Dissecting Dynamic Creative Optimization (DCO)
In the digital marketing industry, algorithms are everywhere. From basic SEO optimization and activity tracking to DSPs and AI-based product suggestions, they are the most common building blocks of modern advertising and a major reason for its success.
For customers, the main function of advertising algorithms is to deliver the perfect ad at the most appropriate time. Static, unalterable ad banners get stale quickly; just like their real-world prototypes, huge street banners, they are often ignored by customers who have learned to filter ads out of sight. Algorithms solve this issue by providing a dynamic, engaging experience and changing the ad content depending on the viewer at the time.
Here is where dynamic creative optimization, or DCO, comes in. It’s an algorithm-based programmatic advertising technology that attracts customers by showing them the best ad for each and every situation. Today, we will talk about the intricacies, importance, benefits, and marketing opportunities DCO provides.
What is Dynamic Creative Optimization (DCO)?
An existing or potential customer clicks on a website link. In a split second, inner mechanisms start working. Ad servers fetch various types of data about the client and to-be-served advertisements, matching them to each other. This process completes before the page fully loads and can take less than a second. As soon as the customer sees the page, everything is already arranged. They see the most relevant ad, with the engaging elements hand-picked by advanced algorithms.
The technique described above is a prime example of how advertisers define dynamic creative optimization. As a way to serve hundreds of unique ads to different customers without manually crafting each ad itself, DCO is a technology that far outperforms static ads and can be optimized further to engage even more buyers. For this reason, marketers are heavily investing in dynamic creative optimization, moving away from simpler methods of serving ads.
How Does Dynamic Creative Optimization Work?
The example above provides a good surface-level understanding of how DCO works: identify the customer, match the ad, load, and proceed. However, the mechanisms of DCO platforms are a bit more intricate. Let’s delve into the details of dynamic creative optimization. It will help to set up the initial process and enable us to take note of common mistakes advertisers may make on the way.
Step 1: Gathering Customer Data
The DCO platform needs to know everything it can about potential clients to make the right judgment. Because of this, marketers need to amass a large amount of information about their customers and feed it to algorithms.
Usually, they use data management platforms to achieve that. DMPs are the best solution since they can host, process, and categorize virtually any amount of data, and DCOs want exactly that.
For our task, customer data can be anything, from IP addresses and device types to browsing history and cookie information. The more information advertisers can get their hands on, the better the DCO platform will fare.
Gathering this data may be the hardest obstacle to overcome. The elimination of third-party data from the Internet and GDPR regulations is bound to cause difficulties in obtaining large amounts of trustworthy information about customers. Nevertheless, it is an unavoidable task if marketers want to use DCO in their campaigns.
Step 2: Forming Creative Elements
Here, advertisers take advantage of creative management platforms, or CMPs, to give algorithms building blocks for their future ads. This is the secret behind dynamic creative optimization: with a huge number of components, platforms can fine-tune ads for the same product for unique customers, highlighting various elements as necessary.
These assets could include visual elements like the color of the font or the ad itself, messages focusing on the specific benefits of a product, banner size, choice of images, and so on. During this process, advertisers are able to unleash their creativity and feed the model with as many options as possible to try and engage every potential customer.
Generally, marketers tend not to encounter serious obstacles, apart from occasional creative blocks. If they have a clear understanding of the future marketing campaign, there should be no problems choosing the most appropriate creatives and feeding them into CMP.
Step 3: Ad Creation
Now, AI comes into play to match the data and creatives from the previous point and create relevant ads for the customers. From here, the DMP, CMP, and AI work closely together. The first provides customer data, the second has a list of available creatives, and AI matches this data together to create the ad.
This matching process can include many factors, depending on the advertisers’ wishes and goals. It can match ads not only based on viewers’ habits and interests but also by taking into account elements like geolocation, time of day, or even weather. For example, brighter color schemes are often more preferable during the day and in sunny weather, while soothing colors tend to be more appropriate at night. The engine takes everything into account before it serves an ad.
The success of this step is directly proportional to the success of the previous steps. If advertisers have managed to gather enough data and produce enough creatives, the engine will take care of everything else.
Step 4: Monitoring, Optimization, and Self-Improving
Dynamic creative optimization is not the same as just dynamic creative. The latter can be described in the first three steps above; it is just a mechanism that places relevant ads, a modern tool for advertisers to engage customers.
The word ‘optimization’ takes the whole concept to a new level and is possible due to the emergence of AI in programmatic advertising. DCO platforms provide detailed statistics for each type of ad served, complete with the number of views, clicks, and conversions. Advertisers can look into the performance of their campaign and make changes; this, however, may not be even necessary.
The engine is capable of comparing the performance of different creatives by itself and eliminating the ads that are falling flat. By repeating this process over and over again automatically, it will leave advertisers with a set of the best-performing ads. The engine can repeat this as many times as necessary, with the advertiser adding new data and creatives on the go.
It is still possible to manually analyze and remove specific ads if a campaign’s specifics require more than pure numbers. However, advertisers can also manipulate the automatic elimination process itself by setting up desirable view, click, or conversion numbers.
In this way, the mechanism can self-improve endlessly, with the limit being the amount of processed data and inputted creatives. This is what makes DCO such a powerful technology: it not only adjusts to the customers but also constantly refines itself, bringing only better results over time.
