Clickbait, as the name suggests, is a technique by which the user is persuaded (tricked! more likely) to click on the link. In otherwords, it's a process of luring the user. Interesting titles, intriguing subjects and unnatural images are predominantly used for clickbaits.
Most often we see this in video thumbnails. People earn money through ads on their videos and hence require more viewers. Ad banners are another example.
Anything that has an advantage is always misused. Only the user can decide whether it's ethical or not, nevertheless it's a brilliant way of converting to clicks.
It is definitely not an illegal practice. My guess is, it's just a matter of time and it's already happening with google adsense. Similarly, YouTube doesn't disallow clickbaiting even though users find it annoying.
As mentioned before, it's done using intriguing headlines and images. It taps into how human psychology works. Let's discuss different ways of user persuasion
We, the humans, are dopamine mongering. Dopamine is a chemical released in the brain that induces happy feelings. One can release this by eating favorite foods, having sex and consuming alcohol etc.
Revealing secrets or going over suspense also do release dopamine. Bingo!
Nobody wants to be left out. it's an immediate reaction to participate in whatever we feel left out. And also herd mentality, you would want to join if a bunch of people are just going somewhere.
We see this everywhere. Commonly in hotel bookings, we see something like "Only 1 room left at this price".
Images are more effective since the message is very quickly perceived than actual text. When combined, it's even more effective. See some of the examples below.
We all check our messages in our email, phone, chats etc. it's a culture we accepted and continue to do so. So, extending this idea, some sites I've seen this, webmasters, very cleverly place a "1" next to the bell icon or a chat icon. So immediately, we click on it and it's like almost an impulse.
Use this knowledge for gaining more traction for the website or even use them as email subject line. Email providers are much more agressive in filtering the spam and the email ends up in blakclists. Take a look at this interative tool; simple survey for title tags.
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