What is dynamic creative optimisation (DCO) and how does it work?

Have you heard the term dynamic creative optimisation (also known as DCO) but not sure how it can help? We explain how it works and the kind of results you can expect.

Marketers know that the more tailored their messaging is to their target audience, the more likely it is to be noticed and acted on. However, traditionally advertisers have been stuck with creating messaging on a one-size-fits-all basis, thanks to the limitations of media such as print ads, TV ads, billboards and flyers, as well as creative resource and eternal creative costs.

So when dynamic creative optimisation (DCO) first appeared around 10 years ago, it looked like things would change dramatically. But after the initial excitement wore off, the implementation and delivery of DCO failed to match expectations, and it hasn’t take off as expected… until now.

Find out why DCO is finally being adopted more widely, and what kind of results it can deliver.

What is dynamic creative optimisation (DCO)?

DCO is a type of programmatic advertising that enables advertisers to tailor and optimise the performance of their ad creative using real-time technology.

In DCO, agencies assemble a selection of ad components, such as backgrounds, main images, text, value propositions, calls to action etc on a digital asset management system. The creative can include video, animation, native components, and interactive elements. Then when an ad is served, it is compiled in real time with the relevant elements for the user who will see it.

The DCO process includes creative development, identification of test variables, definition of the optimisation objective, and method of optimisation. Test variables represent the elements of the ad creative that are varied in the multivariate testing framework. These usually include graphical elements, ad copy, colours, and click-through actions.

The objective of the optimisation can relate to any part of the customer lifecycle, including initial engagement, a user interaction (such as a click or hover) or KPI (key performance indicator) such as a registration, trial or purchase.

What’s the difference between dynamic and static creative?

Most campaign creatives are optimised statically. This means that a few different ad creatives might be developed for a campaign. These are then tested using a split sample to find the creative that performs best, and this creative is rolled out.

The problem with this process is that it overlooks many important factors that play a big part in the performance of creative. These include the time of day, day of the week, season, weather, location etc.

With dynamically optimised creative, thousands of ad components can be developed for a campaign, and can be served based on any number of factors, including the time of day, day of the week, season, weather, location, browser behaviour, etc. As an example, if it is raining in a particular city, you can choose to serve ads for umbrellas that day. And if it’s sunny, you can serve ads for sun shades.

This means that your ads are more accurately optimised, more accurate and are much more likely to deliver a superior performance.

The Crimtan platform has the functionality to plug into any number of APIs to ensure dynamic creative is served correctly and most relevant.  The platform can also handle any number of functions for testing such the rotation frequency based on the number of creative variations, impressions served or sequential.

How is DCO used?

In the early years, DCO was mainly used by the retail and travel industries to retarget high-value customers. With a huge number of possible ad permutations for retail and travel (thousands of SKUs or origination or destination combinations), it made sense that these verticals were the first to embrace the benefits of DCO.

But today, advertisers are beginning to understand how DCO can be powerfully used for more than retargeting for campaigns; it can work for every vertical, at every stage of the customer lifecycle.

So while advertisers may have used DCO campaigns deeper within the lifecycle (for example, retargeting and loyalty programs), they’re now successfully applying them earlier on in the lifecycle (the top of funnel) for prospecting and awareness campaigns.

And they need to. Today consumers are engaging with brands across multiple devices and digital channels, and they expect a personalized experience whenever they access their content. So if they’ve just bought a product or service from a company, they don’t want to be served an ad for the same or similar the next time they pick up their phone. And ads for sun shades on grey, wet days are unlikely to resonate.

As a result, ad blocking has become more popular over the past few years. By the end of 2019, 763 million people were using ad blockers on a mobile or desktop device. And 47% of people blocking ads said they did so because they found the ads annoying or irrelevant.

DCO ensures that advertisers are able to serve ads that are relevant and timely. Even if they know little about a user, DCO can algorithmically valuate all possible ad permutations and optimise creative elements to deliver the best possible performance, based on the advertiser’s objectives. As long as you have granular audience data you benefit from DCO.

How DCO speeds up your learning – and results

Another important benefit of DCO is the ability to run multiple campaigns concurrently. This means that the scope for gathering valuable insights is enormous. Marketers can more easily and precisely assess what works and for whom. This in turn gives a campaign strategic advantages, and generates faster and more valuable feedback.

The powerful combination of reach, scale, personalisation, speed and detail of insights makes DCO a no-brainer for advertisers today.

In short, DCO allows advertisers to deliver relevant, engaging and insight-based ad experiences, and in turn drive better engagement and performance.

An example of a successful DCO campaign

So what can a DCO campaign look like in practice? And what kind of results can it deliver? One example of successfully implemented DCO is our pre-pandemic campaign for the department of culture and tourism Abu Dhabi (DTC).

The DTC briefed us to create a campaign to increase awareness of Abu Dhabi as a tourism destination in the UK and Germany. Our challenge was to create ads that successfully delivered relevant key messages to busy and over-exposed audiences in Dusseldorf, Munich, Berlin, Frankfurt, Manchester and London, using DCO.

We built over 5,400 ad creatives across six audience segments, tailoring each ad’s message to DTC’s core audience using dynamic audience targeting.

One of the biggest attractions of Abu Dhabi to residents of our six target cities was the weather. So we highlighted the differences in weather in our ads, using a weather API that showed a live weather report of Abu Dhabi:

The campaign proved the effectiveness of DCO. The CTR for our ads beat the benchmark by over 300% in Germany, and by over 400% in the UK.

But that wasn’t the only remarkable result. Consumers also booked trips that were more than 34% longer compared to the regular destination communication, and spent over 35% more on hotel stays.

Our ads also had a halo effect on the number of searches for holidays and flights to Abu Dhabi. The campaign ran for four weeks, and generated an incremental 7,000 hotel searches and 6,600 flight searches.

This is just one example of the impact DCO can have, even on over-exposed audiences, and the kind of results advertisers can expect with a cleverly planned and implemented DCO campaign. We’d love you help you reap the benefits of DCO with a campaign that delivers on performance too.

How can DCO transform your results? Get in touch and find out how we can help.