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The Law of Shitty Click-Throughs

Above is the first paid banner ad, which ran on Hotwired in 1994 and delivered a 78% click-through rate. That’s about 1000 times the average CTR on display banners in 2012, even though today’s ad units are bigger, better targeted and more animated. An illustration, apparently, of what Andrew Chen has dubbed the law of shitty clickthroughs. Put simply: “Over time, all marketing strategies result in shitty clickthrough rates.”

Without a doubt, one of the key drivers of engagement for marketing is that customers respond to novelty. When HotWired showed banner ads for the first time in history, people clicked just to check out the experience. Same for being the first web product to email people invites to a website — it works for a while, until your customers get used to the effect, and start ignoring it.

We’ve all seen the Jakob Nielsen eye-tracker studies where our eyes literally avoid looking at the banners, and this would seem to support Chen’s premise: Now that we know those boxes over there are ads and they’ve lost their novelty, we’ve learned to ignore them.

I think that’s a lazy interpretation of the data, though. The novelty of a 30-second commercial break on TV wore off before I was born, and while some of us are certainly skipping them some of the time, they continue to perform very well when people actually watch them. Novelty has nothing to do with it. When commercials deliver compelling content, we watch them, we talk about them at the water cooler, and then we got to YouTube to watch them again.

I’d argue that banner-ad viewership, engagement and click-through rates continue to fall not because there’s something fundamentally broken about a 300×250-pixel rectangle on a web page; consumers have stopped paying attention because we tend to fill up that rectangle with crap. When I see a commercial that I love and want to share with my friends, I’m not sharing an ad — I’m sharing content that a brand produced. Content that taught me something or made me laugh or plucked my heart strings. When brands start to do a better job at delivering content inside banners and Sponsored Stories and Promoted Tweets, consumers won’t care that they’re ads — they’ll look at them anyway.

(Thanks, Jenny, for introducing me to Andrew Chen’s blog.)