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Transcript of Webwatch Search Engines Research from “Trust or Consequence: How Failure to Disclose Ad Relationships Threatens to Burst the Search Bubble”

Jørgen Wouters, Consultant to Consumer Reports WebWatch

Other Speakers:

  • Jared Spool, User Interface Engineering
  • Dr. Stephen Barrett, QuackWatch
  • Dan Thies, SEO Research Labs
  • Danny Sullivan, Search Engine Watch
  • Eric Lai, East Bay Business Times
  • Beau Brendler, Consumer Reports WebWatch
  • Bill Kelm, SEO-SEM Consultant
  • Ed Blonz, Columnist
  • Matt Cutts, Google
  • Patricia Thomas, University of Georgia
  • Mara Hannula, Marriott Hotels
  • Ruth Amernick, San Francisco Public Library
  • Pam Dixon, World Privacy Forum

Note: This is an edited transcript of the proceedings.

Jørgen Wouters: I’m going to speak a little bit this morning about Still in Search of Disclosure, which is an update of a report we put out last November, which was based on some research we did just about a year ago – research that took place last May, where we examined 15 of the most-trafficked search engines and evaluated them based on FTC recommendations.

This report here was conducted, as I said, just about a year later and for this round, I essentially went back and looked at the same 15 search engines and, using the research we had done last year as a basis and a groundwork, seeing how some of the engines had improved, how some of them had perhaps slid a bit, and how some of them had stayed the same. I will jump into this and again I’d encourage any of you to ask questions at any point, feel free to interrupt me. And if the mike kicks up, please let me know.

As I said, a year ago, research by Consumer Reports WebWatch revealed that many of the most popular search engines are failing to clearly disclose advertising within their search results. Follow-up research by WebWatch confirms these insufficient efforts to inform consumers about the financial forces at work every time they hit the search button.

WebWatch began investigating the relationship between advertising and search engines in 2002, when it published a survey that showed that 60% of respondents had no idea whatsoever that search engines are selling rankings on the results pages.

The Federal Trade Commission actually cited these findings later that year in a warning letter to the search engine industry, one that called for clear and conspicuous disclosure of the two most prevalent forms of search-based advertising, which are paid placement and paid inclusion.

Now, paid placement, as many of you know and perhaps some of you don’t, is when the search engines allow advertisers to bid for the highest spot on the results pages. Paid inclusion also charges advertisers a fee to increase the likelihood they’ll appear somewhere in the search results, without a guarantee of ranking.

Is there anyone here unfamiliar with either of these terms? Well, you are an exception, because consumers, quite a few of them, have no idea this is going on. In fact, a study we did in 2003 only underscored the lack of awareness among consumers.

In one study, participants clicked on sponsored listings 40% of the time and had no idea that these were, in fact, advertisements. And when we informed them of this fact, the range of emotions ran the gamut from surprise to anger, frustration – they weren’t pleased.

Last year, WebWatch decided, as I said, to evaluate the compliance of the 15 most-trafficked search engines with FTC recommendations. The study found that these 15 here had made efforts to satisfy the FTC recommendations, but compliance varied greatly. Some sites clearly highlighted advertising within their search results pages, while others seemed intent on blurring the distinction between paid and non-paid results. This latest report builds on that research and re-examines those same 15 engines.

A year is a long time in cyberspace and many of the engines have undergone a number of changes. Unfortunately for consumers, not all of them have been for the better. Comparing current levels of disclosure to those a year ago, we found that some of the best search engines have gotten worse, a few of the worst have gotten better, and about half remained the same.

For example, you can see Ask Jeeves. Disclosure headings are more faint. They’ve removed disclosure hyperlinks to disclosure pages. They’re harder to find. CNET, which last year we faulted for the fact that it did not really adequately disclose paid inclusion whatsoever and didn’t link to any sort of paid placement page, now has added pages for both and actually does a much better job.

Other sites, such as Google, exactly the same as last year, they do a very good job of disclosing paid placement and they don’t do paid inclusion – at least not yet.

Overall, our findings reinforce a troubling trend that we noted a year ago, that many of these engines are doing as little as possible to comply with FTC recommendations and some of them seem to be doing as much as possible to camouflage the presence of advertisement in search results.

WebWatch’s ample body of research shows that consumers want to know whether their search engines are selling rankings. And our research also shows that they have trouble finding and understanding these disclosures.

Because of the importance consumers place on the integrity and transparency of search results, the industry needs to enhance the effectiveness of disclosures to ensure that they’re noticed and understood. If not, search engines risk losing credibility with the audience they’re competing so fiercely for: Consumers.

Before I get into the major findings, I’d like to show you an example here of what exactly it is we’re talking about. This is a search page from Netscape. This is a heading. This is the hyperlink. This is here to let consumers know that these are indeed advertising, they’ve been paid for. This link will take you to a disclosure page which will explain that. Netscape looks much like it did last year, except that last year, this sponsored links is bright red, now it’s gray. And this is a trend that we found in more than a few of the major search engines.

