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Dynamic creative optimization: What is it and how can it be used in modern advertising?
November 23, 2022
In the current economic climate, it is more important than ever for a brand’s advertising budget to be fully used and optimized. However, for an ad to truly make an impact and be memorable, it must be tailored to a user’s preferences and profile.
That’s where dynamic creative optimization (DCO) comes into play.
What is dynamic creative optimization?
DCO is a form of programmatic advertising that allows advertisers to optimize the performance of their creative using real-time technology.
As the cookie-less advertising world emerges, DCO is becoming increasingly important for marketers and advertisers.
DCO leverages artificial intelligence (AI) to deliver and optimize personalized and relevant ads in real-time that match the message to the right audience whilst creating an immersive digital environment and a better customer experience. An example of this is the upcoming FIFA World Cup, where ads can be tailored, using DCO and Deep Learning, to the results of live matches.
DCO has the advantage of speed and flexibility over static creatives because it relies on data feeds to store content for dynamic ads and includes testing and real-time analytics. It also helps advertisers access deeper insights about their audiences and ad content, which enables them to create more engaging ads. Ultimately, however, the algorithms choose the optimal creative elements and display options based on data inputs to increase the effectiveness of display, social and video ads.
What are the benefits of DCO?
Personalized ads are the best way for brands to stand out in the noise of the digital age. If a brand’s ads are not tailored to their target customers’ preferences, they will remain invisible and unnoticed.
Using DCO, brands can utilize Deep Learning technology to optimize display campaigns for maximum performance. This enables a brand to scale its unique ad experience, using smart messaging to target user pain points and help them feel connected to a brand, which extends the brand’s digital presence and increases brand awareness.
Modern DCO solutions are more sophisticated than their earlier counterparts and offer total creative layout control where advertisers can create a customized ad template. The predictive AI algorithms customize the creatives in real-time, automatically selecting the most appropriate design elements for each creative based on many buying intent signals.
Fully-automated & cost-effective
The DCO decision-making process happens each time an ad impression is delivered and produces changes in the creative elements to match the message to the audience. This means the most relevant ad content is picked every time the ad is served and leads to more effective campaign performances. Additionally, DCO can test images, layouts, CTAs, offers and more to create relevant ad messaging. It can even use dynamic elements such as stock prices, interest rates and locations.
Using connected data sets to match the message to the audience and optimize creatives for every audience helps brands save time and resources over manual CRO (conversion rate optimization) tasks and ensures every ad campaign is relevant. This, in turn, can save brands money by improving conversions and driving increased ROI for every advertising dollar spent.
While DCO helps brands create targeted ads without compromising quality, it’s still important to monitor ad spending and measure campaign effectiveness.
Product-level DCO allows effective retargeting campaigns because Deep Learning can predict what product the user is interested in, e.g., abandoned carts or previous product views. For some e-commerce brands, the banner communication needs to be narrowed down from thousands of available products to just a few of the most relevant items. Creative content is also very important for campaign performance.
And because it works by automatically optimizing ad copy and graphics to reach the target audience, it helps brands avoid spamming users with irrelevant content, and allows them to stay in the minds of their potential customers.
With this strategy, brands can announce special events or promotions that can entice potential customers to make a purchase, or send personalized email messages to their mailing list.
How the DCO process works
The DCO process allows brands to test different combinations of creatives to determine which ads perform best. By testing images, titles, text variations, CTA buttons, and more, they can discover the most effective combination for their brand and audience. It is also possible to set triggers based on campaign goals, products, and game scores.
DCO technology can test advertising campaigns and make adjustments based on results so brands can create unlimited combinations of ads. Marketers need to understand what the possible combinations of the ad content are and monitor each creative's performance to ensure that the messaging matches the brand's voice and reputation, but once the DCO process is established, no manual input is needed.
The impact of DCO on ad campaigns
DCO targeted ads are more relevant, may increase conversion rates and may also provide an increased ROI for ad spending. And because the time required to create multiple creative iterations is reduced, this increases the efficiency of publishing.
A brand working with dynamic creatives knows its audience and therefore selects the most appropriate combination of creatives for a responsive feed, meaning the brand can optimize the ad to meet a particular customer's needs and interests.
Additionally, brands that need to respond quickly to changing conditions or avoid reputation damage will find dynamic ads a useful tool.
DCO can help marketers make better decisions about where to spend their ad dollars to deliver the right message at the right time, but ultimately, it is all about making data and creative work as partners.
The average user sees between 4,000 and 10,000 ads daily! Fact! So if a brand wants its campaign to get attention and speak to the right user, they need an ad with a tailored message delivered at the right time in the right context.
DCO has made advertising more captivating, and brands can easily adjust their commercials based on real-time data, such as audience interests, buying tendencies and overall sentiment. This new approach speaks volumes about how modern marketing has changed. Instead of being stuck in outdated practices, brands can now prepare more creative and relevant ads.
However, to get the most from this new technology, brands should seek the help of a trusted partner, such as RTB House who use Deep Learning (aka neural networks) to fuel the DCO mechanism and tailor ad messages more efficiently to maximize the value of each impression.