Paid user acquisition is a curse. Later stage consumer startups that depend on it are the walking dead.

• After launch, ROI declines consistently across every advertising channel
• Early metrics are misleading because traffic is front-loaded due to the way ad algos work

Digital ad metrics have decayed every year since the industry was created.
• CPMs on major ad networks are now increasing at ~40%/yr.
• In 1997, CTR on HotWired was 78%. In 2019, Facebook’s average CTR is about 0.9%.
(H/t @andrewchen)

Facebook/Google algorithms are so good at targeting people that paid acquisition traffic tends to be highly front-loaded.

Founders and investors are often shocked when numbers rapidly decay — because the ad population has been saturated.

So, what’s the answer for these startups? I think a few things:
1. Optimize ad spend as the userbase saturates
2. Build a distribution moat to re-target customers later
3. Focus the core business on things that spread organically
4. Explore emerging advertising channels quickly