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. —Online Activities & Pursuits (Pew Internet & American Life Project)

Interesting… the study also says “92% of those who use search engines say they are confident about their searching abilities, with over half of them, 52%, saying they are ?very confident.?”

Another good example of why it is dangerous to rely on user-reported opinions of their behavior. If you actually put people in front of a computer and gave them a searching task, measured how long it took them to find an answer and whether that answer was correct, you’d have a very different picture.

On average, people tend to overestimate their success at performing a task, so perhaps usability testing would show that people are even worse at differentiating between paid advertising and unpaid search results. But that depends on how the question was asked… since I have been tricked into clicking on a paid link, I can’t say that I am 100% able to differentiate between paid content and legitimate search results.

Link goes to a summary of the full PDF report.