The Pew Internet & Americna Life Project has released a provocative report suggesting that the majority of U.S. Internet users cannot tell the different between paid and unpaid search results.
From the abstract:
Only 38% of users are aware of the distinction between paid or sponsored results and unpaid results. And only one in six say they can always tell which results are paid or sponsored and which are not. This finding is ironic, since nearly half of all users say they would stop using search engines if they thought engines were not being clear about how they presented paid results.
An important cavaet is that this appears to be a ‘self-reporting’ telephone survey. Full Pew Report here.
Consumer Reports WebWatch report on best-practices for disclosure from November 2004 (and finding that search engines have much to improve on in this area), here.
Search Engine Watch coverage of the Pew Report here.
Geico v. Google discussion of how to conduct a survey to test likelihood of confusion in keyword ads here.