Novelty effects: Everything you need to know

Novelty effects occur when the introduction of a new feature in a product temporarily distorts its perceived value, primarily in high-frequency products, and are not to be confused with statistical errors or biases. These effects can lead to misleading product decisions if not properly understood and managed, as they often overshadow the actual long-term impact of the feature. Although novelty effects are temporary, they can be beneficial when harnessed correctly, as they can drive initial user engagement and excitement. Businesses should use metrics that accurately reflect user intentions and examine time series of treatment effects to identify and control for novelty effects. While short-term metrics like click-through rates may spike due to novelty, they may not indicate lasting value, thus longer-term metrics should be used for decision-making. Ignoring or misinterpreting novelty effects can lead to poor product strategies, but when leveraged appropriately, they can enhance strategic moves and amplify marketing efforts.