Advertising Disclosures in Online Apartment Search

Advertising Disclosures in Online Apartment Search
Benjamin Edelman and Paul Kominers

We examine leading online apartment search services and evaluate the disclosures associated with their paid listings. We find paid placement and paid inclusion listings at each site, but disclosures range from limited to nonexistent. Where disclosures exist, they are largely hidden behind multiple intermediate pages, effectively invisible to most users. We propose specific ways these sites could improve their disclosures, and we flag their duties under existing law.

Related Research

The table below summarizes our observations and our concerns. Click a column heading to jump to detailed analysis of the specified site. We proceed by evaluating relevant law and regulation, then examining practices at Primedia Apartment / Rentals Network (apartmentguide.com and rentals.com) and the Apartments.com Network (apartments.com and homefinder.com). We conclude with recommendations for sites that offer apartment listings.

	Apartmentguide.com	Rentalhouses.com	Rentals.com	Apartments.com	Homefinder.com
Paid marketing services offered	Paid placement, paid inclusion	Paid placement, paid inclusion	Paid placement, paid inclusion	Paid placement, paid inclusion	Paid placement, paid inclusion
Labels on paid listings	Some listings are labeled “Spotlight Property” or “Featured Communities.” Many paid listings have neither of these labels.	No listings have distinctive labels.	Some are labeled “Spotlight,” but other paid listings lack this label.	Some listings are labeled “Best Match" or “Featured Listings.” Many paid listings have neither of these labels.	No listings have distinctive labels.
Default search result ordering	“Best match” search results appear to be organized by payment by listers.	“Best match” search results appear to be organized by payment by listers.	“Best match” search results appear to be organized by payment by listers.	“Best match” search results appear to be organized by payment by listers.	Results are broken into sets organized from high-low home price.
Paid placement and paid inclusion programs are disclosed in a FAQ or other material intended for consumers	no	no	no	no	no
Number of clicks required to browse from home page to information about paid placement and paid inclusion	2	2 to 4 plus registration as a lister (name, email, phone number, property address, etc.)	2 plus registration as a lister (name, email, phone number, property address, etc.)	1 to 2 for paid inclusion; 2 to 3 for paid placement.	1 for paid placement; 2 for paid inclusion.
Additional impediments to finding information about advertising practices		Requires representing an interest in listing a property and submitting a form with personal information.	Requires representing an interest in listing a property and submitting a form with personal information.		To our knowledge, a full explanation of paid placement is not available.
Discloses paid placement and paid inclusion somewhere on the same website	no	yes	yes	yes	yes

back to topThe Duty to Label Paid Advertisements

For more than two decades, the FTC has regulated advertisements that consumers might mistake for editorial or other non-advertising content. In literally dozens of cases, the FTC has pursued deceptive infomercials that purported to be independent programming rather than paid advertisements. The FTC has specifically enjoined any "advertisement that misrepresents, directly or by implication, that it is not a paid advertisement." (FTC v. Levey et al.)

The FTC's call for appropriately-labeled advertisements applies equally online. In July 2001, Commercial Alert sent a letter complaining about the lack of "clear and conspicuous disclosure that the advertisements are, in fact, advertisements." The FTC's June 2002 response noted that "many search engine companies do attempt some disclosure of paid placement" but concluded that "their current disclosures may not be sufficiently clear."

While the 2001 Commercial Alert complaint and 2002 FTC response focused on general-purpose search engines, the FTC's response also covers specialized search engines such as sites dedicated to searching apartment listings. For one, nothing in the FTC's response indicates that its concern is limited to general-purpose search services. And the concerns flagged in the FTC's response – that users may fail to recognize which results are advertisements, and may therefore have insufficient information to choose which search services to use or which links to click – apply equally to general-purpose and to specialized search services. Finally, in requiring advertisements to be labeled as such, the FTC's authority derives from 15 U.S.C. §45(a)(1).(1), prohibiting "unfair methods of competition" – an authority covering substantially all commerce, and certainly not limited to general-purpose search engines.

The FTC's 2002 letter established a classification of paid listings at search engines, defining the terms "paid placement" and "paid inclusion." The letter explained: "In conducting its review, the staff considered ‘paid placement' to be any program in which individual Web sites or URLs can pay for a higher ranking in a search results list, with the result that relevancy measures alone do not dictate their rank. The staff considered ‘paid inclusion' to be any program in which individual Web sites or URLs are included in a search engine's index … for display as search results, when that Web site or URL might not otherwise have been included, or might not have been included at a particular point in time, but for participation in the paid program."