In fact, our first major finding is that disclosure headings are fading. Eight of the 15 engines we reviewed for the 2004 study labeled paid placement and paid inclusion listings with small and very dull-colored headings. Since then, five of the others have either muted the color of their headings, reduced their size, or gotten worse. [They are] five of the engines, which are actually five of the top engines, that did the best job last year. AltaVista, Netscape and Yahoo!, which all used highly visible, bright red headings, now use gray, which seems to be the industry’s new favorite color.

Does anyone have trouble seeing this? Does anyone think it’s a coincidence? Last year sponsored matches was that color. Now it’s this color.

The use of inconspicuous headings greatly increases the likelihood of consumers never discerning the true nature of their search results.

The second major finding is that paid placement hyperlinks are vanishing. Some of the major search engines last year – AltaVista had a little “About” hyperlink. Click on it, and it took you to a disclosure page. Ask Jeeves, gone. MSN Search, gone. Yahoo! Search – Yahoo! has changed their disclosure methods a bit and we’ll talk about that a bit later on.

Although AltaVista and Yahoo! still hyperlink to disclosure pages, they do that by hyperlinking the header. Actually, this is Ask Jeeves, which no longer does that. But I can say a year ago, Ask Jeeves had a little “About” hyperlink right here. It’s since been removed. If you want to find out exactly what “Sponsored Web results” means, you have to dig down into the pages themselves, into the Help pages and it takes more than a few clicks.

And last year, by the way, “This Sponsored Web Results” was about four font sizes bigger and a bit darker – a bit brighter, rather.

AltaVista and Yahoo! still allow consumers to reach a disclosure page, but they do that by hyperlinking the header. And these headers are not underscored and there’s no way of knowing that they are in fact hyperlinked unless you mouse over them. There’s no indication whatsoever, unless you do happen to do that.

While some of these engines may still exceed FTC guidelines by offering a separate disclosure page, they’re not doing consumers any favors by making them hard to find. And, again, the FTC only requires a header and not a hyperlink to a separate page. And that’s one thing we pointed out last June; we commended many of these engines, they were going above and beyond what the FTC called for, which we applauded. Now they’re doing just about what’s required and nothing more.

We’ve also found that some paid inclusion hyperlinks have been removed. Unlike paid placement, paid inclusion does require a separate disclosure page. And we’ve found that some of these engines have deleted these links from their pages. As I pointed out with Ask Jeeves and Alta Vista, these links are gone; they’re now linking to headers. Again, unless you know this header has been hyperlinked, you’re not going to know what this means.

Yahoo! has also removed a once-prominent “What’s This?” hyperlink. Yahoo! used to have a little header here that said “Top 20 Web Results” and then a little hyperlink that said “What’s This?” Well, that’s gone now. Instead you have this box, which isn’t quite showing up here. This is a blue-shaded box which shows their paid placement results. And here are some more paid placement results. This down here, these listings are paid inclusion listings. The header that used to be there is now gone. There is a – oh, great, I think the battery in my laser just died. Going to have to do it this way.

This may or may not be meant to be some kind of a header for the paid inclusion listings, but the only way you can find out that paid inclusion is taking place is if you happen to click on this – this link in the upper-right-hand corner, which happens to rest above the paid placement listings.

You have your own laser?

Jared Spool: I do.

Jørgen Wouters: I’m impressed. Wait, what’s stun and what’s kill? OK, got it.

Again, although these modifications by AltaVista and Yahoo! may still technically meet FTC guidelines, they are a far cry from the levels of disclosure that we applauded a year ago.

We’ve also found that most disclosure hyperlinks remain small and grey and out of the way. This is a page from My Search. This is actually the bottom right-hand corner of the page and this is one of about half a dozen links. And only if you think to – I don’t know how many of you, when you use search engines, tend to go to the lower-right-hand corner of the page, but if you happen to do that, you’ll see this “About Search Results.”

Last year, only three of the engines tested – Yahoo!, AOL and Lycos – used colorful and noticeable hyperlinks. The rest of them were small and faint. AOL and Lycos are the only two search engines we’ve tested now that still use relatively visible hyperlinks and place them next to headings, as the FTC recommends. Most of them, though, tend to be down here and apart from the listings they’re meant to explain.

Although disclosure links are meant to be noticed, most either blend with the page or are so far away that they’re easily missed. The continued use of eye-straining and often buried hyperlinks makes it likely that consumers will never see these disclosures in the first place.

It’s not all bad news, though. In fact, one of the more encouraging results we found was that, of the three meta-search engines we’ve tested which we found last year were all sorely lacking in disclosure, two of them have gotten much better. One of them is CNET’s Search.com. Last year, it disclosed paid placement listings with only a heading and it failed to disclose paid inclusion whatsoever. Now it offers a well-worded disclosure page for both. Nice, clear language, very simple to find, and they’re both linked off the respective headings.

