Sponsored search is a multi-billion dollar market, despite the low click-through rates

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Surfers shun search engine sponsored links

But paid-for entries still worth billions to Google and co

Robert Jaques, vnunet.com 23 Aug 2007

Consumers are distrustful of search engine sponsored listings and click on such links fewer than twice in every 10 searches, new research has revealed.

However, these low click through rates should not be seen as bad news for Google et al, according to the Penn State University analysis of sponsored-link click throughs using actual search engine data.

"While the click through was only about 16 per cent, this a real boon for search engines," said Jim Jansen, an assistant professor in the College of Information Sciences and Technology at Penn State and lead author of the report.

"Even at 16 per cent, sponsored search is already a multi-billion dollar market, and this study shows that there is plenty of upside growth potential."

The study is described in an article entitled Sponsored Search: Is Money a Motivator for Providing Relevant Results? published in the August issue of IEEE Computer.

Sponsored links are search engines' primary revenue makers, and Google and Yahoo both report billions in annual earnings.

But search engines, not surprisingly, reveal less about consumers' overall click-through rates. Popular press reports of those rates range from 15 per cent to 35 per cent, according to the report.

Previous research by Jansen involving a page of results from a fictitious search engine suggested that consumers are suspicious of sponsored links placed in highlighted columns on the right or at the top of the results page.

In that study, participants clicked on the results identified as 'organic' on more than 80 per cent of their searches rather than sponsored links even though many of the organic results were actually rewritten sponsored links.

In the current study Jansen speculated that, given consumers' bias against sponsored links, search engines' separation of sponsored and non-sponsored links might be doing a disservice to searchers and to the businesses which invest in sponsored links.

So his goal was to determine whether integrating sponsored links into organic results would increase the click-through rate, but this did not happen

"Web consumers are savvier than a lot of professionals give them credit for. With sponsored search at such an early growth stage, there appears to be plenty of room to innovate the business model," he said.

The data for the study was provided by Dogpile, a metasearch engine which combines both types of links into a single listing, although sponsored links are clearly labelled as such.

The sponsored links come from Google and Yahoo through a contractual agreement with Dogpile. More than 4.2 million page views along with 1.8 million queries from about 666,600 users were analysed.

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