The FTC's 2002 letter specifically flagged the deficiencies of euphemisms sometimes used to label advertisements. The FTC instructed that advertisement labels must be "clear and conspicuous" using "terms and a format that are easy for consumers to understand." Commercial Alert had noted the problem of vague labels like "Featured Listings" and "Partner Search Results" – labels insufficient to alert consumers that a given listing is in fact an advertisement. The FTC's response confirms that euphemistic labels are insufficient.

As we show in subsequent sections, these principles apply in the context of online apartment search sites. For example, online apartment search sites offer both paid placement and paid inclusion. Indeed, many online apartment listing sites show only those listings they are paid to show; they do not include any unpaid listings. Furthermore, many apartment listing sites offer payment plans where listers can pay to receive preferential treatment, often including placement above non-premium sites. However, as subsequent sections note, these practices and preferential treatments are often disclosed poorly if at all.

back to topPractices at Primedia

By traffic volume, Primedia Apartments/Rentals Network is narrowly the largest online apartment search service. According to comScore, sites owned by Primedia had more than six million visitors in June 2011. Within the online apartment search space, Primedia operates apartmentguide.com as well as the rentals.com network of sites, each of which enjoys over one million unique visitors per month. (1, 2) We now turn to practices of these sites.

back to topApartmentguide.com

Apartmentguide repeatedly describes itself as a "Search" site (green highlighting).

Apartmentguide search results.

Apartmentguide.com plainly bills itself as a search service for rental apartments: for example, the first word on the body of the site's home page is "Search" ("Search thousands of apartments…"), and the action button for the top-of-page text box is "Search." See green boxes at right. Furthermore, Apartmentguide search results follow a format familiar from general-purpose search engines: sequential listings appear in a list, and links let a user advance pages or adjust ordering.

Search results at Apartmentguide.com include no statement that advertisers pay to put their listings in prominent positions. Far from disclosing to consumers that its results are determined by paid placement, Apartmentguide's statements falsely imply that Apartmentguide results reflect a genuine best effort to satisfy a user's request. For example, Apartmentguide calls its default sort algorithm "Best Match" which purports to offer a good-faith effort to satisfy a user's request. Apartmentguide's other sort options all concern features of the apartment (price, suitability for seniors, etc.), which implies (falsely) that "Best Match" is some combination of those features or otherwise grounded in apartments' characteristics rather than payment of a fee. See the blue boxes at right.

Apartmentguide's search results also include "Spotlight Property" and "Featured Community" listings that enjoy a distinctive color scheme and placement. See the yellow box at right. (Spotlight Properties feature a crimson background, gold type, a black heading, and top-of-the-page-placement, while Featured Communities receive a white background, gray header, and changing display on a prominent sidebar.) These Spotlight Property and Featured Community results appear without any disclosure or statement of why certain properties receive such favored treatment. Their distinctive color and placement may correctly suggest to customers that they are paid advertisements, but Apartmentguide says nothing to confirm that suspicion. Further, a consumer who deduces that Spotlight and Featured properties are paid listings is likely to conclude, incorrectly, that the other listings are not paid listings.

Apartmentguide.com explains its paid placement programs to prospective advertisers in great detail. It offers four tiers of listings, from silver through diamond, promising increasingly favorable placement: silver for "value option" with lowest placement; gold for "middle placement above silver listings"; platinum for "top placement above gold and silver" and diamond to "dominate a metro area" with "presence on first page of search results." In light of these statements, we believe that "Best Matches" are actually sorted according to advertiser payment.

As best we can determine, the Apartmentguide site presents only those listings that have paid to be included. For example, when Apartmentguide compares its various paid placement tiers, it compares them only to each other; at no point are they compared to any non-paid listings, nor is there ever any suggestion of free listings. We believe these practices meet the FTC's definitions of "paid inclusion" and "paid placement" and thus must be disclosed to consumers pursuant to the FTC's instructions.

