The dark side of optimization How to avoid the "death spiral"

Overview

A business milestone that prompted a rebrand

RH2 is a mid-sized engineering firm specializing in utility and infrastructure work for municipal clients throughout the Pacific Northwest. They were about to celebrate 40 years in business, but their branding had not been caught up to represent their growth within the past 10 years. D2 helped RH2 celebrate 40 years with a full rebrand of their logo, signage, business cards and collateral materials.

Optimization Death Spiral.

As a marketing manager, you know to follow the money. If a channel is consuming most of your budget, focus your time optimizing that channel’s performance. But what if optimizing a channel in a vacuum can actually destroy your success? That’s how you inadvertently enter the death spiral.

Imagine a paid search campaign. You optimize its performance to drive more and more conversions and sales through keyword refinements, bid adjustments, and message tweaking. You learn what message works really well and you then increase its budget to drive volume. Everyone’s happy, right?

The problem is that in doing so, you’re not optimizing your message, you’re optimizing your message on that channel by filtering out unwanted traffic. But what about the traffic unmotivated by a particular message? Your conversion rates will improve, but only with a smaller and smaller segment of the market. Your message has lost all flexibility as you take bigger slices of a shrinking pie.

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