Apr 8, 2021

What is DCO?


What is DCO?

Dynamic creative optimization (DCO) is a form of ad display technology that enables advertisers to optimize ads based on real-time viewer data. DCO is often used for product retargeting ads. It relies on machine learning to look at different ad asset combinations to pick the best headlines and CTAs for your viewers. Dynamic creative optimization looks at targeting variables such as device and location in real-time and runs multivariate testing to give your ads the best chance of reaching your customers.


In this article, we’ll cover everything you need to know about dynamic creative optimization, including how it works, how it’s different from a creative management platform (CMP), and how you can set up a campaign.


Why is dynamic creative optimization needed?


Dynamic creative optimization is needed to provide personalized and relevant content for your viewers. It ensures that your clients receive a unique experience on your website with the ads that will be most appealing to them.


How does DCO work?

  1. DCO works by first receiving information from both your CMP, which manages creative content such as ad copy, and your data management platform (DMP), which oversees data feeds.
  2. Dynamic creative optimization ads then pull data from a number of sources, such as the customer’s IP address and browsing history, which are managed through a DMP. The DMP works with the DCO server to provide real-time information which allows the server to create intelligent ads.
  3. DCO also works with your CMP to use different types of graphics and copy to create the ad. This integration between the two platforms decides which assets to include in the ad, such as whether the ad should be an image or video. Then, these components are arranged in the most appealing way for each visitor.


Levels of dynamic creative optimization


There are two levels of dynamic creative optimization:

  • Dynamic: Dynamic DCO refers to pre-made ad variants that contain specific data elements which are chosen and controlled by an algorithm. Dynamic DCO is simple to set up, doesn’t require advanced coding knowledge, and allows for engaging media ads.
  • Static: Static DCO refers to static ad units which utilize an algorithm to pick which creative assets are shown to the customer. Static DCO is still tailored for the viewer but relies on static templates which require a great deal of coding. Static DCO is less flexible on the number of ad variations which can be created for users.


What is the difference between DCO and CMP?


A creative management platform is a cloud-based platform that can produce the dynamic designs needed for a DCO campaign. A CMP can pre-build ads for different viewers as well as measure the ad performance.


DCO refers to the real-time technology that enables these ads to gather different creative assets to create content that’s both tailored and dynamic.


Why use CMP for DCO?


You should use CMP for DCO since CMP provides the dynamic capabilities needed for up-to-date content. DCOs provide the real-time technology while CMPs enable the creative, no heavy pre-programming or data feed integrations required.


How is DCO different from dynamic creative?


Dynamic creative refers to how the creative ad components are assembled based on the viewer’s needs and preferences. Dynamic creative optimization is more advanced, relying on real-time data feeds, testing, and historical data to optimize ad performance.


Real world examples of dynamic creative optimization

Real world examples of dynamic creative optimization include:

  • Behavioral targeting: Targeting users based on their funnel intent.
  • Demographic targeting: Targeting users with characteristics similar to your existing customer base.
  • Product-based targeting: Targeting users who visit particular product pages but don’t purchase anything. These campaigns can focus on retargeting tactics like abandoned cart promotions and upsells.


Benefits of DCO


Benefits of DCO include:

  • Quick learning: DCOs can quickly learn valuable information from each campaign. For example, they’ll understand which CTA messaging works best for a particular subset.
  • Personalized ads: Since the ads can change on a per-viewer basis, a large portion of the ad elements can be personalized for the customer.
  • Funnel targeting: DCOs are able to customize ads based on customer acquisition. For example, lower-funnel goals like retargeting can be an ad focus.


How to set up DCO campaigns


Here are the necessary steps for setting up a DCO campaign:


Make personas


Create detailed buyer personas for each campaign.


Research where buyers spend the most time online


Knowing where your viewers shop is crucial information for DCO. Your website analytics can provide you with this information.


Focus on geography


Geographic targeting can help you maximize your reach by segmenting your audience according to the top performing markets.


Personalize messaging


Create copy that appeals to each step of the buyer journey. You can make several versions of ad copy and test them with the DCO to see which is most successful.


Connect with data management platform


Connect your DCO with your DMP to ensure that you have a full understanding of your customer with the most accurate data available.


Make a decision matrix


A decision matrix can help you figure out which ad is presented to your customer segment. Your DCO will likely prompt you to set up a decision matrix when you set up your campaign.


Future of dynamic creative optimization and advertising


Dynamic creative optimization can bolster your ad capabilities and ensure that you’re reaching your goal clientele. See how [24]7 Target™ can help you create dynamic ads with the power of big data across multiple devices.