AD DISCLOSURE NOTICES GO FROM BOLD TO BLAND ON THE NET'S TOP SEARCH ENGINES

Consumer Reports WebWatch Releases New Report on Ad Disclosure

BERKELEY, CA, June 9, 2005: At today’s conference here, “Trust or Consequence: How Failure to Disclose Ad Relationships Threatens to Burst the Search Bubble,” Consumer Reports WebWatch published a new research report, “Still in Search of Disclosure,” reviewing the status of ad disclosures among the Web’s top 15 most-trafficked search engines. The full report is available at www.consumerwebwatch.org/pdfs/search-engine-disclosure.pdf.

As the Web’s top watchdog, WebWatch revisited its November 2004 study, “Searching for Disclosure: How Search Engines Alert Consumers to the Presence of Advertising in Search Results,” to assess if these engines applied Federal Trade Commission and WebWatch recommendations to their sites.

“Unfortunately for consumers, many changes made by search engines were for the worse,” said Beau Brendler, director, Consumer Reports WebWatch. “In fact, while some meta-search engines improved their disclosure practices, some of the best search engines have become worse. Search engines are gambling with their reputations, their credibility and their customers if they continue this way.”

Key Findings
· Imperceptible Disclosure Headings and Hyperlinks: Eight of the 15 search engines tested labeled their paid search listings with headings that were both smaller and duller in color than the search results themselves. Similarly, with only three exceptions (Yahoo, AOL and Lycos), all search engines tested used tiny and faint fonts – such as light gray – for hyperlinks to disclosure pages. The use of inconspicuous fonts and colors increases the likelihood consumers may not notice disclosures and fail to grasp the true nature of their results.

· Incomprehensible Disclosures: As with testing last year, many disclosure statements about paid placement and paid inclusion were unclear, written in legalese and almost seemed to discourage reading.

· Meta-search engines: Criticized a year ago for their collective lack of disclosure, meta-search engines have largely improved. Two engines tested (CNET’s Search.com and Web Search) have substantially enhanced their disclosure of both paid placement and paid inclusion, although one, InfoSpace, has become worse.

· Paid Inclusion: Since the release of the November 2004 study, two of the top five most-trafficked engines – MSN and Ask Jeeves – have removed paid inclusion advertising. However, among the other nine engines that use paid inclusion, the practice is rarely disclosed.

· Google continues to set the bar: Having never used paid inclusion, Google clearly labels and separates sponsored links from search results, although links to disclosure statements are difficult to find.

The trustworthiness of Google is reflected in usage. With an audience of 53,058,000 searching an average of 26 minutes at a time, Google is not only the top search engine, but has 10 million more users than #2 MSN, and almost 12 million more users than #3 Yahoo!.

“Our previous studies have shown that 60 percent of consumers surveyed did not know that search engine results included paid advertisements along with non-paid results, and when they found out the truth, they were angry,” said Jørgen Wouters, study author and consultant to Consumer Reports WebWatch. “Search engines need to understand that these practices and omissions, when exposed, matter to consumers – their customers.”

About Consumer Reports WebWatch
Consumer Reports WebWatch is the leader in investigative reporting on trust and credibility in the online marketplace. WebWatch uses the proven methods of Consumer Reports to produce comprehensive research, breakthrough conferences and serves as a daily resource of unbiased and trustworthy information. Its research agenda includes entire online marketplaces, such as travel, search, health, financial services and more. WebWatch is a project of Consumers Union and is funded by The Pew Charitable Trusts, The John S. and James L. Knight Foundation, and the Open Society Institute. WebWatch's investigative reports, articles and news are available to the general public at http://www.consumerwebwatch.org/

About Consumers Union
Consumers Union, the nonprofit publisher of Consumer Reports, is an expert, independent nonprofit organization whose mission is to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves. To achieve this mission, we test, inform, and protect. To maintain our independence and impartiality, CU accepts no outside advertising, no free test samples, and has no agenda other than the interests of consumers. CU supports itself through the sale of its information products and services, individual contributions, and a few noncommercial grants. Consumer Reports content can be found online at ConsumerReports.org. Consumers Union's public policy work can be found online at ConsumersUnion.org.

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