In 2012, Andrew Chen published an essay that named something every growth team already felt in their bones but hadn't articulated cleanly. He called it the Law of Shitty Click Through Rates. The thesis: over time, all marketing channels experience declining performance. Not some channels. Not poorly managed channels. All of them. The mechanism is structural, not operational. And the implication rewires how serious operators think about distribution, growth, and channel strategy.
The evidence starts at the beginning of internet advertising. On October 27, 1994, AT&T placed the first banner ad on HotWired.com. It was a simple rectangle — "Have you ever clicked your mouse right HERE? You will." — and it achieved a 44% click-through rate. Nearly half of everyone who saw it clicked. By 2003, the average display ad CTR had fallen to 0.5%. By 2024, it sat at 0.35%. The channel didn't get worse. The novelty evaporated. Users learned to ignore the rectangles. Designers called it "banner blindness" — a term coined by Benway and Lane in a 1998 usability study at Rice University that demonstrated users could complete tasks on ad-heavy pages without consciously registering any of the ads. The 44% CTR wasn't a reflection of banner advertising's effectiveness. It was a reflection of its unfamiliarity.
Email tells the same story on a different timeline. In the early 2000s, commercial email open rates regularly exceeded 90%. By 2010, the average had dropped to roughly 30%. By 2024, Mailchimp's benchmark data pegged average open rates across industries at 21.3%. The mechanism was identical: early recipients treated email from brands as novel and interesting. As volume increased — the average office worker received 121 emails per day by 2023, according to Radicati Group — users developed filtering behaviors. Promotional tabs in Gmail. Unsubscribe habits. The unconscious scroll past anything that looks templated.
Facebook organic reach followed the same arc with a different twist. In 2012, a brand's post on Facebook reached approximately 16% of its followers organically. By 2014, that number had dropped to 6.5%. By 2024, estimates placed average organic reach at 1.9–2.2%. Part of this was the standard novelty decay — users grew accustomed to branded content in their feeds. But Facebook added a second force: deliberate throttling. As the platform matured, Facebook shifted its algorithm to prioritize paid distribution over organic, converting organic reach into a monetization lever. The channel degraded through both user habituation and platform economics simultaneously.
Chen's insight was not that any single channel degrades. It was that degradation is the default state of every channel, and the forces driving it are structural. Three mechanisms operate in parallel. First, novelty erosion: users encounter the format, learn its patterns, and develop unconscious filtering. Second, saturation: as more companies adopt a channel, the signal-to-noise ratio collapses. When one company sends email, it's personal. When ten thousand companies send email, it's spam. Third, platform capture: the platforms that control distribution — Google, Facebook, Instagram, TikTok — have economic incentives to degrade organic performance and sell the delta back as advertising. The channel isn't broken. It's been monetized.
The strategic implication is uncomfortable: every growth hack has a half-life. The tactic that drives your best numbers today will produce your worst numbers in three years. Google AdWords averaged $0.05 per click in 2002. By 2024, the average CPC across all industries exceeded $4.22 — an 8,340% increase. The channel still works, but the economics have shifted from bonanza to bare margin for anyone without structural advantages in conversion or lifetime value.
The founders and operators who internalize this build differently. They invest in owned audiences — email lists, communities, direct relationships — that don't depend on platform algorithms. They diversify channels before the current one degrades. They treat distribution as a portfolio, not a bet. And they accept that the search for new channels is permanent, not a problem that gets solved once.
Section 2
How to See It
The Law operates whenever a marketing channel's effectiveness declines despite consistent or improved execution. The diagnostic: your tactics haven't changed, your spend hasn't changed, but your results are deteriorating. That's not an execution failure. That's the Law.
The signal is clearest in longitudinal data. Plot any channel's primary performance metric — CTR, open rate, organic reach, conversion rate — across a five-year window, and the slope is negative. The rate of decay varies by channel. The direction does not.
You're seeing the Law of Shitty Click Through Rates when a channel that once drove your best acquisition numbers gradually becomes your worst — and no amount of optimization reverses the trend.
Startups
You're seeing the Law when your early-stage growth channel hits a wall that optimization can't fix. The first hundred customers came from cold outreach on Twitter DMs. The next thousand came harder. By ten thousand, the channel is dead. Early adopters of Twitter DMs as a sales channel in 2015–2017 saw response rates above 30%. By 2023, response rates for unsolicited DMs had fallen below 3%. The first movers in every channel harvest the novelty premium. The followers harvest the leftover attention.