Why is Dynamic Creative Optimization Important?
DCO is an engine capable of automating the creative part of ad campaigns and optimizing them down the road. With dynamic creative optimization, advertisers do not need to worry about putting too much of their work time into designing and tuning dozens of versions of their ads for the same products and can instead focus on more important tasks.
It is a powerful tool with many ways to improve it, and it is indispensable in larger campaigns that strive to reach huge audiences without losing out on efficiency and targeting.
DCO has three important aspects that make it a key to marketers’ success.
Scalability
The main benefit of DCO is the ability to scale campaigns to any size. If your aim is to engage a smaller audience, a dozen creatives and a pair of decent data sources will suffice. However, if the campaign suddenly grows and gains sizable traction, the DCO platform will still be able to handle that well. All advertisers need to do is add more information, and algorithms will do the rest.
With dynamic creative optimization technology, advertisers do not need to worry about suddenly increasing the scale of their campaigns; they can just choose to expand their reach and advertising options without painstakingly putting in dozens of work hours. Sure, DCOs are not the magic solution that creates ads on their own, but the process of ad generation becomes much simpler with automated algorithms.
Efficiency
Automation makes work easier for marketers; without having to create each ad manually, they can focus on monitoring the performance of their campaigns and budgeting their spend. DCO platforms save time and effort that can be put into other important areas.
Even more importantly, dynamic creative optimization platforms can also analyze the performance of campaigns on their own. Sure enough, advertisers still need to monitor the situation manually to adjust their ad spend and pick up any mistakes AI might make. However, by taking over the majority of the groundwork, the DCO solution lets marketers delve further into issues that cannot be solved by contemporary AI means.
Reducing Bias
Making ad creatives that are based solely on the knowledge of the hypothetical audience can quickly become a pitfall. Assumptions and biases are common in marketing, and DCO allows marketers to eliminate many of them.
Let’s look at a straightforward example. Advertisers can quickly check their hypotheses by serving several experimental ad creatives through DCO platforms and allowing AI to calculate the performance. Since it is largely a game of numbers in terms of clicks and conversions, DCO can handle that task perfectly.
In a more complex scenario, biases can be found in the datasets themselves, which can lead to AI making biased decisions when placing ads. Still, since DCO technology often employs the use of data management platforms, advertisers can analyze their data with much more ease, discovering and eliminating data biases in real time. This, in turn, results in enhanced brand image, relatability, and customer engagement.
Benefits of Dynamic Creative Optimization (DCO)
Dynamic creative optimization is a mix of several cutting-edge technologies, all of which are widely used in digital marketing. As a result, advertisers using DCO benefit from all of them simultaneously.
DMPs are marketing powerhouses on their own, providing marketers with in-depth data analysis to better understand their customers. CMPs are platforms that make DCO possible while providing far more features than just automating the ad-serving process. AI and machine learning are the backbone of it all and keep the advertising machine running.
Here are two key benefits created by the combination of everything above.
Hyper-Personalization
This cannot be stressed enough: DCO is the prime tool for engaging customers. With the ability to generate targeted advertisements for every customer, its engagement power can be considered unparalleled.
With dynamic creative optimization, algorithms are constantly able to choose the perfect product the company provides to show the clients. A well-known example here could be a car manufacturing company. With a static ad for a car model, they can only attract a certain type of customer interested in the extras it provides. With a DCO, the same automotive brand can highlight various models and their benefits at the same time, and each ad can be created automatically. A well-off single buyer might be more interested in luxury models, while others might prioritize safety or practicality for family reasons.
With dynamic creative optimization, every preference and bit of information is taken into account when showing ads, and this tends to resonate with customers better.
Campaign Flexibility
With real-time performance monitoring and adjustable campaign settings, advertisers can make changes on the fly, which is fundamental in the current fluid marketing landscape.
With static ads, the only choice for a poorly selling commercial would be to either remove or replace it with another one. DCO doesn’t have that problem: not only can the creative be altered manually by the marketer on the platform, but AI also regularly takes care of the ads that are not faring so well.
Dynamic creative optimization allows marketers to adapt to audience changes and real-world circumstances without making changes to the entire campaign. The combination of AI fine-tuning and human monitoring makes DCO a very flexible and compelling solution.
Exploring the Digital Revolution: What is DCO Marketing?
In search of personalization tactics, marketers have created a tool that helps save time and budget while successfully target the intended audience: dynamic creative optimization. DCO marketing is a strategy that puts dynamic creative as its main focus, aiming to drive up or maintain customer engagement while expanding reach.
Recently, personalization has been a major topic of marketers’ discussions. Over 90% of customers prefer to shop with brands that recognize their customers and send relevant offers, and 80% of them choose brands that personalize their experiences. With such numbers, DCO has become the lifeline of modern digital marketing. As machine learning advances, customers will only see more hyper-targeted ads. Modern marketing is not about telling brands’ stories anymore; it is about seamlessly integrating itself into customers’ lives with relevant products and offers.
Because of this, dynamic creative optimization will continue to gain traction. It has already revolutionized marketing, and its ripple effect will only become more noticeable in the future.
