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

TL;DR

This paper investigates how interleaved sponsored results on Amazon SERPs influence search quality and marketplace competition across four countries. Using web crawlers, the authors collect data from 4,800 search operations, yielding over 2 million organic results and 638 thousand sponsored results, to analyze prevalence, relevance, and comparability of ads versus organic results. They find that sponsor results often appear before top organic results, are frequently less relevant (organic ranks often beyond 100), and tend to be more expensive while offering lower or comparable quality, potentially nudging consumers toward costlier options. The study discusses regulatory implications in the US, India, and the EU, and proposes policy and design guardrails—such as separating sponsored from organic results or downgrading ads—to protect consumer welfare and ensure fair competition in digital marketplaces.

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.

Figures (4)

• Figure 1: First two rows of the search engine result page (SERP) for query 'baby wipes' on Amazon.com. The first four results are sponsored results (i.e., ads) while the rest of the results shown are organic.
• Figure 2: Average number of sponsored results appearing before the top organic search result across the four marketplaces for all the queries in different settings. In general 2--3 sponsored results precede organic results; the number is slightly higher in default setting across the four marketplaces consistently.
• Figure 3: Mean (and standard deviation error bar) organic rank, as evaluated by Amazon's own search ranking algorithm, of top sponsored results appearing before the top organic results on Amazon SERPs for different queries (along X-axis) across the four marketplaces. For a large majority of cases the top sponsored results appear below organic rank 100 across the four marketplaces for different queries consistently.
• Figure 4: Mean (and standard deviation error bar) ratio of average price of top sponsored and organic results for different queries (along X-axis) on Amazon SERP. For a large majority of cases the top sponsored results are costlier than top organic results.