Another meta-engine that we tested last year, WebSearch, last year was the only engine that mixed paid placement and paid inclusion listings without any attempt whatsoever to differentiate them. If you look at them now, each [listing] has a little “Sponsored by,” “Sponsored by.” So the paid placement listings are now disclosed and there is also a disclosure page which has also been completely overhauled.

Infospace, however, which also disclosed paid placement listings on a listing-by-listing basis, however, has truncated its disclosure page somewhat. Last year, it offered about a paragraph of explanation; now it offers a sentence. And this is their disclosure: “Paid placement. Engines that return relevant sponsored listings.” We may understand that, but I’m not sure that consumers will.

Finally, as a way of summing up all of the trends I’ve been talking about, I think it would be instructive to look at Yahoo! Not to pick on Yahoo!, but because Yahoo! last year was probably one of the very best engines we tested and it really did a fantastic job, we thought, of clearly – if you look at this page here, very clear sponsored results. “What’s This?” [heading] It’s not gray, it’s blue. It’s right next to a heading, it’s easy to see. “Sponsored results,” over here, is separated in boxes. And most importantly, down here, “Top 20 Web Results,” “What’s This?” – these are their paid inclusion listings. If you clicked on this, you went to a disclosure page. If you clicked on that, you went to a disclosure page. They also used as graphical elements nice, bright red line to separate everything out. I mean, they did a very – they were as good as anyone and better than most.

This is what Yahoo! looks like now. Again, this is a blue-shaded box, somewhat like another search engine some of you may have heard of (Google). They also put their listings on the right-hand side here. But again, if you see, this bright red “Sponsored Results” is now over here. It is now gray. And there is no hyperlink – although this heading, again, if you mouse over this, it turns blue. The “Web results” down here, which are the paid inclusion listings, the heading is gone. You have a heading up here, but the only way, again, you can ever find out what’s going on in here is if you happen to go there.

They do, although, have something called the Yahoo! shortcut, which involves content promotion, which is a whole other issue entirely. But interestingly enough, the Yahoo! shortcut is disclosed with a hyperlink. But the paid inclusion is only disclosed up there.

Any questions? Comments?

Speaker: I’m just curious why you think the search engines have gone from red – the most prominent, eye-catching colors to gray colors in either their hyperlinks or non-hyperlinks denoting sponsorship?

Jørgen Wouters: I can’t read minds, but it seems to us and it seems to, based on the testing we’ve done, both using information professionals and consumers, if you use gray, people are going to tend to miss it.

Speaker: Why do they want them to miss it?

Jørgen Wouters: Why do they want them to miss it? Maybe they want them to click on ads, because every time someone clicks on that, money is changing hands. I mean, we’re not against, we’re not anti-business and we understand that people are in the business of making money. And we have no problem with advertising, per se. But our problem is that we need to have full disclosure of what’s going on. And I think consumers – we live in an advertising-saturated society, and we’re busy getting marketed left, right and center. You can’t jump in a cab or take an elevator or do anything.

And I think now, as we well know, people are using search engines for everything. I mean, booking flights, health information, what have you. We think consumers have a right to know when they’re clicking on something – is this unbiased, objective information or is this someone who just paid someone some money to stick in there? All we’re asking for, if it’s an ad, call it an ad.

Speaker: So studies have been showing that people will shy away from ads and go for the more organic.

Jørgen Wouters: Well, the studies – we’ve shown is that people aren’t necessarily opposed to the advertising, but let’s face it, a lot of us who go on the Web, we want products. I mean, I’ll go on the Web and try to find a good price on fly line or guitar strings or what have you. But when I do that, I don’t want to click on something that looks like some objective, unbiased result. And WebWatch has done research to show that consumers – one of the studies we did in 2003 – 40% of the time consumers clicked on paid placement listings, they had no idea it was advertising. And some of them got quite upset when they found out. They acted as if they’d been betrayed by their best friend – “How could my search engine do this to me? I had no idea.”

And, again, I think part of the problem, too, is that people in this industry, it’s very inside baseball and we get used to thinking, well, sure, everyone knows what this means. And we put it in a blue box and sure, everyone knows it’s an ad. I think as you saw from the video presentation at first, some people think that putting a listing, segregating it in a blue box just means hey, here’s the best thing, here are the best results that showed up. Not necessarily that, oh, these are the ones that people paid for. Again, we have nothing against paid placement, paid inclusion – just be upfront about it.

It does seem to us that search engines, especially – let’s face it, five of these engines dominate 80% of the market: Google, Yahoo!, MSN, Ask Jeeves. And most of those top five seem to be shying away from bright, bold headlines and separate disclosure links and all these things. People want to know about this. I think, sooner or later – and we’re doing our best to make sure people do find out about this and we think that when people do find out what and what is not being disclosed, they’re going to be angry and they’re going to go somewhere else.

Speaker: I believe, I don’t know whether this is on – Web design is an evolving medium. It constantly changes. Now, you’re implying that the change from red to gray has some devious side to it. Has anybody captured any data which would, say, in a consumer group, give them comparative exposures and then interview them afterwards to find out if, indeed, by making that shift, people are less likely, less informed of the types of information which either might or might not be displayed?

