In the ever-evolving landscape of digital advertising, the ‘shake shake’ ads emerged as a novel concept during the double 11 shopping festival of 2023. What started as an innovative marketing strategy quickly spread across various platforms, turning from a curious novelty into an omnipresent annoyance.
everytime one opens an app, an ad shows up filling up the whole screen. unlike the conventional way of visiting the ads by clicking, for a shake ad, one has to ‘shake’ to be re-directed. seriously, who would do that? it’s just fraud.
To understand how it works fisrt we have to look deeper into the dynamics of the advertising industry. Traditional models simply assume a two-component market with sellers and buyers, where advertising slots are auctioned off to the highest bidding buyer - a straightforward transaction. However, the real industry operates on multiple layers of complexity. Social apps like XiaoHongShu began selling their prime opening ad slots to large e-commerce sites such as T-Mall or JD, who would then resell these slots, bundled with other advertising options, to third-party retailers.
On the surface, this model seemed beneficial. Social media platforms monetized their user base, while advertisers got a captive audience. Consumers, in theory, received ads that signaled quality and relevance. Yet, the implementation faltered. The sensitivity of these ‘shake-to-view’ ads was set so low that even a minor movement triggered a redirect to the advertiser’s page, leading to widespread user frustration.
A deeper look reveals a misalignment within the industry. The surge in click-through rates, a triumph for the large e-commerce platforms and promotional departments of third-party retailers, didn’t translate to actual sales, frustrating the operations teams focused on return on investment. This discrepancy arose from the compartmentalized KPIs of these departments, each operating in a silo.
From a consumer standpoint, the experience deteriorated rapidly, besieged by incessant and intrusive ads. For third-party companies, the situation was doubly detrimental. They faced higher costs for less effective advertising, coupled with a decline in consumer goodwill. Anecdotal evidence even suggests that platforms bundled these ineffective ads with more impactful advertising options, forcing smaller sellers into unfavorable agreements.
Overall, social surplus is down for lower consumer match with worse experience. This is a classic example when the model works fine but the real market gets fucked up with misaligned incentives.