Analyzing Advertising Labels: Testing Consumers' Recognition of Paid Content Online

In 2014-2015, the U.S. Federal Trade Commission (FTC) commissioned a study to assess consumers' ability to recognize ads and other paid content in online search results and news/article feeds. The co-authors designed the study, oversaw its execution, and analyzed the results, with support from FTC staff. The goals of the research were to assess the effectiveness of methods that online services use to label ads, and to see if alternative methods of labeling ads could improve consumers' ability to recognize them. In a controlled experiment, 48 consumers interacted with both desktop and mobile Web pages that were captured from search and online magazine websites. In half of the conditions, the Web pages were modified based on established Web design guidelines to improve the clarity of ad labeling. The participants' behavior, comments, and eye movements were recorded. Initial findings of this experiment are: (a) consumers cannot always distinguish ads, paid content, and paid search results from unpaid content, and (b) improving the salience and placement of labels based on established UI design guidelines can improve consumers' ability to recognize ads, paid content, and paid search results. We conclude with implications of the results and areas for future research.