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What Is Dynamic Creative Optimization?

Angie Tran

Content Marketing Manager @ AdRoll

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In an e-commerce world that continually evolves, brands are learning to leverage technologies to engage new markets and speak to new consumers. To stay competitive, marketers need to tell stories and deliver experiences that reflect the changing desires of consumers. That means personalization — creating content and creative tailored to each potential customer. Without customization, even brands with excellent reach across digital marketing channels will struggle to connect with consumers and remain relevant.

Dynamic creative optimization offers a powerful tool for constructing a more comprehensive and immersive digital environment for audiences. Powered by machine learning technology, dynamic creative optimization serves personalized ad content that's selected according to an individual's shopping history and online behavior. Here's how it works.

What Is Dynamic Creative Optimization?

Dynamic creative optimization, or DCO, is a type of ad-serving system that chooses personalized ad content and creative elements based on each shopper's data. Powered by machine learning technology, DCO incorporates consumer data such as online shopping history, product views, geolocation, age, and gender. Through enhanced personalization and customized ad environments, DCO can improve consumer engagement and boost high-value metrics like click-through and conversion rates. DCO-generated ads tend to be more effective than traditional static ads. The result is a double benefit: better sales performance and increased consumer trust and recall of your brand.

Customer data fuels the machine learning technology that performs DCO to offer ads that reflect the values and interests of your audience. 52% of consumers say that they'd switch brands if they were served with ads that didn't cater to their needs. That's why DCO is so valuable. It decides in real-time which content and creative assets will most effectively speak to the user and spur buying interest. If you've worked hard to build your target audience and understand what drives their decisions, you'll be ready to take advantage of DCO. 

Typically, DCO pulls user data from a data management platform (DMP) that's integrated with an ad server. Geographic and IP data can also help shape ad-serving decisions. Over time, machine learning technology adapts its ad generation to user behavior and helps brands isolate valuable audience segments and evaluate ad performance.

For additional reading around data-driven marketing: 

What Types of Ad Campaigns Are Suited to Dynamic Creative Optimization?

The ability to customize content according to specific user data makes dynamic creative optimization highly adaptable across various marketing campaigns. 

  • Product campaigns: Retailers and e-commerce brands can utilize DCO to improve returns on ad spend (ROAS). Personalization technology will target users who have demonstrated interest in a product and serve ads that point to similar products.
  • Local ad campaigns: DCO can engage users with local promotions, sales events, and other regional initiatives that a brand wants to advertise. It’ll show ads that target consumers with products and information relevant to their geographical area, and those that promote local stores.
  • Customer journey campaigns: Using DCO, brands can effectively create campaigns that funnel consumers toward the point of purchase. Ads can be tailored to suit the user experience and aid with purchasing decisions as the consumer moves through each step of the buying process.
  • Demographic campaigns: Brands can use demographic information to personalize ad campaigns toward audience segments. DCO will effectively customize ads based on traits like age, gender, marital status, and other relevant attributes.
  • Behavioral campaigns: DCO is a powerful tool for targeting ads based on consumer interest. The technology will personalize ads to display certain product categories, exact items, or other hyper-relevant content.

Build your customer journey map:

Dynamic Creative Optimization Best Practices

Here are the basics of how to use DCO to improve engagement and drive sales:

  • Begin with your in-house data: DCO is a powerful tool for retargeting users based on their browsing behavior when the ad is served. However, it's most effective to begin DCO campaigns with the demographic, behavioral, and geographic traits you've gathered through your lead generation activities. The more targeted your DCO practice, the better the payoffs will be since personalized ads help to move consumers through the funnel toward purchase. 
  • Write compelling CTAs, descriptions, and headlines: Convey the essential information by keeping copy elements like headlines and descriptions as concise and engaging as possible. All of the usual rules apply: frontload your copy with critical information and develop several call-to-action (CTA) options so you can test for the optimal approach. 
  • Test and monitor: In some ways, DCO replaces traditional A/B testing. It uses machine learning technology to alter the ad creative based on consumer response. However, you should still track the most effective elements of your DCO-powered campaigns so you can continue to optimize the content and creative.
  • Stick to your message: Dynamic creative optimization provides opportunities to serve consumers with a wide variety of media and content. However, it’s critical that your messaging reflects the brand values that you aim to convey. Don't alienate or confuse consumers with ads that stray wildly from your brand's voice and style.

Learn how to write stand-out CTAs:

An Example of Dynamic Creative Optimization 

DCO proves useful across a range of industries and brand types. Let's look at an automotive dealership example. The following items demonstrate how to approach consumers with personalized, dynamic ad experiences that transform leads into sales: 

  • A local car dealership could use DCO in its ad campaigns to target consumers with a high likelihood of converting. The campaign would target a specific geographic area surrounding the business location. The ad messaging may also incorporate seasonal trends, promoting different vehicles during certain times of the year.
  • Using behavioral data, DCO technology could display ads showcasing the rugged features of an SUV to a consumer who searched for “off-roading” or “driving in cold and snowy weather.”
  • The dealership could also create a data-gathering campaign to track which product benefits appeal most to the viewers. For instance, one customer may prioritize fuel-efficiency, while another values safety above all else. The campaign's results would enable the brand to refine its creative approach to deliver more relevant and useful information.  

An Essential Tool for Your Marketing Arsenal 

Though dynamic creative optimization may seem complicated, it's an intuitive tool for marketers that want to automate campaigns and improve ROAS. DCO does most of the personalization work for you. It can strengthen consumer perceptions of your brand, attract shoppers who are most likely to be interested in your products, and usher viewers toward a purchasing decision. Its ability to refine and strengthen your marketing strategy in the short- and long-term, makes DCO an essential tool for brands to remain relevant and fresh in the eyes of consumers.

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