Jørgen Wouters: Well, that’s a good point, but I should also reiterate that what we’re stating here and what we’re using as a benchmark are FTC recommendations and the FTC states quite clearly that, if you do label these, make it clear and conspicuous. And by that, they mean that these things should be noticeable.

I mean, there’s about an 83-page booklet, “Dot-Com Business Disclosures.” And they point that, for instance, if you have a heading, it should not be smaller than the listings. It should not be duller than the listings. It should be bigger, it should be brighter, it should stand out. And if you look at – if you can go back to the old Yahoo! slide, I think that tends to kind of stick out a bit more. Maybe it’s just me, but I think your eye gets drawn to that.

I mean, your point is well-taken, but again, the FTC states quite clearly – and, again, that’s what we’re – we’re not pretending to be arbiters of this – these are recommendations that were handed down for the engines to comply with or not. But they have stated more than once that these are things that they feel are important. Which is why we do.

Speaker: I’d like to also respond to that question [unintelligible] information about that, about [unintelligible] color [unintelligible] not respond to, although they actually think blue is one of the more credible colors for Web site design. I guess I would say, it’s just sort of simple logic. If you want to call attention to something for somebody on a page, you put a headline over it. You don’t make it smaller and more faint. So, although the Web is an evolving medium, I think basic visual cues of publishing aren’t evolving. I mean, if you want something to stand out on a page, you put a headline over it and make it capital letters and make it red. You don’t want them to notice it, you make it small.

Speaker: I just want to add a point – I was in print advertising for 20 years, along with online advertising for the last 13 years. And we sold red ads. And the reason that we were always told that red was sold at an extra price that is, number one, based on surveys, it is the most attention-getting color there is.

Is there an FTC regulation violation or is there a way to enforce changes in Web site pages that are not really disclosing, that are muffling results or not really disclosing? What action is taken or what does the FTC do about it or how does it work?

Jørgen Wouters: Well, what the FTC has done about it has sent them a letter.

Speaker: They read their mail?

Jørgen Wouters: Good – I don’t know, I think maybe some of it got lost in the mail. All of this result, this came about from a complaint that was lodged in 2001 by Commercial Alert, a consumer watchdog group. They charged I think eight of the major search engines at the time of deceptive advertising practices.

A year later, the FTC responded with a letter, to which I referred. Which was a letter to the industry and talked about the fact that they needed to do a better job of disclosing both paid placement – and they pointed out at the time that some of them were doing a very good job of paid placement, others were not. At that time, they said none of them were doing a good job of disclosing paid inclusion.

The FTC in its letter then laid out some guidelines, referred the search engines to this booklet, which is all available online, of course. But they also refrained from taking action. About the strongest language they had in the letter was that they urged search engines to take these steps in order to prevent any possible future action by the Commission. But in terms of any enforcement mechanism or what have you, no, that does not exist. At least not now. Yes?

Speaker: Yes, I’m getting a little disturbed at the commonsensical, nonsensical questions. Now, myself, I sort of hurt my eyes getting through Berkeley and I can’t see the damn gray. And everyone knows, you just go down the freeway, see the highway patrol, they’ll pick out the red cars first.

We can get into human factors analyses and be bogged down for the rest of the day if we don’t take it for granted that — the military spends billions on what color the pilot is going to see immediately in terms of discrimination. So the studies are there, the experts are there and I’m just hoping we’re not going to get bogged down in – I’m sorry, these are dumb questions, just take it for granted that people who are trying to get their stock prices up are going to do everything they can to grab your attention to the disadvantage of a competitor and hope that we can go on.

Jørgen Wouters: Thank you for your comment.

Dr. Stephen Barrett: Since one of the great things about these kinds of meetings is networking, I’d like to suggest that whoever speaks from the floor disclose who he is or she is.

Jørgen Wouters: Can you tell us who you are?

Dr. Stephen Barrett: Sure, Steve Barrett, I’m Dr. Stephen Barrett, I run the Web site Quackwatch.

Jørgen Wouters: Do you take paid placement?

Dr. Stephen Barrett: Paid placement? We have sponsored links that are clearly identified. We don’t get any money from people to put them there. Some of them are click-throughs where we get a commission.

Jørgen Wouters: Right.

Dan Thies: You had sort of more than once described the Web search results as paid inclusion results. I’m just now sure if it’s clear to folks here that don’t know search – I know it’s not clear that use the search engines, that in the Web search results, there may be some results that are there as part of a paid inclusion program, but not necessarily all paid inclusion. But the issue I guess is more that they don’t disclose that that exists.

Jørgen Wouters: And also, when you say “Web search” are you talking about the engine Web Search or Web search in general?

Dan Thies: Well, if you were looking at Yahoo! under the top 20 Web results.

