New and very interesting research out of Penn St. University says that consumers have a strong bias against paid listings.
“Consumers have a bias against the links that businesses pay search engines to provide,” said Jim Jansen, assistant professor in the Penn State School of Information Sciences and Technology (IST). “By themselves, sponsored links appear not to be a viable business model and should be only one part of an online advertising campaign…”Prior research had noted a bias against sponsored links, but the question remaining was whether sponsored links were as good as organic links,” Jansen said…The researchers found that on more than 80 percent of the searches, study participants went first to the results identified as “organic.” Sponsored links were viewed first for only six percent of the time.
“What our study shows is that even when the returned results are exactly the same, people still view what they thought of as the organic results as better. The quality of the sponsored links isn’t the issue; it’s the placement of the results, he added.
You can read more in this summary. The full text of the research is also available (PDF) here.