To the extent that Apartmentguide discusses its paid placement and paid inclusion programs, this discussion is positioned in a place where few consumers will discover it. From the front page of Apartmentguide.com, a consumer must follow a link titled "List with Us" to the site Listonapartmentguide.com. (Note the separate domain name.) The user must then click "Products" to reach a marketing page containing a brief description of each product tier as well as videos with more detailed explanations, or click a further link for a guide of product packages. This process, requiring at least three clicks as well as accessing a separate web site at a separate domain name, is likely to stymie most users; these are not the "clear and conspicuous" disclosures required by the FTC, nor are these disclosures in a place that "consumers [can] easily locate." Quite the contrary, the only consumers who find this information are those who suspect that it exists, who specifically seek it out, and who brave a convoluted path to find it. Ordinary users seeking to rent an apartment, rather than list one, have no reason to enter this area of the site.

Discussion of the Spotlight and Featured Communities is even harder to find. In our investigations, we were only able to find discussion of Spotlight Property listings in the May and September 2011 product guides, which were not linked from Apartmentguide's website. (To find these files, we had to run searches using an outside search engine.) Featured Communities were discussed only in the May product guide and are not mentioned in the current product guide.

back to topRentals Network

Apartmentguide repeatedly describes itself as a "Search" site (green highlighting).

Primedia's "Rentals" properties include Rentals.com and Rentalhouses.com. Because practices are nearly identical on these sites, we first examine Rentalhouses.com and then discuss the differences that apply to Rentals.com.

Much like Apartmentguide.com, Rentalhouses.com specifically presents itself as a "search" service. The home page prominently invites users to "Search for Rental Houses," a process users begin by typing a location and pressing an oversized colored button labeled "Search." Alternatively, users can choose to run an "Advanced Search." The search results offer opportunities to save or refine a search, or construct a different search – features in each instance described using the word "search." (See the green boxes at right.) Finally, in a format familiar from general-purpose search engines, the search results page presents sequential listings with links to advance pages or adjust ordering. However, search results at Rentalhouses.com include no statement that advertisers pay to put their listings in prominent positions.

Rentalhouses.com includes only paid listings, and sorts them by advertiser payment. Those who list properties can choose the "Silver" level for $25 per month or at the "Gold" level for $45 per month. The "Gold" program is described as offering "Top Placement," while "Silver" listings are placed "Below Gold." Rentalhouses nowhere specifies the default sort order for its search results, suggesting that the advertising package chosen by the lister determines the prominence given to the corresponding listings.

The Rentalhouses search results page includes an option to change sort order to sort by price or to favor newest listing. (See the blue box above.) But the default sort option at Rentalhouses is neither of these; we gather Rentalhouses instead sorts by default by advertiser payment. (Among other evidence: that's what Rentalhouses promises to advertisers, as detailed in the preceding paragraph.) With the drop-down sort box listing two other options but saying nothing about advertiser payment, users are particularly unlikely to suspect that results are ordinarily sorted by advertiser payment.

Meanwhile, prominent "Ads by Google" appear above search results. See yellow box above. A consumer who notices this "ads" label is likely to conclude, incorrectly, that the other listings on the page are not advertisements.

To the extent that Rentalhouses discusses its paid placement and paid inclusion programs, this disclosure appears in a place where few consumers will discover it. Finding this information requires following one of two routes, both of which require registration. First, in the Rentalhouses.com FAQ, a user may notice the question "What advertising plans do you offer?" The answer is a single sentence without any information about the plans, save for a link to a registration page. If a user completes the registration form (including representing an interest in listing a property and providing an name, email, phone number, and property address), the user is taken to an account management page which includes a link labeled "Create Listing." The link leads the user to a second registration page where the user must provide further information about desired listings, ultimately yielding two different plans (the "Gold" and "Silver" plans discussed above). This registration page can also be reached by following a link titled "Property Manager Login" from the homepage.

Alternatively, users can follow a link entitled "Get Started" in a section called "List Your Rental House" at the top of the Rentalhouses.com home page, or a small link "Advertise with Us" at the bottom of the same page. These links both take a user to the second registration page described in the preceding paragraph, bypassing the first. This saves users one registration, but also deprives the users of even the limited information available in the FAQ.

