Most users seem to know that there’s a difference between the top results, bounded by a shaded box, and the results that appear below that. The visual boundary between the two sends a cue to the user that they should be considered separately. And although that user may not be familiar with the specifics of a search engine algorithm, let alone the intricacies of an advertising quality score, the majority still know that the top results are more commercial in nature and the lower results less so.
In the user’s mind, less commercial equals more trustworthy, so the top organic result becomes a sort of usefulness baseline. Users use it to compare other results against. And this is where we see why too many ads on top starts to erode user confidence.
If an engine puts 4 or more ads on top to be considered, they haven’t left an available memory slot for the baseline listing in the top organic spot. They’ve forced the user to either consider only ads or to break their natural scanning pattern and skip further down the page (which the brain hates to do). This will almost always generate more clicks in the sponsored ads (at least, it will generate more first clicks) but the engine will pay a price.
By not allowing the user to follow their natural inclination to compare the ads against the top organic listing, they start to erode user confidence, which will eventually erode market share. This is the lesson Ask, Yahoo and MSN all learned the hard way.