Jørgen Wouters: No, that’s a fair point, yes, that’s a very good point. When I talk about paid inclusion, it’s not to say that every single listing in there has been paid. And Yahoo! in its disclosure page says that only 1% of all of the listings paid. Of course, it’s impossible to tell. But, no, that is a very good point, not all of them have it.

Frankly, that is one reason why a lot of people have argued that paid inclusion listings should be highlighted listing by listing. I mean, if only 1% of Yahoo’s listing paid to be in there, why not just mark them with a little icon or asterisk?

Dan Thies: Well, Yahoo! could put a beautiful blue star next to it and call them premier results or something if they wanted.

Jørgen Wouters: Exactly. But, again, that is a good point, that not all paid inclusion listings are necessarily paid for.

Dan Thies: I’ll disclose that I’m Dan Thies, hello.

Danny Sullivan: Danny Sullivan, Search Engine Watch, I’ll be on one of the panels later. Google’s had gray for as long as I can remember.

Jørgen Wouters: Yes, they have.

Danny Sullivan: So I’m just wondering, they tend to be held up as very clear and it’s disturbing to see the ones, [unintelligible] go back, because you feel like they’re downplaying it, but at the same time, they also do imitate Google.

Jørgen Wouters: They do.

Danny Sullivan:
So do you feel like that needs to go to red on Google? Or do you feel like people are more comfortable there?

Jørgen Wouters: Well, Google’s an interesting case. Let’s face it, a lot of people tend to use Google and Google was actually one of the very few engines not listed in that FTC complaint. And, in fact, when we did our research last year, we relied on some information professionals. All of them criticized Google for the fact that the sponsored listings heading indeed was a very faint gray. But, actually – did we have a Google page up there? I think we did. Maybe not. No, I don’t think we did.

But with Google, though, one thing that people did like about Google was, for one thing, they segregated their listings on the right-hand side. And that the sponsored results over the top column were in this blue box. I think the blue box and the segregating on the side kind of mitigated the fact that that heading was faint. But people did, indeed, criticize it.

Another thing people criticized Google for, which is interesting, is that Google is the premier supplier of paid placement results. And the interesting thing is that a lot of search engines that rely on Google actually are much more forthcoming about what these results mean than Google itself, which was an interesting little finding that turned up last year. I mean, if you go onto a – oh, yeah, there we go. If you go onto AOL, for instance, they rely on paid placement results from Google. They give you a disclosure and they point out how that program works, that these listings are supplied by Google. If you go onto Google itself, I don’t know, type in anything – yeah, digital cameras, yeah, that’s fine.

Now, again, Danny raised a good point, the “Sponsored links” doesn’t exactly jump out at you. And people did criticize that. But the fact is that these are segregated in a blue box and that these are also segregated off on the side. Again, with Google, they were never mentioned in the original complaint.

Speaker: I mean, Yahoo! also segregates [unintelligible].

Jørgen Wouters: Yes, exactly. Yahoo! and MSN now are a lot like Google. In fact, although we do fault the fact that they’ve gone to the gray, I do mention in the report that at least they are segregating them in this box. I think the main fault we found with Yahoo! now was this paid inclusion business.

And also, with Google, if you do click on this, some people may do that, that’s going to take you to this advertiser. Which is another thing we found fault with, as well. I mean, it is a little deceiving, if you do click on this, but this whole box is hyperlinked – ah, there you go. Someone just got 10 cents.

Eric Lai: Hi, I’m Eric Lai, I’m with East Bay Business Times. It seems one of the things we’re talking about, ultimately what we’re talking about is we want to see good quality results for consumers. Do you think it’s important, then, that – what about sites that sort of game the search engine results and turn up obviously commercial, blatantly commercial bad results? Let’s say I’m trying to search something like an Asian business. Well, I’m going to turn up a lot of sex sites, obviously, right?

Jørgen Wouters:

Eric Lai: Do you think that search engines should take more responsibility to try and sort of wash those bad results out?

Jørgen Wouters: God, I don’t know, that’s a – I think you’d probably throw out a lot of the good with the bad doing something like that.

Beau Brendler: I was going to say, why don’t we just try do a search on 1st Blaze?

Jørgen Wouters: Oh, yeah.

Beau Brendler: 1st Blaze is sort of a mystical search engine to us, we can’t really figure out why it’s in the top 15. No, go to www.1stblaze.com

Jørgen Wouters:
There you go.

Beau Brendler:
Yeah, this is sort of a mystery to us.

Jørgen Wouters:
Digital cameras, yeah. This is one of our favorites, this is fun. Okay, now, if you look at 1st Blaze, which is – you’ve got some digital cameras also, but if you scroll down… Now, the interesting thing is last year, we tested 1st Blaze using a variety of search terms. And we’re not really sure what’s going on with 1st Blaze. I mean, we tend to think there’s some paid placement going on, maybe some paid inclusion. There’s no – we’re not sure. There’s no disclosure whatsoever. We sent them an e-mail and we got a bounceback. We did it last year, we did it this year. We don’t know where they are or what they do or what’s going on.