This process – requiring at least two clicks as well as registration with name, email address, and stated intent to list a property – is likely to stymie most users. These are not the "clear and conspicuous" disclosures required by the FTC, nor are these disclosures in a place that "consumers [can] easily locate." Quite the contrary, the only consumers who find this information are those who suspect that it exists, who specifically seek it out, and are willing to provide personal information in an (uncertain) effort to find it. Ordinary users seeking to rent an apartment, rather than list one, have no reason to enter this area of the site.

back to topDifferences at Rentals.com

In most relevant respects, Rentalhouses.com and Rentals.com are identical. We identified three noteworthy differences:

Unlike Rentalhouses.com, Rentals.com does not have an FAQ.A user at Rentals.com therefore cannot reach the page about advertising offers by browsing through a FAQ and following the link and registration form as detailed above. Instead, the home page includes links labeled "List Your Property" and "Manage My Ads" bringing users to a registration page similar to the second registration page on Rentalhouses.com.
Rentals.com offers three tiers of placement: "Premier," "Featured," and "Standard," which are ranked in that order, compared to two tiers at Rentalhouses.com.
Rentals.com includes "Spotlight" entries at the top of its search results page, distinguished by a deep blue background and yellow-and-white text. However, no text or disclosure explains how "Spotlight" entries are selected.
The links that bring a user to the registration page are more prominent on the Rentals.com front page: there are two large, colorful links labeled "List Your Property" on the home page for Rentals.com, as well as one labeled "Manage My Ads," as opposed to the one small link labeled "Property Manager Login" on the home page for Rentalhouses.com.

back to topThe Apartments.com Network

comScore reports the Apartments.com Network as the second most popular network of apartment search sites. Two of the major Apartments.com Network sites are Apartments.com and Homefinder.com. Both these sites have faults similar to the problems found in Primedia's websites.

back to topApartments.com

Apartments.com presents itself as a search service for rental apartments. On its home page, Apartments.com offers users the opportunity to "Search," "Search for Rentals," or "Search by State," and Apartments.com calls its service a "FREE Apartment Search" and "The Complete Property Rental Search." The main "Search" button features large type and a bright orange color that stands out from the green tones prevalent on the rest of the site. Much of the "search" language is repeated on the search results page. In a format familiar from general-purpose search engines, the search results page presents sequential listings with links to advance pages or adjust ordering.

Apartments.com grants preferred placement to "Featured Listings" and "Best Match" listings which are actually those advertisers who pay the highest prices.

Search results at Apartments.com include no statement that advertisers pay to put their listings in prominent positions. Far from disclosing to consumers that results are shaped by paid placement, Apartments.com falsely implies that results reflect a genuine best effort to satisfy a user's request. For example, Apartments.com labels search results with tags that declare them either "Best Match" or "Close Match," which affirmatively claims to be a good-faith attempt to satisfy a user's request. (See blue box at right.) Remarkably, alternative sort orders preserve the "Best Match" and "Close Match" labels no matter the user's requested sort order and no matter the actual ordering of results. For example, suppose a normal search labels 1 Broadway a Best Match at $2500, and labels 1 Main Street a Close Match at $2200.If the user then requests a reordering from low to high price, the user will see 1 Main Street ranked above 1 Broadway, but 1 Main Street will still be labeled as a Close Match and 1 Broadway still a Best Match. See an example search in default ordering and in low-to-high reordering, the latter preserving Best Match labels from the former despite the user's specific request.

Apartments.com's search results also include "Featured Listings" that are formatted much like the main listings, but placed above them. See yellow box above. Feature Listings also enjoy bright orange markers in property maps, while Best Matches get bright green markers and Close Matches only dull gray markers. Notably, Featured Listing results appear without any disclosure or statement of why certain properties receive such favored treatment. The distinctive color scheme and prominent placement of Featured Listings may suggest to customers (correctly) that they are paid advertisements, but the search results page gives no affirmative statement to that effect. Further, a consumer who deduces that Featured Listings are paid listings is likely to conclude, incorrectly, that the other listings are not paid listings.

Apartments.com engages in both paid inclusion and paid placement. Those listing individual apartments can purchase "For Rent by Owner" packages. Those with more properties can purchase "Platinum," "Gold," "Silver," or "Silver Basic" ad packages, and Apartments.com promises top search billing to "Platinum" listings, second to "Gold," third to "Silver" and "Silver Basic," and bottom billing to "For Rent by Owner" listings. We could not identify an explanation for why certain results are invariably chosen as "Best Match" results, but based on the site's paid placement program and the invariability of the results, we suspect that "Best Match" results are those associated with more expensive advertising packages.

