The Law of Shitty Clickthroughs: Why Advertising Decay is Inevitable

This article delves into the inevitable decline of advertising effectiveness, known as the "Law of Shitty Clickthroughs." It explores the reasons behind this phenomenon and offers strategies to combat it.

A Historical Perspective on Advertising Effectiveness

The article begins by showcasing a stark contrast in clickthrough rates (CTR) for banner ads in the early days of the internet (1994) compared to later years (2011). The CTR for the first banner ad on HotWired was a remarkable 78%, while Facebook ads in 2011 achieved a mere 0.05%. This drastic difference highlights the decline in advertising effectiveness over time.

• HotWired CTR (1994): 78%
• Facebook CTR (2011): 0.05%

Key Drivers of the Law of Shitty Clickthroughs

The article identifies several factors that contribute to the Law of Shitty Clickthroughs, including:

• Novelty: Customers initially respond to new advertising formats and experiences, but this novelty wears off over time, leading to decreased engagement. For instance, early adopters of email marketing were captivated by the newness of receiving messages directly in their inbox, but this novelty faded, resulting in lower open rates.
• First-to-Market Effect: Companies that pioneer new advertising channels initially enjoy high performance. However, competitors quickly follow suit, leading to increased competition and a decline in effectiveness. The article uses the example of Airbnb, whose early success in search engine marketing was quickly matched by competitors, lowering the overall effectiveness of the channel.
• Scale and Qualified Customers: As a company grows, its customer base expands to include less qualified leads who are less responsive to advertising efforts. Early adopters are often more engaged and receptive to marketing messages compared to later adopters who might require more convincing.

Combating Advertising Decay

The article acknowledges that the Law of Shitty Clickthroughs is a powerful force that cannot be entirely avoided. However, it suggests several strategies to mitigate its effects:

• Nomad Strategy: Continuously develop new creative, experiment with different publishers, and adapt to evolving trends. This approach helps maintain a baseline level of advertising performance. For example, regularly updating banner ads with fresh designs and messages can prevent users from becoming accustomed to them.
• Focus on Useful Information: Advertising that provides valuable information or solves a problem for customers tends to maintain higher CTRs. This suggests that advertising should be more than just noise; it should offer genuine value.
• Identify New Untapped Channels: The most effective way to combat the Law of Shitty Clickthroughs is to find and exploit new, uncontested advertising channels. The article highlights the potential of Open Graph and mobile notifications as emerging channels with the potential to deliver high performance.

The Importance of Experimentation and Innovation

The author emphasizes the importance of continuous experimentation and exploration of new advertising channels. This approach can help companies stay ahead of the curve and maintain high advertising effectiveness. The article encourages companies to embrace the unknown and be willing to try new approaches, even if there's no guarantee of success.

• Open Graph: A social networking framework that allows developers to create rich, interactive experiences within Facebook. This platform offers opportunities for targeted advertising and engagement.
• Mobile Notifications: These direct messages sent to users' mobile devices can be effective in reaching users with timely and personalized content. However, it's important to use these notifications strategically to avoid overwhelming or annoying users.

Conclusion

The Law of Shitty Clickthroughs is a reality that all advertisers face. Understanding the drivers behind this phenomenon and implementing proactive strategies can help companies maintain a competitive edge in a constantly evolving digital landscape.