Study Reveals Search Engines Favour Big Brands

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A new report reveals web surfers struggle to differentiate between paid advertising and search engine listings, permitting big brands to dominate online shopping.

A report released by The Australia Institute revealed that 37% of internet users were unaware search engines displayed paid advertising, and that just two out of five people could differentiate the paid advertisements from unpaid engine generated listings.

The report What you don’t know can hurt you: How market concentration threatens internet diversity sampled more than a thousand Australians and revealed big brands dominate search engines thanks to paid advertising.

A paltry 15 per cent of shoppers who used Google, Yahoo and Bing search engines bothered to venture beyond the first page of results. Worse yet, the first result accounted for 72 per cent of user clicks, with second and third scoring 13% and 8% respectively.

Co-author Richard Denniss believed the report revealed how much influence search engines have over online consumers, believing search engines needed greater regulation and further transparency.

”I get the sense from the work I have done on this that in Australia we still seem to think of anything that happens on the internet as a bit of fun and we don’t take it seriously,” he said. ”I also fear that our regulators aren’t taking it seriously.”

Denniss recognised that the greatest drivers of online shopping were choice and price, but was concerned that big brands will dominate retail through paid advertising, listing them higher among search engine results.

”Unless regulators pay more attention to the need for online diversity, and there is greater understanding of how search engines function, online retail could come to resemble today’s shopping centres, in which the appearance of choice exists but actual choices are limited to a small number of players.”

According the SMH, online retail accounts for 6 percent of all retail sales, generating roughly $12.6 billion per year.

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