The Law of Shitty Clickthroughs: Why Every Channel Decays

The Law of Shitty Clickthroughs, coined by Andrew Chen, states that every marketing channel degrades over time. As a tactic scales, as competitors copy it, and as audiences grow familiar with it, performance drops. What worked brilliantly at first becomes background noise.

This is not a pessimistic observation. It is a structural truth about how markets work, and every serious growth strategist needs to build it into their planning from day one.

What Is the Law of Shitty Clickthroughs?

Andrew Chen, a general partner at Andreessen Horowitz and a former growth leader at Uber, wrote about this phenomenon in a blog post that has become one of the most referenced pieces of writing in growth marketing. His core argument was simple: the first banner ad ever served had a clickthrough rate of around 44%. Today, the industry average is a fraction of a percent. The channel did not change. The audience did.

Chen identified three forces that drive this decay. First, users habituate. They learn to ignore formats they have seen before. Second, marketers flood successful channels. When something works, everyone piles in, and the signal-to-noise ratio collapses. Third, the best opportunities within any channel get picked off first. Early adopters of Google Ads bought cheap, high-intent keywords before the auction got competitive. What is left for latecomers is more expensive and less effective.

This is not a fringe idea. It is a description of how markets clear. And yet most marketing plans I have seen treat channel performance as a stable input rather than a depreciating one.

Why This Matters More Than Most Marketers Admit

Earlier in my career, I overvalued lower-funnel performance. When the numbers looked good, I took them at face value. It took a few years of running agencies and managing real P&Ls to understand that a lot of what performance marketing gets credit for was going to happen anyway. Someone who has already decided to buy your product will click your retargeting ad. That does not mean the ad caused the purchase.

The Law of Shitty Clickthroughs makes this problem worse. As channels decay, the pool of genuinely attributable conversions shrinks. But the reporting often does not reflect that, because the last-click model or the blended ROAS figure keeps looking acceptable until it does not. By the time the decay is visible in the data, you have often lost six to twelve months of ground you could have been using to build something more durable.

This connects to a broader point about growth strategy. If you are interested in how channel selection, demand creation, and go-to-market thinking fit together, the Go-To-Market and Growth Strategy hub covers these themes in depth.

The Three Stages of Channel Decay

Not all channels decay at the same rate, and not all decay is irreversible. Understanding the stages helps you make better decisions about where to invest and when to pull back.

Stage One: The Pioneer Window

When a channel or format is new, early movers enjoy outsized returns. Audiences are curious. Competition is thin. The creative bar is low because there is no established norm to compare against. This is when banner ads had 44% clickthrough rates, when Facebook ads were cheap and organic reach was real, when email open rates were in the 40s and 50s.

The problem is that most brands do not enter new channels during this window. They wait for proof of concept, which means they arrive just as the window is closing.

Stage Two: The Competitive Flood

Once a channel proves itself, the market floods in. CPMs rise. Auction prices climb. The creative that was novel becomes familiar. Publishers and platforms respond by increasing ad load, which accelerates audience fatigue. This is where most brands are operating most of the time, competing for diminishing returns in channels that were better three years ago.

I have managed hundreds of millions in ad spend across thirty industries. The pattern is consistent. By the time a channel becomes the consensus best practice, the best days are already behind it. That is not cynicism. It is just how markets work.

Stage Three: The Floor

Channels rarely die entirely. Email is not dead. Display is not dead. But they reach a floor where they function more as hygiene than as growth drivers. You maintain them because abandoning them would cost you something, but you do not expect them to carry the business forward. Recognising when a channel has hit its floor is important, because continuing to invest heavily in it at this stage is expensive and demoralising for teams.

Performance Marketing Is Especially Vulnerable

There is a particular irony in the Law of Shitty Clickthroughs for performance-first brands. The channels most susceptible to decay, paid search, paid social, retargeting, affiliate, are also the channels most associated with measurable, attributable returns. So brands double down on them because the measurement feels reassuring, even as the underlying performance is eroding.

Think of it this way. A clothes shop does not grow by getting better at selling to people who are already in the fitting room. Someone who tries something on is already close to buying. The real growth comes from getting people into the shop who had no intention of coming in. That requires different thinking, different channels, and a willingness to invest in outcomes you cannot measure on a thirty-day attribution window.

Performance marketing captures existing demand more than it creates new demand. When the captured pool shrinks, because the channel has decayed or the audience has been exhausted, there is nothing underneath it. Brands that have neglected demand creation at the top of the funnel find themselves in trouble at exactly the moment when their performance metrics start to slide.

This is a pattern worth understanding if you are thinking about growth hacking and sustainable growth tactics more broadly. The tactics that look like shortcuts often create structural vulnerabilities.

What Brands Get Wrong About Channel Strategy

The most common mistake is treating channel selection as a one-time decision. You pick your channels, you optimise them, and you report on them. The Law of Shitty Clickthroughs says that approach has a built-in expiry date.

A more useful mental model is to think of your channel mix as a portfolio at different stages of maturity. You need some channels in the pioneer window, where you are experimenting and accepting higher uncertainty. You need some in the competitive flood stage, where you are optimising and defending position. And you need some at the floor stage, where you are maintaining efficiently and not over-investing.

