account then discussing this topic. Concerning the quality and reliability of the studies I am going to refer to in a second, I’d like to point out that I have serious doubts about some. Still, comparing all the studies available on the topic, there seems to be a discernable”trend” and this is exactly what I am aiming for. In case you are interested in more details, please feel free to contact me – I’d be happy to discuss this issue.

1. Overall internet savviness of users:

Internet savviness depends on two things; Age & Experience:

There seems to be a distinct correlation that younger people are doing better on the net than older ones.

Y-axis: age, Y-axis: percentage time (24') needed for an exercise, GREEN line: tasks sucessfully fulfilled, BLUE line time needed to complete task [2

Still, the most important factor concerning internet is simply experience (time/experience online). Experience is far more important than gender, money, eduction, social background and family situation… It just seems to be important that users have been online for a while and made their “own” online experiences. [3]

 

Something else to be kept in mind is that older and younger people use the internet in different ways.  Younger users use more IM etc, middle age eCommerce and old users email. [4 ]

In relation to their internet search capabilities, users regularly tend to overestimate themselves (the paradox of the active user). [5]

2. Trust in Search Engines

Users place an impressive amount of trust in search engines and the ranking of their search results and as a result search engines are attaining the status & trust of public institutions, such as the government, hospitals etc. As a consequence users blame themselves, not the search engine if they are unable to find something on the internet. (Even if some tricky scientists have actually reversed the order of the search results.)

However, users are very biased towards ads on SERPs, but if a company is ranked within the top search results AND its ads are displayed next to the search results at the same time, the likelihood of a user transaction is increased and the brand displayed in the search result and the ad are remembered better. This of course raises questions as to whether the search engine benefits from ranking the website of the advertiser and its ad very high, as users apparently see Google’ ranking as a kind of “neutral opinion” and are thus more likely to carry out an transaction. However, Google strongly denies that it favours websites in its ranking which also display ads through it Adwords service. Nevertheless there is a fertile market for conspiracy theories…

Although “people just ain’t no good“, I am of the opinion that Google most probably does not generally accept money to change the ranking of search results (Keyword Buying), as such a practise would, if proven before the public, cause an immense uproar among users and trolls and users might shift to other search engines. Losing users and market-share would then of course also mean losing advertising revenues. Accordingly, I don’t believe that manipulating search results on a large scale would prove to be a good and sustainable business practice.  [6.]

3. How many people know about Keyword Advertising:

According to Fallows (2004), only 38% of the users actively knew about the existence of paid ads on search engines. Only about 16% of users said that they were sure they could tell the difference between paid advertisements and the search result. [7]

Other studies come up with pretty much exactly the same percentages, but point out that knowledge increases with internet experience. Whilst only 24% of people who have used the web for less than 6 month knew about the existence of paid ads, 46% of users who have been online fore more than 2 yrs were aware of the phenomenon. The highest degree of knowledge, 63%,  was however found among college students who said that they use the internet more than once a day. [8]

4. Knowledge about How Search Engines finance themselves:

User knowledge about how SEs finance themselves is very, very poor. Some authors found that less than 10% of users know that SEs are financed through advertising. Still, most users just don’t really seem to care HOW search engines finance themselves. [9]

5. Do Users notice the Ads?

Yes, but not consciously, as apparently at an early stage of their internet experience users learn that most of the ads displayed are not relevant for them and thus ignore them. A German study has found that only 5,4% of all “fixations” (fixation: the act of not only looking at an object, but also looking at it long enough to consciously process the object) are targeted at ads. This percentage was higher for transactional/commercial searches. When measuring attention in clicks, during a first search the first three search results were clicked more often than the ads, while for an extensive search with multiple searches the ads were clicked on less often than the fifth search result. [10]

Other studies find that only about 15% of all clicks are on the ads and most people seemed to ignore the ads. In more than one third of all searches there is no click on any ad. [11]

6. How relevant are ads -objectively- for internet searchers?

Users are biased towards ads on SERPs and tend to rate ads as being less relevant for their search then they objectively are. Studies have shows that more than 77% of all users favour organic links more than ads. [12]

Still, when being asked how relevant the sites were to which the ads have let the users, the users rated these websites to be as relevant as the links from the organic search results. So in fact ads prove de facto to be as relevant for searchers as (organic) results.

This result truly surprised me, but a factor that should be taken into account in this respect is that Google has stipulated stringent guidelines about how a landing page (that is to say, the website you navigate to after clicking on the link in an ad) has to look like (Landing Page and Site Quality, e.g. the product has to be  easily identifiable and the price has to be clearly stated etc.)  So it seems that the rise of quality/relevance for the user through these Google Adwords guidelines even compensates for the fact that advertisers can influence the ranking of an ad by changing their bids on the keyword.