Marketing & Growth
You're seeing the Law when your content marketing ROI declines year over year despite increasing production quality. In 2010, publishing a well-researched blog post could generate thousands of organic visits. By 2024, the average blog post receives 1.6 social shares and generates fewer than 100 organic visits in its first month, according to Backlinko's analysis of 3.6 billion pages. The channel saturated. The algorithmic distribution shifted. The content didn't get worse — the environment absorbed it.
E-commerce
You're seeing the Law when your customer acquisition cost on a paid channel rises steadily while conversion rates decline. Facebook Ads CPM (cost per thousand impressions) averaged $5.12 in 2020. By 2024, it exceeded $11.50. The same ad, same audience, same creative — twice the cost for diminishing returns. The platform extracted the value that your optimization created.
Product
You're seeing the Law when a product's viral loop weakens over time. Dropbox's referral program — "give storage, get storage" — drove explosive growth in 2008–2012. By 2015, the referral mechanism still existed but produced a fraction of the signups. Users had seen the pattern. Cloud storage was no longer novel. The referral offer that once felt generous now felt ordinary.
Section 3
How to Use It
The Law doesn't counsel despair. It counsels realism about channel lifespans and deliberate investment in structural durability.
Decision filter
"Before doubling down on any growth channel, ask: how much of this channel's performance is driven by novelty versus structural advantage? If novelty is the primary driver, what is the channel's half-life — and what am I building that will still work when the novelty is gone?"
As a founder
Build your growth strategy as a portfolio, not a single bet. Identify which channels are in their novelty phase (high performance, low competition), which are in their mature phase (declining performance, high competition), and which are emerging (unproven but underpopulated). Allocate aggressively to novelty-phase channels while they last, but simultaneously invest in owned distribution — email lists, communities, direct customer relationships — that don't degrade with platform algorithm changes.
The founders who survived the Facebook organic reach collapse of 2014–2016 were the ones who had built email lists in parallel. Glossier collected email addresses from every Into The Gloss reader before launching a single product. When Facebook organic reach fell from 16% to 2%, Glossier's email list remained at 100% deliverability and ~40% open rates. The owned channel was immune to the Law because no platform sat between Glossier and its audience.
As an investor
Evaluate a company's growth channels through the lens of structural durability. A startup whose entire acquisition engine depends on a single platform-controlled channel — Facebook Ads, Google SEO, TikTok organic — carries channel risk that compounds over time. The Law guarantees that the channel will degrade. The question is whether the company has built alternatives before it does. The strongest growth stories in venture portfolios are companies that rode an early channel wave and then transitioned to owned distribution before the wave receded. The weakest are companies that never made the transition — and watched their unit economics deteriorate as the channel decayed beneath them.
As a decision-maker
Budget for channel decay explicitly. If your primary acquisition channel delivered a $30 CAC this year, model a 15–25% annual degradation and plan accordingly. This is not pessimism — it's the base rate. Companies that budget for stable CAC and encounter the Law's degradation face a cash flow crisis. Companies that budget for degradation and invest in channel diversification maintain strategic flexibility. The Law also informs channel selection: prefer channels with higher structural durability. Word-of-mouth, product-led growth, and community-driven acquisition degrade more slowly than paid media because they don't depend on platform algorithms or ad auction dynamics.
Common misapplication: Blaming execution when the Law is the cause. Teams that see declining CTRs often respond by redesigning creative, adjusting targeting, or increasing spend. These are operational fixes to a structural problem. Optimization can slow the decay — it cannot reverse it. The correct response is not better execution on a degrading channel. It's portfolio rebalancing toward channels with remaining headroom.
Second misapplication: Assuming the Law means marketing doesn't work. The Law describes channel-level decay, not marketing-level futility. The most effective growth teams are not the ones that find a single permanent channel. They are the ones that develop the organizational capability to identify, exploit, and transition between channels faster than the decay rate. HubSpot has survived multiple channel transitions — from SEO blogging (2006–2012) to inbound marketing tools (2012–2018) to freemium product-led growth (2018–present) — because the company built the muscle to detect decay early and migrate before the numbers cratered. The skill is not finding the perfect channel. The skill is channel surfing.