But the fascinating thing about these guys is I ran through digital cameras this year, which I did a year ago. And you get these featured sites. And we got the exact same four results that we did a year ago: Win $10,000, Easy Credit, Looking for Love, Get a Degree Online. I don’t know if it’s – someone’s paying a lot of money to keep those links up there, because they’ve been there for a year and it doesn’t matter what you search for. You could search for Byzantium or you could search for the Red Sox or digital cameras – they’re going to show up.

So in terms of trying to wash results, maybe these guys might want to do that, but I would be loathe to suggest it, that we should think about filtering results.

Bill Kelm:
My name is Bill Kelm and my company is SEO-SEM Consultant Broker. I was just curious if an analogy could be made between the infomercials and the nondisclosure originally of infomercials and the somewhat nondisclosure within search engine results, SERPS. I did a little research before I came here and back in 1998, there was a settlement that said – to settle the SEC charges, Kevin Trudeau will pay $500,000 in consumer redress, infomercial producer, Megasystems International will pay $500,000 also for consumer redress.

Do you think it’d ever get to that point with online search, that the nondisclosure factor would upset the FTC to that point? And the reason I ask this is that, let’s say you click on a paid placement link. If that Web site has good navigation and is user-friendly and it’s 100 pages long, you could easily spend a half an hour or 15 minutes, going through that one Web site. So, in a way, it’s almost an infomercial. So I was wondering, do you think it would ever get to that point, as it did with the infomercials?

Jørgen Wouters: I don’t think the FTC would want to get there. I can think of a few lawyers who might be happy to hear of this. I think just because of the nature of the Web, too, and the nature of the medium and the [unintelligible] we’re talking about, I don’t even know – it’s probably Moore’s law cubed that applies to the proliferation of sites and such. I don’t know, it may well happen.

Again, the Internet is playing such a huge role in everyone’s lives right now. A lot of the information we’re searching, again, it’s not just tickets and movies, it’s health information. You can have a family member who’s dying of a certain disease and you’re trying to get information on it or what have you. But in terms of if it’s going to go down that road, I do not want to make any predictions.

Ed Blonz: One more point, my name is Ed Blonz, I’m a syndicated columnist and I have my own Web site where there’s no paid placement or click-through anything. But the thing that I found is, because I have my own Web site and it deals with health information — it’s called the Blonz Guide — I am always being approached by people that want me to pay them for placement. And they will guarantee first-page placement. This has nothing to do with a relationship with a search engine itself. It has to deal with the formulaic calculation of how many appearances of a name in a certain location it takes with the search engine’s calculations. So we have these outside businesses in addition to the search engines with their hand out, so there’s a couple of things going on here in terms of revelations.

Jørgen Wouters: Oh, yeah, there’s an awful lot going on here. And I don’t pretend to know every last bit of it. Any other questions? Danny?

Danny Sullivan: Do you think we can come up with one sort of standard cue or one standard way that they can all adopt? I mean, we can say it should be red, it should be blue. I kind of feel like, I don’t necessarily care, as long as there’s some way I can say to a consumer, if you see this, this tells you what’s going on. Then the consumer can get educated. But it’s difficult, because we can’t say put everything in a blue box, because it may not make sense to the design of somebody else’s site, but is there other ways that you’ve thought–?

Jørgen Wouters: Yes, that’s a very good point and the FTC actually makes this point in their letter. They point out that they realize these people are in business and have certain aesthetic considerations and that not everyone can be required to use a certain listing in a certain font, in a certain color.

But I’d like to think that maybe there is some middle ground, between – you know, they left it very wide open. As opposed to saying, Thou Shalt Use Times New Roman 14 in Red or what have you. But it is a good point.

I mean, as you well know, at least in terms of paid placement, there’s a little variation there – “Sponsored Results,” “Sponsored listing,” what have you. I mean, the word “sponsored” tends to be the operative one. But I know what we’re talking about is not so much the wording, but the looks. In terms of coming up with something [unintelligible]. Maybe [unintelligible].

Speaker: Can you talk about disclosing different types of sponsored results? Say there’s an image or say there’s just Fly To Florida Now, like you showed the one site where it’s always been the same over a year. Is there a need to disclose in the text ads, “This is related to your search?” In an image ad, where there’s a button that says, We Like to go to Florida, You Should, Too?

Jørgen Wouters: Are you talking about banner ads for saying things like that? Because obviously, this is not the only kind of advertising going on in these sites. There could be banners and other sorts of things.

Speaker: Oh, yeah, I understand that, but in this case, so for Yahoo! or for Google, they would say, okay, we’re looking at your search terms and we’re giving an ad that’s based on that, because we think it’ll be more relevant.

Jørgen Wouters:

Speaker: But in the case of the 1st Blaze search engine, it would just be here are five words that we think, or five sites that we think match your needs.

