Dynamic Creative Optimization (DCO): All You Need To Know

  • Post Category:Mobile Advertising
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  • Post last modified:January 21, 2021

Underperforming ads are a nightmare for every advertiser. And most  marketers acknowledge the fact that personalization is the most important tool when you want your ads to do the work they were meant to.

If you want to stand out from your competitors and give your shoppers a unique experience, DCO (dynamic creative optimization) is the best solution out there.

Marketers are using personalization to the maximum possible extent to make sure that they gain new customers while retaining the existing ones.

The graph below shows how personalization when used in various forms of digital marketing has a direct impact on the number of respondents. 

Source: Statista

 

Studies done by Google Marketing and Measurement Survey have indicated that more than 90% of marketers believe that personalization is one of the critical strategies contributing to business profitability.

In this article, we will understand more about DCO, it’s working, and how it can be a vital factor in your digital marketing strategy.

What is Dynamic Creative Optimization (DCO)?

DCO is a display ad technology that uses personalized ads based on the user data at the moment of ad serving.

This technology integrates graphics within an ad’s creative while utilizing customer-specific data such as age, location, gender, etc. This, in turn, will help to enhance the functionality and responses of the ads.

While designing such ads, the graphic component will be pre-defined during the campaign’s setup, whereas the dynamic real-time information is added for each user before the ad is served.

The technique of dynamic creative optimization is not merely limited to filling personalized data with generic creatives.

DCO utilizes AI and machine learning to select the most relevant components for the viewers in real-time.

And the end result?

Highly optimized and creative content.

Dynamic creative optimization is a technique of creating personalized ads with the help of display ad technology.

In this process, real-time campaigns are created through programmatic means. The whole idea is to fill up your ad banner with a mix of live analytics, real-time data, and optimization.

Since the ads created out of dynamic creative optimization are hyper-relevant to the audience, the impact that it can make on its viewers are multifold when compared to static ads.

In this technology, the focus is mainly on creating relevant messages to target a specific customer group by collecting data from multiple creatives.

The input data is usually gathered from Data Management Platforms (DMP) and Demand Side Platforms (DSP).

A marketer working with dynamic creatives understands the audience and chooses the best combination of creatives as a responsive feed. The process determines the best choice for the viewer from pre-made elements and serves them as smart feeds.

DCO has two main components:

1. Dynamic component

This refers to the elements of the ad that have database elements. The dynamic components are usually controlled by algorithms and are appropriate for rich media design, engaging content, creative optimization, etc.

2. Static Component

These are static units that use an algorithm to select and display the creatives. This takes some time to prepare and takes complex coding abilities.

How does DCO work?

The work of DCO can be explained with a simple example. 

A user is searching for properties in a particular geographical location. All of a sudden, he gets an ad that talks about housing and finance loans.

Don’t you think it is excellent?

In most cases, this is precisely the thing a user would be looking for after his search.

In the world of digital marketing, the interaction of a user with the webpage, their information, actions, etc., are all essential parts of an advertisement’s creative.

When users first visit a web page, they are most likely to see generic ads created for general audiences.

But with the involvement of DCO, the approach completely changes. The data feeds involved in DCO collect the information and craft out creatives specific for each user.

It automates your creatives’ optimization by tracking ad performance such as CTR, conversion rates, and various other metrics to ensure relevance.

This is a win-win situation as the marketer receives better ad responses, and the user gets a more personalized experience.

Equipped with the power of deep learning, DCO uses profiled devices and data points to run continuous A/B testing.

With dynamic creative optimization, marketers can break an ad into multiple pieces and create different versions to suit different audiences.

Each ad uses a template of one to four dynamic elements and can rearrange it in several different combinations. 

Just imagine your ad space as a blank canvas. When a user is about to view the ad space, various algorithms are simultaneously processed by the DCO to understand the user’s intent and behavior, such as recency, purchase frequency, interactions, etc.

According to this, a call to action, a visual, and messaging are combined on the spot and displayed to the user.

The following are key to its performance:

  1. Data Management Platform: DMP collects and manages the users’ data to build audience groups for online advertising campaigns.
  2. Advertisers catalog: A feed of information from marketers such as a discount, metadata. Inventory status etc.
  3. Rich Events: Identifying the user’s intent by capturing web engagement, app postbacks, or web engagement. Such as funnel stages, affluence, etc.

Benefits of Dynamic Creative Optimization

Before planning to use the DCO as a part of your digital marketing strategy, let us look at some of its advantages over other methods.