Section 4
The Mechanism
Section 5
Founders & Leaders in Action
The founders below demonstrate two strategies for navigating the Law: one who built an entire company on channel diversification before any single channel degraded, and one who recognized that the Law applied to his industry's distribution model and restructured accordingly.
Lütke built Shopify with the Law baked into its architecture. Shopify's value proposition was never tied to a single distribution channel — it was the platform that enabled merchants to sell across every channel simultaneously. When Facebook organic reach collapsed in 2014–2016, Shopify merchants who had diversified into email, SEO, and direct traffic survived. When iOS 14's App Tracking Transparency update in 2021 decimated Facebook Ads targeting — reducing ROAS by 30–40% for many e-commerce brands — Shopify had already invested in Shop Pay, Shop App, and Shopify Audiences, giving merchants owned distribution tools that didn't depend on Facebook's algorithm. Lütke understood that his merchants' growth channels would degrade. His response was not to pick a winner but to build the infrastructure that made channel transitions seamless. By 2024, Shopify powered over 4.6 million stores globally — and the merchants who thrived were the ones who used the platform's multi-channel architecture to stay ahead of the Law's decay curve.
Hastings executed the most visible channel transition in modern media. Netflix's original distribution channel was DVD-by-mail — a physical product delivered through the US Postal Service. By 2007, the channel was mature and facing structural decay: postal costs were rising, delivery times created friction, and the Blockbuster model was collapsing in a way that would eventually eliminate the cultural habit of renting physical media. Hastings recognized that the channel's half-life was finite. He launched Netflix streaming in 2007, when the DVD business was still generating $1.2 billion in annual revenue. Wall Street punished the decision — Netflix's stock dropped 77% in 2011 after the Qwikster debacle — but Hastings was navigating the Law. The DVD channel was degrading. Streaming was the novelty-phase channel. By 2024, Netflix had 260 million streaming subscribers globally, and the DVD business had been shut down entirely. Hastings didn't wait for the channel to die. He built the replacement while the existing channel still produced revenue — the canonical response to a Law that guarantees every channel eventually degrades.
Section 6
Visual Explanation
The three curves tell the complete story. Banner ads (dashed red) entered in 1994 at 44% CTR and decayed to 0.35% — a 99.2% decline over three decades. Email (gold) entered in the early 2000s at 90%+ open rates and settled at ~21%. Facebook organic reach (dotted navy) entered in 2012 at 16% and collapsed to ~2% in barely a decade — accelerated by the platform's deliberate monetization of the attention gap. Every curve follows the same shape. The three forces of decay — novelty erosion, channel saturation, and platform capture — operate on all three simultaneously. The phase labels along the bottom serve as a diagnostic: identify where your primary channel sits on the curve, and plan the transition before the decline reaches your unit economics.
Section 7
Connected Models
The Law of Shitty Click Through Rates connects to models of system decay, competitive dynamics, and distribution strategy. The six connections below map why channels degrade, what strategic responses the Law demands, and which frameworks help operators navigate the permanent search for distribution.
Reinforces
[Entropy](/mental-models/entropy)
Entropy describes the tendency of all systems to move toward disorder without sustained energy input. The Law of Shitty Click Through Rates is entropy applied to marketing channels — every channel drifts toward lower effectiveness unless the operator continuously invests in novelty, format innovation, and audience development. The second law of thermodynamics guarantees that maintaining channel performance requires increasing energy over time. The founders who treat distribution as a solved problem are the ones who discover, too late, that entropy has eroded the channel beneath them.
Reinforces
Diminishing Returns
Diminishing Returns describes the declining marginal output from increasing input. The Law extends this to channel-level dynamics: the first dollar spent on a new channel produces the highest return, and every subsequent dollar produces less. The mechanism is the same — saturation of the input relative to the available output — but the Law adds a temporal dimension. Diminishing Returns operates within a single campaign. The Law operates across the channel's entire lifespan. Both demand the same strategic discipline: recognize the inflection point and reallocate before returns collapse.
Tension
Platform Risk
Platform Risk is the vulnerability created by dependence on a third-party platform for distribution. The Law explains why platform risk compounds over time: the platform that provided generous organic reach in its growth phase will throttle that reach in its monetization phase, converting your audience into their revenue. Facebook, Instagram, TikTok, and Google have all followed this pattern. The Law and Platform Risk together form a single argument: build on owned channels, because rented distribution degrades by design.
