Ethics of the Search Engine Advertising
Have your tried to search “Internet carrier” or “air cleaner” at Google to find some information about what to buy? By searching some terms, most search engine will display some sponsored links on the side of the window. However, there are ethics issues involving the advertising. For example, fraud links could happen to show on the advertising board. Imagine that when you were searching “online study guide” and a sponsored link were exceptionally attracting to you, and after you clicked in and paid, you realize the website were completely a fraud. It might not be a good experience since you are decided by a search engine that you trusts.
The following analysis will draw comparison between Google and Baidu, the biggest local Chinese search engine, about their advertising method and approach. The PCWorld article Baidu Criticized for Fraudulent Keyword Advertising points out that Baidu lacks of proper regulation about its advertising platform so that frauds and low quality advertisements prevail.
We should first analyze two advertising platforms to find out the difference. Both platforms are based on “Paying per click” model. Advertisers bid price for certain search keywords, and the highest bid get the highest advertising rank. In essence, two search engine company use the same way to make profits, but how come one is widely criticized by fraud advertising?
The difference reveals when Baidu displays the advertisement. Both companies have a separate area on the left to display advertisement. However. unlike Google did, which separates the organic search results, results pages that appear because of their relevance to the search terms, from the payed advertisement, Baidu mixes some high bids advertisement into the organic search results with a little “sponsored” mark on the right corner. In this case, it is hard for users to distinguish an advertisement and an regular search result because the only difference is the “sponsored” label.
Research from New York University Stern Business School claims that “most of the keyword-level characteristics have a stronger impact on the performance of natural search than paid search.” We all have the experience that when an advertisement pops out, the first response is to close it. The same analogy works here since people generally will purposely overlook the advertisement and focus on the “real” results in stead. Baidu utilizes such common response for advertisement and “cleverly” mixes the result for more advertising profits. However, in the long run, the company loses all reputation.
Why Baidu is willing to make such dangerous move? It is clear that eventually users will find out the trick. Without careful monitoring devices and quality evaluation mechanisms, users will not use it anymore and find the next alternative. As a matter of fact, Baidu is virtually monopolizing the search engine market in China with over three quarters of the market shares, followed by Google, with about fifteen percent of the market shares. Monopoly without effective regulation is dangerous because the company can do everything to maximum profits.
Nowadays, Baidu is facing more and more competition with Google and other local search companies. Besides, the advertising fraud also causes some litigation against Baidu. The state-run television (CCTV) criticizes Baidu for its lacks of regulation on advertising. The TV program showed an undercover journalist applying for and succeeding to advertise two fake companies on Baidu’s search results. The search engine giant in China finally makes changes. The new advertising platform, coded Phoenix Nest, provides a similar implementation to Google’s AdWorld platform. It does not mix the result anymore, and it can provide more accurate advertising based on a mix evaluation of keyword, price bid, location, and other user informations. It also implements the quality guideline as AdWorld did.
It is clear that Baidu is taking steps on its advertising platform. However, it still has a long way to go. For example, when you search “game laptop” at Google, the advertisements on top of the organic search results are AlienWare and Sagar gaming laptop. As a matter of fact, the two are the most reputable gaming laptop producer. Such advertisement is not based on the price but on the quality of the entity. Also, on the side advertisement, Google can get more accurate results such as Asus Gaming Laptop, Dell, and Lenovo. In the contrary, Baidu returns one Toshiba Laptop, and all the rest are game entries.
Clearer market competition facilitates companies making constant progress. If the company fails to do so, it will eventually lose all its market shares. Ethics also plays an important role in the competition. In the long run, company with bad ethics will lose its market because users are smart enough to eventually identify the trick. Google knows that its “Don’t be evil” motto not only is its philosophy, but also a golden law of market.
Related Articles
Baidu Criticized for Fraudulent Keyword Advertising
http://www.pcworld.com/businesscenter/article/238299/baidu_criticized_for_fraudulent_keyword_advertising.html
ChinaByte To Sue Baidu For False Search Result
http://pacificepoch.com/china-investment-research/articles/chinabyte-to-sue-baidu-for-false-search-result/
Comparing Performance Metrics in Organic Search with Sponsored Search Advertising
http://pages.stern.nyu.edu/~aghose/organic_sponsored.pdf
AdWorld: Landing page and site quality guidelines
http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=46675