Sponsored is the New Organic: Implications of Sponsored Results on Quality of Search Results in the Amazon Marketplace

TL;DR

This study investigates how sponsored results on Amazon's search pages influence search quality and market fairness, revealing that poorer quality and costlier sponsored items often appear prominently, impacting consumers and sellers.

Contribution

The paper provides empirical evidence from Amazon across four countries showing the prominence of low-quality sponsored results and their potential negative effects.

Findings

Poor organic ranks often appear as sponsored results.

Sponsored results tend to be more expensive and of lower quality.

Sponsored results frequently appear before top organic results.

Abstract

Interleaving sponsored results (advertisements) amongst organic results on search engine result pages (SERP) has become a common practice across multiple digital platforms. Advertisements have catered to consumer satisfaction and fostered competition in digital public spaces; making them an appealing gateway for businesses to reach their consumers. However, especially in the context of digital marketplaces, due to the competitive nature of the sponsored results with the organic ones, multiple unwanted repercussions have surfaced affecting different stakeholders. From the consumers' perspective the sponsored ads/results may cause degradation of search quality and nudge consumers to potentially irrelevant and costlier products. The sponsored ads may also affect the level playing field of the competition in the marketplaces among sellers. To understand and unravel these potential concerns, we analyse the Amazon digital marketplace in four different countries by simulating 4,800 search operations. Our analyses over SERPs consisting 2M organic and 638K sponsored results show items with poor organic ranks (beyond 100th position) appear as sponsored results even before the top organic results on the first page of Amazon SERP. Moreover, we also observe that in majority of the cases, these top sponsored results are costlier and are of poorer quality than the top organic results. We believe these observations can motivate researchers for further deliberation to bring in more transparency and guard rails in the advertising practices followed in digital marketplaces.