‘Sponsored links’ versus ‘Paid Ads’

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It turns out it matters. Here is the abstract of a new paper by Ben Edelman and Duncan Gilchrist:

In an online experiment, we measure users’ interactions with search engines, both in standard configurations and in modified versions with improved labels identifying search engine advertisements. In particular, for a random subset of users, we change “sponsored link” labels to instead read “paid advertisement.” We find that users receiving the “paid advertisement” label click 25% to 33% fewer advertisements and correctly report that they click fewer advertisements, controlling for the number of advertisements they actually click. Results are most pronounced for commercial searches, and for users with low income, low education, and little online experience.

Take a look at Google today. They now have a little word ‘Ads’ where ‘Sponsored Links’ used to be. I guess they are not being evil by changing things that way. Don’t tell their shareholders though. A 25-33% decline might be a big worry.

2 Responses to "‘Sponsored links’ versus ‘Paid Ads’"
  1. Does this mean that experiments (and thus economists) are useless or that google’s executives are not that smart after all?!?
     

  2. I would bet my house that Google’s executives know exactly how much the change in wording is worth. From day one, Google has staged experiments to assss the effects of changes in their pages.   If the researchers’ findings are right, Google has committed a major act of not-being-evilness.

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