
The Law of Shitty Clickthroughs - kurtvarner
http://andrewchenblog.com/2012/04/05/the-law-of-shitty-clickthroughs
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vm
This is true of the entire practice of marketing & advertising. Every
"innovation" is just a new way to break through the noise to capture consumer
interest. (remember the first time you saw a URL on a truck? so cool! now even
my credit cards have URLs on the back and I don't give a shit)

There are two ways succeed: 1) create new forms of media (author talks about
this a little at the end) and 2) make better ads on existing media. Pretty
much every advertising company I know about tries #2. Improved targeting by
xyz fancy algorithm or better creative, which works until it succeeds too
much.

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Turing_Machine
"Customers respond to novelty, which inevitably fades"

An alternate wording might be "you can fool people into thinking an ad is
something else for a little while, but they soon wise up". Left unstated:
exactly why a potential customer who's been tricked into clicking on an ad is
going to be in the mood to buy anything from you or associate with you in any
way.

You could make an analogous observation about the "channel decay" for "email
opening rates".

If your marketing mechanisms prompt potential customers to actually INSTALL
SPECIAL SOFTWARE in order to avoid your message, you're probably doing
something wrong, yo.

~~~
dkarl
Correct. Advertisers should accept that their relationship to users is an
adversarial one. Users don't want advertisements, don't like them, and do
their best to avoid them.

~~~
mkr-hn
That seems defeatist. I've whitelisted plenty of sites because the owners are
selective in who they let run ads. Penny Arcade's creators posted a story
(which I can't find a link to) about how their business guy (Robert Khoo)
spent days working on an ad deal, then handed it over. They rejected it
because they couldn't endorse the game being advertised.

This is the kind of thing advertisers should be doing. Actually be involved in
the communities you're advertising to and you're going to know what they want
to buy. This is why ads on PA are non-intrusive (rarely more than one loop on
the animated ones), and are always relevant. There's quality control on both
ends of the deal.

Nothing can help someone advertising garbage. But that's a whole other
discussion.

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drostie
I would like to add that one of the points in the discussion was a simple
application of a much broader point. Chen says, "It's bad enough that your own
marketing efforts drive down channel performance, but usually once your
marketing efforts are working, your competitors quickly follow."

The broader point is to think about the world in terms of feedback loops --
what we might call _feedback theories_. Our modern understanding of nuclear
chain reactions works this way; once you get above a certain density, a
neutron will be likely enough to hit a fissionable isotope, that the average
number of neutrons produced per neutron is more than 1.0 -- then the neutron
makes itself more likely, the chain reaction grows exponentially with positive
feedback, and boom. Otherwise it will just peter out to 0 from negative
feedback. Evolution by natural selection is also a feedback theory, if you
focus on the genes themselves.

Coming back to the economic examples, it is now considered a relatively good
economic model to assume that the stock market already knows everything that
there is to potentially know about a company. If you just imagine that there
was some person who magically started moving money to the day's top
performers, you can reasonably envision that others might try to jump on this
magical predictor, then attempted to bail out just before they did -- but so
many would potentially sign up for this that it would damp that predictor's
own profits to have a massive sell-off just before they were supposed to sell
themselves, negative feedback. It's thought that on a smaller scale this would
tend to happen with insider knowledge. Or, for another econ 301 example, there
is a powerful argument that competitive markets are efficient, because they
must be among the least profitable markets around. Why must they be the least
profitable? Because if competing is easy, then anyone in a less profitable
market cuts their losses and jumps into the competitive market instead, which
concentrates profits in the market they're leaving and dilutes profits in the
market they're joining. And if there's no profit, there's no room for
inefficiency. (There's also a sort of odd pseudo-Marxist corollary: that
agents within a market always want the market to be less competitive, so that
their profits can be higher.)

Anyway, the law of shitty clickthroughs amounts, I think, to a particular
feedback theory of marketing. If you market well, that generates negative
feedback, both in the form of people following your example, and in the form
of people getting desensitized to your ads.

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keithpeter
"Similarly, this law provides a litmus test as to the difference between
advertising and information. When you are marketing with useful information,
then CTRs stay high. Advertising that’s just novelty and noise wrapped in a
new marketing channel has a limited shelf life."

I've just realised how true that is by making a brief inventory of my own
repeat purchases. I have rewarded sources that give information and support,
and ignored the spammy banners.

~~~
PaperclipTaken
I think this is an important point in analyzing advertising.

The core of advertising is generally not to match a user to a product that
fits them well and will be genuinely a good use of time/money. The end goal of
most advertisements is to sell a product, or to change the way you view a
company, regardless of how closely the company and the products matches your
needs and ideals.

Many of the most successful forms of advertising use a certain level of
behavior modification via methods like classical conditioning. Instead of
showing a fancy car, they show a fancy car and a very attractive woman, and
you are more likely to associate 'want' with the car as a result of the woman.
Food companies will often try to advertise to you at times and locations where
you are most likely to be hungry, so that when you are hungry again, you are
more likely to think about their food.

I would view many of these types of advertising as parasitic, because they
allow potentially inferior companies and products to out-compete potentially
superior companies and products.

I do not think that most people consider this consciously, but perhaps it
plays into their subconscious processing of advertisements. They click on a
cool looking advertisement, and find a less cool product (or maybe a product
that they recognize as overpriced), and then they associate that form of
advertising (banner, etc.) with a gimmick, and therefore are less likely to
follow through on that advertisement format in the future.

To summarize, I think that the 'shitty clickthrough rate' effect would be much
less significant if advertisements were less gimmicky and more authentic, and
geared towards matching the customer to the product that matches them, instead
of matching the product to a potential customer.

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RobertKohr
After a lot of experimenting on a wiki hosting service I run (editthis.info),
I found that putting ads way at the bottom of content, and just putting one ad
tended to work better than any other location. You have read all that you will
read, and you don't mind being distracted to go off and see what an ad will
lead you to (my guess).

~~~
dhimes
By "work better," do you mean "acquired clicks" or " acquired sales?"

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lukeholder
I dont think I have EVER clicked on a web ad.

Who clicks on them? I wonder how many are accidental.

~~~
dangrossman
If I'm looking to buy something and don't know where to buy it, the first
thing I do is a Google search followed by opening all the ads above and beside
the results in tabs.

I've also been captured by retargeting campaigns by web services. Quite a few
YC-funded companies run them. You only see their ads after you've been to
their site... but they follow you all around the web, everywhere
AdSense/DoubleClick reaches, which is 90% of all display advertising.

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taylorbuley
In economics this is called "diminishing marginal returns."