Jørgen Wouters: Well, with 1st Blaze, again, they’re a mystery. I mean, they really are. They’re an enigma. With some of the other sites, Yahoo! and some of the others now are offering something that’s kind of in-between, which I got into in last year’s report, which is called content promotion. And that’s a kind of an area where you can – the sites claim that they will use their own listings and use partner results and it may involve some paid placement, what have you – I mean, that’s a third type.

But, again, as far as we’re concerned, if someone paid to put something on a page, especially if it involves any kind of ranking, if it’s going to be up on the top of the page – because research has shown most consumers don’t click through several pages. Research we’ve done has also shown that, when a page comes up, consumers tend to click on the first links they see. They’re not going to bother scrolling down and they’re rarely going to click to a second page, because they just think, well, this has to be the best one.

And everyone’s in a hurry, attention spans tend to be declining, so they’re probably going to notice that little sponsor results or what have you. I don’t know if that answers your question, but.

Hi, I just wanted to say I think Danny Sullivan’s question was an excellent one. I think, as a consumer now, I’m speaking as a consumer, what I’d like to see is that every place there’s the words “sponsored links,” “sponsored results,” whatever it is, that that be a hyperlink to a page like Yahoo! does that discloses all the paid placement, paid inclusion, whatever, where it is. It doesn’t have to be red, even though that’s the most attention-getting color. But some other attention-getting color that contrasts with the rest of the page, that makes it stand out.

But I really do believe that we should let the search engines know what the consumers want and that will make advertising resistance on the part of the consumer less. Because with the disclosure, full disclosure, clear and conspicuous, everybody’s going to be happier.

Jørgen Wouters: Right, I agree. And, actually, one of the sites that we did test, Overture, actually does disclose their listings on a listing by listing basis and you click on that, and it takes you right to a disclosure. So every single listing on that page. You don’t have to look at the top and, if you happen to be at the bottom of the page. Actually, just pointed out – why don’t you go to Overture.com? Although I think it’s now Yahoo’s Search Marketing Solutions, but I think Overture still works.

[End of first tape]

Matt Cutts: –in the search engine or rank really highly don’t necessarily show up unless they deserve to show up.

First off, I just want to say, thanks for doing this. It’s fantastic to have this as a forcing function, so that people are thinking about this all the time.

One part that I was a little disheartened about in the original report was the notion that people don’t know that Google doesn’t do paid inclusion, for example. I know that Larry [Page], for example, he talked to The New York Times and said, “Anytime you accept money to influence the results, even if it is just for inclusion, it’s probably a bad thing.”

And yet it was disturbing, I found a couple of places on our Web site, Ten Things We Found to be True and our SEO guidelines – Search Engine Optimization guidelines – where we say we don’t do paid inclusion. But I thought it was really interesting that people couldn’t find that. And so I wanted to tell you a piece of good news.

We were reorganizing our Webmaster pages last week, because we introduced a new product – not even product, because it’s free – called Site Maps, where people can submit their urls. And so we took the opportunity to call that out a little more clearly. So the very first question in the FAQ, the very first section in that, we’ve added a couple sentences to make it more clear: “Google does not accept payment for inclusion, known as paid inclusion, of our sites and our index, nor for improving the rank of our sites and our results. We do offer advertising opportunities adjacent to our results, which are always clearly labeled ‘sponsored links.’”

So the person who would be in charge of making sponsored links darker or making it a hyperlink, to have a more full disclosure so that more people can know, she was actually out of the country this week. I’ll certainly take that back as feedback, but at least that’s a couple of places where we can put it as prominently as possible, not just in quotes or talking to people, but hopefully people can find that information at least with Google, a little more easily.

Jørgen Wouters: No, that’s great to hear. I think, again, if you read the trade press, obviously Google makes that point again and again they don’t want to mix church and state. Obviously, consumers aren’t reading trade press, I don’t think they’re reading much press. It’s good to hear, great.

Actually, just to point out quickly, the point you were making about Overture – just digital cameras is fine – I’m sorry, yes, you had a question?

Patricia Thomas: Pat Thomas, the University of Georgia. I’d also like to follow up on what Danny said. I think what he’s talking about here is developing an icon, a universal graphic symbol that might be usable by any search engine, anywhere. As one example that you can in fact create a new symbol and have it gain widespread acceptance, I would suggest the heart healthy symbol created by the American Heart Association, which is their little red heart with the torch. You can go to thousands of restaurants now and on menu items that supposedly meet American Heart Association fat and salt guidelines, I believe it is, you’ll see that little symbol. Doesn’t matter what typeface the menu uses or what background color the paper is. That symbol is something that millions of people now recognize.

So maybe for the sponsored results, we need something like, I don’t know, maybe a little green dollar or something.

Jørgen Wouters:
I think a dollar sign would be perfect, yes, I agree.

Actually, I just wanted to – hold on one second, I just wanted to make the point what you were talking about with disclosing listings. This is Overture. I mean, it’s a very commercial site, but I do give them credit. Click on “Sponsored listing” there. You can see here, here is the disclosure heading and, if you click on it, boom, there’s your disclosure. And that happens for every listing they have, whether it’s paid placement – they don’t do much paid inclusion, but when they have it, they do that as well.