1. Provide real-time response

Previously, it took a lot of time and effort to choose the right ads and target a specific audience group.

DCO makes it very easy for the marketer to display the most relevant ad for the user by collecting various information such as display, location, buying pattern, etc. 

The real-time response to a customer increases the likelihood of more responses, which will increase sales.

2. Personalize to the maximum possible level

As a marketer, you might have noted that your audiences have varying interests. The extent of personalization made possible by the DCO has completely revolutionized the world of digital marketing.

Different groups of audiences have various interests. This is especially true for those who are over 40 years of age.

For example, one user is interested in fitness equipment that improves their health; whereas another user is looking for herbal supplements.

3. Fully automated

Since the technology of Dynamic Creative optimization is fully automatic, there is no need for the user to make a manual effort on their part.

Once set with the right parameters, the optimization keeps working on its own.

This technology is completely self-reliant in gathering all the relevant information and producing the most appropriate creative with minimal effort. 

The hands-free automation helps to save an immense amount of time while your marketing team monitors the performance.

The system fully ensures that the right mix of creatives is served to the user. This is generated automatically based on third-party data sources.

4. Quick results

The technology helps to give an immediate impact and boost the overall performance of your ad.

This is the perfect solution for providing customized and fast ad delivery. By investing in DCO, you invest in a technology that gives far-reaching results in your business and appreciate the importance of delivering a personalized experience.

5. Programmable rules

DCO campaigns can be programmed with the help of a DSP. This will help to align the campaign as per your requirement. 

Examples of Dynamic Creative Optimization (DCO)

DCO can be used to serve highly interactive ads in diverse verticals and multiple markets. Some of these include:

Ecommerce

The technique offers infinite possibilities in the retail and ecommerce sectors. Here adaptive messages are created based on several factors such as customer interests, gender, age group, lifestyle, etc.

DCO can be rightfully employed for creating time-limited ads such as “offer of the day,” “end of season sale,” product retargeting ETC.

This method also helps to include local promotions by including local incentives.

Financial services

Over the years, several financial services such as banks, insurance providers, and other financial organizations could reap immense benefits out of DCO.

The need for financial organizations to frequently update their creative makes them an ideal candidate for DCO.

Since loan rates, stock prices, and similar figures continuously fluctuate in the financial world, using dynamic creative optimization helps them reap immense benefits.

Using this technique, financial organizations can produce weekly/monthly creative changes.

Other dynamic elements, such as loans, interest rates, branch locations, offers, and benefits, can be used.

Automotive sector

People are picky in purchasing a vehicle mainly because it is costly, and there are so many alternate options out there.

Most customers take more than a month before finally deciding what vehicle to buy. With the power of DCO, marketers can deliver highly targeted and personalized messages during this time frame. This could serve as an influential factor to incite the customer to purchase your product.

The behavioral data regarding auto-related products can be easily obtained from third-party providers. It will be easier for the advertiser to target the audience with the right kind of data. 

It is a well-known fact that all models are not available with a particular dealer located in a specific region.

Often you might have noticed ads that point to “dealer near you” on the website. This is a part of the DCO campaign.

With the power of dynamic creative optimization, marketers can adjust the ad to suit various audience specifications such as age, product offers, interests, etc., and create a tailor-made campaign for them.

Here dynamic creative elements such as dealer location, car models, preferred color, etc are used to create a custom made campaign to interest your audience.

Travel and tourism industry

Dynamic creative optimization finds its place in the travel industry. DCO can help serve creative ads based on customers’ travel behavior. This includes data on properties viewed, flight history, hotels they have stayed, etc.

Travel companies and airlines use dynamic creatives to target their audience and offer them attractive fares based on their departure points. This might also include reward programs for retaining the audience.

Bottom Line

In this article, we have mentioned DCO and the immense potential it offers in serving real-time ads to your target audience.

With the right strategy, marketers can find immense success in retaining their audiences and boosting up sales.

In today’s world, where brands are in a rat race to grab more customers, marketers need to start getting familiarised with the concept of DCO to stay ahead of the competition.

Learn more about DCO and its working in our follow up articles:

  1. CMP vs DCO: What is the difference?
  2. What is Facebook Dynamic Creative?
  3. Programmatic Creative Vs. DCO

Alvin

Alvin is the Founder and CEO of MobileAds.com. He is a go-getter, and adventurous guy who believes in working smart to gain success in his business ventures and in life. He also founded RichMediaAds.com and MobileLanders.com.