Advertising Disclosures: Measuring Labeling Alternatives in Internet Search Engines

Abstract:     
In an online experiment, we measure users’ interactions with search engines, both in standard configurations and in modified versions with clearer labels identifying search engine advertisements. In particular, for a random subset of users, we change “Sponsored links” or “Ads” labels to instead read “Paid Advertisements.” Relative to users receiving the “Sponsored link” or “Ad” labels, users receiving the “Paid Advertisement” label click 25% and 27% fewer advertisements, respectively. Users seeing “Paid Advertisement” labels also 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 vulnerable users with low education and little online experience.

Number of Pages in PDF File: 27

Keywords: Internet advertising, search engines, disclosure, regulation, consumer protection, survey methods

JEL Classification: L51, L86, M37, M38, C83

working papers series