Section 8
One Key Quote
"Over time, all marketing strategies result in shitty clickthrough rates."
— Andrew Chen, 'The Law of Shitty Clickthroughs' (2012)
Chen's phrasing is deliberately blunt. "Shitty" is not the word that appears in strategy textbooks, and that's the point. The Law is not an elegant theoretical observation. It's a field report from the trenches of growth engineering, where teams that execute flawlessly still watch their numbers decay because the forces driving the decline — user habituation, competitive saturation, platform monetization — are structural, not operational. No amount of A/B testing, creative refresh, or targeting refinement reverses the underlying trajectory. It slows the curve. It does not change the curve's direction.
The directness of the phrasing also serves a diagnostic function. When a growth team presents declining metrics, the first question is always "what went wrong?" The Law reframes the question: nothing went wrong. Decline is the default state. The useful question is not why the numbers are falling but what the team is building to replace the channel before the decline reaches equilibrium. The founders who internalize the Law stop chasing optimization on degrading channels and start building the organizational capability to identify and migrate to new channels before the old ones die. The quote is memorable because it names an uncomfortable truth that most growth strategies are designed to ignore.
Section 9
Analyst's Take
Faster Than Normal — Editorial View
The Law is the single most underappreciated concept in startup growth strategy. I've watched dozens of companies hit the same wall: an acquisition channel that carried them from zero to $5M ARR begins degrading, the team responds with optimization instead of diversification, and the company spends eighteen months trying to fix a structural problem with operational solutions. By the time they accept that the channel is dying, the cash position is too thin to invest in alternatives. The Law doesn't kill companies directly. It kills them by consuming the time and capital they needed to build the next channel.
The strongest signal I look for in growth-stage companies: channel diversity with a pipeline of emerging channels. A company that generates 80% of its revenue from a single paid channel is not growing. It's renting attention on a depreciating asset. The best operators run three to four channels simultaneously, with one in novelty phase (high experimentation, low spend), one or two in mature phase (optimized, scaled), and one being intentionally wound down. That portfolio approach is the only rational response to a Law that guarantees every individual channel's decline.
The iOS 14 update in April 2021 was the Law's most dramatic recent expression. Apple's App Tracking Transparency framework reduced the data available for Facebook and Instagram ad targeting, causing CPMs to spike and ROAS to plummet for thousands of e-commerce brands. Companies that had diversified into email, SEO, influencer, and community-driven acquisition absorbed the shock. Companies that had built their entire acquisition engine on Facebook Ads experienced a crisis that many did not survive. The update didn't create the problem — the Law had already degraded Facebook's organic performance by 90% over the preceding decade. The update simply accelerated the paid side of the same structural dynamic.
The non-obvious implication: the Law applies to content formats, not just channels. Blog posts degraded. Then infographics degraded. Then video degraded. Then podcasts began degrading. Then short-form vertical video (TikTok, Reels) began its novelty phase — which is already visibly decaying as of 2024–2025. The Law operates at the format level within each channel, creating a nested decay curve that demands continuous format innovation on top of channel diversification. The operators who win are the ones running experiments on the next format before the current one hits the decline phase.
The deepest strategic response to the Law is building a brand that transcends any single channel. Channels degrade. Brands compound. Apple doesn't depend on any specific acquisition channel because the brand itself drives demand — people search for Apple, not the other way around. The Law is strongest against companies that are channel-dependent and weakest against companies that are brand-driven. The ultimate hedge against the Law is building something people seek out regardless of which channel delivered the first touchpoint.
Section 10
Test Yourself
The scenarios below test whether you can identify the Law in action and distinguish structural channel decay from operational underperformance. The key diagnostic: is the decline driven by user habituation, competitive saturation, or platform economics — or by genuine execution failures that can be fixed?
Is the Law of Shitty Click Through Rates operating here?
Scenario 1
A D2C skincare brand built its business on Facebook and Instagram Ads between 2018 and 2021, achieving a consistent 4x ROAS. In 2022, after iOS 14.5, ROAS dropped to 2.2x. The team responded by hiring a new creative agency, testing 200+ ad variations, and rebuilding their attribution model. By late 2023, ROAS had improved to 2.6x but never recovered to pre-2021 levels despite spending 40% more on creative production. The CEO describes the situation as 'a temporary setback we're optimizing our way through.'