Mara Hannula: Hi, Mara Hannula from Marriott. And I wanted to just piggyback off what some other folks have said. I’m curious to know if your research goes beyond the issue of disclosure. Because, obviously, that’s one piece of it, but it’s far more complex than just are these paid ads. There’s issues around who’s paying for these ads.

Jørgen Wouters: No, I agree.

Mara Hannula: There’s issues around how are they displayed and what triggers them to appear. And I think that, we haven’t touched the surface of that, but there may be a whole crux of confusion around those topics and did you get at that with this research? Do you plan to get at that?

Jørgen Wouters: This is something we probably would like to explore, but at this point, we limited ourselves to the FTC recommendations, and they were taking the view from 10,000 feet. Obviously, even at this point, things that may be very clear as day to you and I, we’re just trying to focus on things the consumers are going to notice: the paid placement, paid inclusion. But I agree with you, there’s much to this that we would like to explore.

Ruth Amernick: I’m Ruth Amernick from San Francisco Public Library, I’m the health and cookbook librarian. And, I don’t know if you’re aware of this, but Google is not just a search engine, it’s a verb. And it’s called Googling.

Jørgen Wouters: Yes, I’ve heard.

Ruth Amernick: And librarians all over the country are being trained to do Googling. We’re not doing “Yahoo-ing,” we’re not doing these other search engines. So I think it’s a very serious problem and I think consumers are not aware of this, and I think librarians are not aware of this.

The different search sites that you have on this sheet, it’s interesting that there’s Pfizer, who’s a drug company, and then you have National Institute of Health, which is Pubmed and Medline Plus.

Jørgen Wouters: Oh, you’re talking about the health sites.

Ruth Amernick: Yeah, but I think that, considering it would not just be good to suggest this to Google, Google is a major player in this area. And the idea of putting something like a healthy heart symbol or something like that that everybody recognizes, even if you say these things, even for all of us, you had to give a definition of what these words meant and these are people in the industry and we don’t know. And there’s nothing, there’s no footnote at the bottom of their page or anything discussing it.

Very often, when consumers look at this, not everybody has great reading skills. And everybody has great sight. So these little small things, these light colors, it does make a difference. If you’re color blind or you’re not color blind, it’s hard to see. I think this is a more serious problem than most people would think.

Jørgen Wouters: No, and it’s interesting, the point you make. The research we did last year, we had four library science professionals and these are people you would think would know this stuff inside and out – they didn’t. They were often in some respects as confused as some of the consumers.

All right, we have time for one more question.

Pam Dixon: This is Pam Dixon, World Privacy Forum. Just very quickly, I wanted to speak to whoever’s point that was about icons. I think it’s really important to think of icons versus iconographic. Because once you start an icon, you really have to have an organization behind that icon to enforce it. And it’s very problematic. You can see that with the HON [Health on the Net Foundation] icon on health sites, with the Trustee emblem on, for example, for privacy. So this is a continuing issue.

I think that it would be – of course, I don’t know if anyone from the FTC is here today, but I think one of the solutions certainly would be to look at tightening up the iconographic guidelines, and making those – you know, instead of just a header, including a hyperlink and adding something in their guidelines about what disclosure means. I think that would just solve a world of problems, it appears.

Jørgen Wouters: No, I think that’s a good idea. Again, in terms of copyright, if we use a dollar bill, I guess we just have to contact the U.S. Treasury and we’re good to go.

Well, I think that’s – are we out of time? Well, I’d like to thank you all very much for the questions and for your attention and hope you found it interesting.

Beau Brendler: Thank you, Jorgen, that was terrific. Before we take a break, I actually want to mix church and state here just a little bit and I hope you’ll forgive me, but this is the list that I spoke about earlier this morning. The only search engine that’s on there, actually, is Overture. I think we invited a lot of people from the search engine community – I think there’s somebody from Yahoo! here, we know there’s someone from Google here, and there are others. You know, think about this. Think about taking this pledge. Think about putting your name on here.

A lot of the search engines we looked at probably without a whole heck of a lot of effort probably meet the minimum standards here, anyway. So I think part of what we heard in Jorgen’s speech is consumers don’t – we kind of live in a world where we all have T1 connections and we live and breathe this stuff and we know what a sponsored link is. But our research, specifically some of the reports that we did last year or the year before, show that consumers don’t even understand what sponsored – they don’t understand the term “sponsored link.” They don’t know what a “featured link” is.

So this medium is still young, it hasn’t gotten to the point where you know when you’re watching television and something is brought to you by Gillette or whatever, that’s kind of entered into the lexicon of the consciousness. But these terms have not.

So, anyway, we’d like to take a quick 15-minute break and those of you who didn’t get to ask questions, please hang onto them, because we’ll be talking about search and health later on this afternoon and we’ll see you in 15 minutes and Peter Goldschmidt will talk about our health ratings.