Though Apartments.com search results never mention that listings are advertisements, the site's home page links to an explanation of the paid inclusion program. However, finding an explanation of the paid placement program is more difficult. To find the explanation, a user must follow a link labeled "Manager Center," and then follow one of three separate links labeled "More Info" under headings for tools labeled "Property Updater," "MyMedia," or "Online Reporting." These "More Info" links lead to information about various Apartments.com ad products including "Platinum," "Gold," "Silver," and "Silver Basic" advertising packages as well as "Featured Community Listings." Alternatively, a user can browse the Apartments.com site map to find the "Advertise With Us" section and associated links.

We believe consumers are unlikely to find these explanations. The explanations appear in a section of Apartments.com directed to property owners: "Manager Center" and "Place an Ad." Site design, color scheme, and page layout all discourage consumers from finding this material. Ordinary users seeking to rent an apartment, rather than list one, have no reason to enter this area of the site.

back to topHomefinder.com

Homefinder.com presents itself as a search service for homes for sale. The top of its home page invites users to "Search Homes For Sale," with large orange type emphasizing the importance of this function. The site also offers an "Advanced Search" option along with additional functionality letting users "Search Foreclosures," "Find Mortgage Lenders," and "Find Open Houses" (although we focus on home search results). In its public statements, Homefinder.com also says it provides "search" services; in a recent press release, Homefinder describes itself as "one of the most trusted Web sites for consumers to search for a home." Finally, in a format familiar from general-purpose search engines, the search results page at Homefinder.com presents sequential listings with links to advance pages and adjust ordering.

Search listings at Homefinder.com include no statement that advertisers pay to put their listings in prominent positions.

We were able to determine that Homefinder.com offers paid placement and paid inclusion programs, although we were not able to affirmatively determine details of either program. Each of Homefinder.com's advertising packages indicates that "All Packages Include… Priority placement to stand out in search results." Because every package includes priority placement, we could not immediately determine what ordering applies among paid results. We also cannot rule out the possibility that some listings on Homefinder.com are unpaid, although if this is the case, we found no suggestion of how unpaid listings are selected or sorted.

To the extent that Homefinder discusses its paid placement and paid inclusion programs, this discussion is positioned in a place where few consumers will discover it. From the home page, a user must click "Home Selling" to reach a marketing page promising "Priority Sorting: Get more exposure for your property by ensuring it appears ahead of basic properties on HomeFinder.com." Learning about the pricing plans for inclusion requires following a further link labeled "Sell Your Home." This link is attached to a textbox which requires the user to provide a rough geographic location for the home, and which takes the user to another marketing page which details the prices to list an ad for varying time periods. Even if a user reaches this page, the site offers no clear explanation of the costs of priority plans, nor how listing order varies under different plans. Furthermore, ordinary users seeking to buy a home, rather than sell one, have no reason to enter this area of the site.

back to topRecommendations

We are struck to see so many popular apartment and house search sites offering "search" services but making no disclosure that most or all listings appear only because listers pay for placement. We believe this practice is likely to deceive consumers – leading consumers to believe they are seeing a comprehensive listing of all available apartments, when in fact they are only seeing those properties that choose to pay, and even those often only in order of payment amount.

Consumers are all the more likely to be deceived when some listings are labeled "featured" or "spotlight," or similar. These labels admittedly suggest that a portion of listings may be advertisements, but by negative implication these labels also suggest (falsely) that the other listings are not advertisements. A similar problem arises when a portion of the search results page is labeled "Ads by Google": Since those links are labeled as "Ads," users are likely to conclude (mistakenly) that the other listings are not advertisements. This problem is particularly widespread: We found Google AdSense ads on all five of the sites we examined (1, 2, 3, 4, 5).

We believe existing FTC policy disallows these practices. While the FTC sent its 2002 letter only to general-purpose search engines, the plain language of the letter, its rationale, and its statutory basis all apply equally to specialized search services such as apartment and home search. We have contacted apartment search services to alert them to this question, and we hope they will take appropriate action to improve their disclosures and/or change their practices. Otherwise, FTC or state attorney general action may be required.

Last Updated: January 25, 2012 - Sign up for notification of major updates and related work.