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

skills:age

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.

skills:ageStill, 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.

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