The proportion matters. Brands that put 90% of their budget into mature channels and 10% into early-stage exploration are not building resilience. They are concentrating risk in the most decay-prone part of their portfolio.

I have seen this play out repeatedly when turning around loss-making agencies. The businesses that were in trouble had usually optimised themselves into a corner. They were very good at one or two things that were no longer working as well as they once had, and they had no pipeline of new capabilities to replace them. Fixing that takes longer than most clients expect, because you cannot shortcut the experimentation phase.

BCG has written about how go-to-market strategy requires alignment across multiple functions, not just the performance marketing team. Channel decay is partly a marketing problem and partly an organisational one, because the structures that reward short-term performance metrics create incentives to stay in decaying channels longer than you should.

The Role of Creative in Slowing Decay

Creative quality can slow channel decay, but it cannot stop it. A genuinely surprising piece of creative in a mature channel will outperform the average, but it is fighting against structural forces. Audiences habituate to formats, not just to individual ads. Even brilliant creative eventually gets categorised by the brain as “another one of those.”

This is why creative strategy and channel strategy need to work together. If you are in a decaying channel, investing heavily in creative production to recover performance is often the wrong call. You are spending money to slow a decline rather than investing in something that compounds.

I judged the Effie Awards for a period, which gives you a particular perspective on what effectiveness actually looks like in practice. The campaigns that won were rarely the ones that had found a clever trick in a saturated channel. They were the ones that had found a genuine insight and expressed it through the right combination of channels and creative at the right time. That combination is harder to replicate than a single tactic, which is precisely why it holds up longer.

Creator-led content is one area where the pioneer window is still open for many brands. Go-to-market strategies built around creators can access audiences in ways that traditional paid formats cannot, partly because the format still carries novelty and partly because the trust transfer from creator to brand is real. That window will close too, eventually. But it is not closed yet.

How to Build a Growth Strategy That Accounts for Decay

There is no formula that eliminates channel decay. But there are structural choices that make your business more resilient to it.

The first is to invest in brand equity consistently, not just when performance channels start to wobble. Brand equity creates a demand floor that does not depend on any single channel. When a paid channel decays, brands with strong equity retain more of their business through direct, organic, and word-of-mouth. Brands without it fall further and faster.

The second is to build a genuine experimentation practice. Not a quarterly “test and learn” slide in a presentation, but a real allocation of budget and time to channels and formats that are early in their maturity curve. Most of these experiments will not work. That is the point. The ones that do work give you a position in a channel before the competitive flood arrives.

The third is to be honest about what your measurement is actually telling you. If your attribution model credits a channel with conversions that were going to happen anyway, you will systematically over-invest in that channel and under-invest in the demand creation that made those conversions possible. Growth tools and tactics are only as useful as the thinking behind them. The tool does not fix the measurement problem. You have to fix the measurement problem first.

The fourth is to resist the organisational pressure to concentrate budget in what is working right now. I have been in enough board rooms to know that this is genuinely difficult. When a channel is performing, pulling budget from it to fund experiments feels irresponsible. But the brands that wait until performance drops to start experimenting are always behind. The time to plant the next tree is before you need the shade.

Forrester’s work on intelligent growth models makes a similar point from a different angle. Sustainable growth requires a portfolio approach to investment, not just optimisation of what is already working.

The Harder Question Behind the Law

Andrew Chen’s observation is about channels. But the deeper question it raises is about how marketing organisations think about time. Most planning cycles are annual. Most performance reviews are quarterly. Most incentive structures reward this quarter’s numbers over next year’s resilience.

The Law of Shitty Clickthroughs operates on a longer timescale than most planning cycles. A channel can decay slowly enough that the annual plan looks fine, the quarterly review looks fine, and then suddenly the business is in a hole that took three years to dig but feels like it appeared overnight.

When I was growing an agency from twenty to a hundred people, one of the hardest things was convincing clients to invest in capabilities they could not yet measure the return on. The clients who were willing to do that consistently were the ones who were in the best shape five years later. The ones who optimised relentlessly for short-term measurable returns were often in crisis when their primary channel softened.

That is not a criticism of performance marketing. It is a criticism of treating performance marketing as a complete growth strategy rather than one component of one.

There is more on how channel strategy, brand investment, and commercial planning connect in the Go-To-Market and Growth Strategy hub, which covers these themes across a range of contexts and business types.

What to Do With This

The Law of Shitty Clickthroughs is not an argument for pessimism. It is an argument for honesty. Every channel you are currently relying on will perform less well in three years than it does today. That is not a risk. It is a certainty. The question is whether you are building for that reality or pretending it does not apply to you.

The brands that compound over time are the ones that treat channel maturity as a planning input, invest in brand equity before they need it, run genuine experiments in early-stage channels, and measure honestly rather than optimistically. None of that is complicated. Most of it is just uncomfortable, because it requires investing in things that do not show up cleanly in next quarter’s numbers.

That discomfort is worth sitting with. The alternative is to keep optimising a depreciating asset until there is nothing left to optimise.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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