Summing up the findings of Jansen/Spink, users are unjustifiably biased towards ads. However, if ads were not marked as ads users would notice no difference. Therefore, so as to maximise search efficiency the authors suggest that the separation between ads and search results should be abolished, as labelling the ads as advertisements triggers bias in a user’s brain and as a consequence hinders the user from performing more efficient searches. Furthermore, the authors point out the fact that ads are kind of an insurance against the users’ “blind trust” in the ranking of search engines (primacy effect, *Does Google’s AdWords Trademark Policy impair Freedom of Speech?) [13]

CONCLUSION: Having written and  cited all the studies above I’d like to point out again that there is no simple explicit study relating to the question of the likeliness of confusion - insofar I agree with Bednarz/Waelde. Still, I think the German Supreme court and the AG might have been a bit too quick when stating that users will under no circumstances establish a link between the ads and the search term/brand entered. However, on the other hand the other extreme view as brought forward by  e.g. French Courts is outdated and most probably not correct either.

In my opinion the truth lies somewhere in between and I most agree in this respect with the District Court of Massachusetts, which brought forward  a 7 factor test for checking for a likeliness of confusion, which allows taking into account factors like the the web-savviness and sophistication of the plaintiff’s potential customers as well as the content of the search results webpage that was displayed, including the content of the advertisement [Top-Ad, Side-Ad; Adv+, Adv-], etc… [14]

Endnotes:

1: Bednarz/Waelde, Search Engines, Keyword Advertising and Trade Marks: Fair Innovation or Free Riding? in Edwards/Waelde (Pub), Law on the Internet (2009) p.304

2:Hargittai, Second-Level Digital Divide: Differences in People’s Online Skills (2002) p. 12

3: Howard/Massanari, Learning to search and searching to learn: Learning to search and searching to learn: Income, education, and experience online (2007); Hargittai, The social, political, economic, and cultural dimensions of search engines: An introduction (2007)

4: Eimeren/Frees, Internetverbreitung: Größter Zuwachs bei Silver-Surfern (2008) p. 334; Fox, Generations Online December 2005, PEW Intertnet & Amercan Life Project (2005)

5: Fallows, Search Engine Users: Internet searchers are confident, satisfied and trusting – but they are also unaware and naive (2004) p. 12; Hargittai, The Role of Expertise in Navigating Links of Influence, in Turow/Tsui (Hrsg), The Hyperlinked Society: Questioning Connections in the Digital Age (2008) p.  11; Spink/Jansen/Wolfram/Saracevic, From e-sex to e-commerce: Web search changes (2002) p. 108

6: Fallows, Search Engine Users – Internet searchers are confident, satisfied and thrusting – but they are also unaware and naive (2004) p. 27; Fries, Suchverhalten im Internet (2007) p. 72; Pan/Hembrooke/Joachims/Lorigo/Gay/Granka, In Google We Trust: Users’ Decision on Rank, Position, and Relevance (2007); Yang/Ghose, Analyzing the Relationship Between Organic and Sponsored Search Advertising: Positive, Negative or Zero Interdependence? (2009) p. 26; White, Search Engines: Left Side Quality versus Right Side Profits (2008) p. 29.

7: Fallows, Search Engine Users: Internet searchers are confident, satisfied and trusting – but they are also unaware and naive (2004) p. 17; Hargittai, The Role of Expertise in Navigating Links of Influence, in Turow/Tsui (Hrsg), The Hyperlinked Society: Questioning Connections in the Digital Age (2008) p.  11

8: Princeton Survey Research Associates, A Matter of Trust: what Users Want from Web Sites (2002) p.  17; Hargittai, The Role of Expertise in Navigating Links of Influence, in Turow/Tsui (Hrsg), The Hyperlinked Society: Questioning Connections in the Digital Age (2008) p.  12

9: Machill/Welp (Pub), Wegweiser im Netz (2003) 190; iCrossing: How America Searches (2007) p. 12.

10: Erlhofer, Informationssuche im World Wide Web: taktiken und Strategien bei der Nutzung von Suchmaschinen (2007) p. 125, pp. 160

11: Jansen/Spink, Investigating customer click through behaviour with integrated sponsored and nonsponsored results (2009) p. 74, 90; Höchstötter/Lewandowski, What Users See – Structures in Search Engine Results Pages (2009) p. 12; Jansen/Resnick, An Examination of Searcher’s Perceptions of Nonsponsored and Sponsored Links during Ecommerce Web Searching (2006) p. 1958

12: Hotchkiss/Garrison/Jensen, Search Engine Use in North America (2005); Greenspan, Searching for Balance (2004);

13: Jansen/Resnick, An Examination of Searcher’s Perceptions of Nonsponsored and Sponsored Links during Ecommerce Web Searching (2006) pp. 1958

14: Schubert/Ott, Adwords – Schutz für die Werbefunktion einer Marke?, MarkenR 2009, 341.