Scenario 2
A B2B SaaS company launched a cold email outreach program in 2019 and achieved a 12% reply rate. By 2024, using the same targeting methodology and similar messaging templates, the reply rate has fallen to 2.8%. The sales team has tested personalization at scale using AI tools, adjusted send times, and segmented their lists more aggressively. Each optimization produces a brief spike in performance that quickly reverts to the declining baseline.
Scenario 3
A media company launches a TikTok account in early 2023 and achieves viral growth — multiple videos exceeding 1 million views, 500,000 followers within six months. By mid-2024, average views per video have dropped from 250,000 to 35,000 despite posting frequency, production quality, and topic selection remaining consistent. The social media manager reports that TikTok's algorithm 'seems to have changed.'
Section 11
Top Resources
The Law of Shitty Click Through Rates sits at the intersection of growth engineering, behavioral psychology, and platform economics. Start with Chen's original essay, layer in the empirical data from Nielsen and Cialdini, and finish with the strategic frameworks that help operators build channel-resilient businesses.
The origin text. Chen's essay is concise — under 1,500 words — and its power is in the simplicity of the observation. Every marketing channel degrades over time. Chen provides the historical data (banner ad CTRs, email open rates), the mechanism (novelty erosion, saturation, platform dynamics), and the strategic implication (build for channel diversification, not channel optimization). The essay has aged better than most growth content because it describes a structural pattern rather than a tactical playbook.
Krug's usability classic explains the cognitive mechanisms that drive banner blindness and format habituation. Users develop unconscious navigation patterns that filter out anything perceived as non-essential — and commercial content is the first category to be filtered. Understanding Krug's framework explains why the Law operates at the neurological level: users are not choosing to ignore ads. Their brains are doing it for them, automatically, as an efficiency optimization.
Cialdini's six principles of influence — reciprocity, commitment, social proof, authority, liking, scarcity — explain why marketing channels work at all, and his updated edition addresses why those principles lose potency through overuse. When every email uses scarcity ("limited time offer"), the scarcity signal degrades. When every landing page uses social proof ("10,000 customers trust us"), the social proof becomes noise. The Law is Cialdini's principles subjected to the force of repetition across an entire channel.
Weinberg and Mares catalogue nineteen traction channels and provide a framework — the Bullseye Framework — for systematically testing which channels work for a specific business. Read through the lens of the Law: every channel in the book will eventually degrade, and the framework's real value is not finding the one right channel but building the organizational capability to test, adopt, and transition between channels continuously.
Ellis coined "growth hacking" and this book provides the operational framework for high-tempo experimentation across acquisition, activation, retention, and monetization. The Law adds the strategic context that the book sometimes lacks: every growth hack has a half-life. The experimental velocity that Ellis advocates is the correct response to the Law — not because any single experiment will produce a permanent channel, but because continuous experimentation is the only way to discover the next channel before the current one degrades past profitability.
The Law of Shitty Click Through Rates — every marketing channel follows the same trajectory from novelty to saturation. The strategic response is channel diversification, not optimization of a degrading channel.
Leads-to
[Distribution](/mental-models/distribution)
Distribution is the strategic layer that the Law forces operators to take seriously. The Law demonstrates that no single distribution channel is permanent — which makes the meta-skill of identifying, acquiring, and transitioning between channels the most valuable growth capability. The companies that win over decades are not the ones that found the best channel. They're the ones that built the organizational muscle to find the next channel before the current one degrades past the point of profitable operation.
Reinforces
Red Queen Effect
The Red Queen Effect — named for the character in Through the Looking-Glass who must run constantly just to stay in place — describes competitive environments where continuous effort is required to maintain relative position. The Law creates a Red Queen dynamic in growth: your channel performance degrades even if your execution improves, because the environment (user habituation, competitor saturation, platform economics) is changing beneath you. Standing still on channel strategy means falling behind. The only sustainable position is continuous movement.
Leads-to
[AARRR](/mental-models/aarrr)
The AARRR framework (Acquisition, Activation, Retention, Referral, Revenue) maps the full customer lifecycle. The Law primarily operates on the Acquisition layer — the top of the funnel where new users enter — but its effects cascade downward. When acquisition costs rise due to channel decay, the entire funnel must compensate: activation rates must improve, retention must strengthen, and referral loops must contribute more to offset the declining efficiency at the top. Companies that invest in mid-funnel and bottom-funnel optimization are building resilience against the Law's inevitable pressure on acquisition.
