Dynamic Creative Optimization: What is DCO & How Does It Work?

If you’re looking to increase the volume, efficiency, and customization of your digital campaign’s display banners, your brand may consider utilizing dynamic creative optimization (DCO). Not only is DCO a streamlined tool that enhances a marketing team’s productivity—it's also a powerful creative serving and targeting method that can improve user engagement, when used properly.

When running a digital ad campaign, your team may feel limited by the number of live creatives the ad server can accommodate at once. Perhaps you’d prefer to run hundreds of different creative versions with custom copy, colors, and/or landing page URLs based on specific targeting criteria. While standard ads do not incorporate all of these features, DCO is an alternative rich media solution that can!

What is DCO?

Dynamic creative optimization, otherwise known as DCO, creates a more customized banner ad experience for your audience. DCO ads are especially useful when a brand needs to run multiple variations of different features, such as calls to action, copy, background colors, or products, within a single ad layout.

One of the more alluring elements that draws marketers to DCO is its intersection of creative variation and targeting capabilities. Different ad versions can be served to users by tapping into features such as their geo-location or their proximity to a particular location, a brand’s audience data segments, site content, or even the time of day. The result is a more personalized and relevant banner ad showcasing a brand’s message and imagery.

Many of us have had first-hand experience with DCO ads as consumers. You have likely been on the receiving end of display banners containing images of products you were previously browsing on a website. This type of ad can leverage cookie data from the advertiser’s website to then serve ads based on the product pages previously viewed within a set span of days.

Despite the rise of third-party cookies being blocked across popular internet browsers, digital marketers can still look to DCO as a reliable creative serving method for their campaigns. Not all dynamic creative targeting strategies rely on third-party cookies, so DCO campaigns can still target users with customized banners based on other aspects, such as first-party data or publisher data.

How Does DCO Work?

A main reason marketers incorporate DCO into their creative strategy is the ability to manage a very large volume of ads using a spreadsheet or feed paired with a creative template. The spreadsheet contains all the content that informs the banner output, such as image file paths, ad copy, landing page URLs, and targeting data.

Feed content may be populated manually through a spreadsheet or from an XML feed. Some feeds may contain several thousand rows of data, resulting in thousands of different ad variations. For those campaigns that require a higher level of creative differentiation due to more granular testing or targeting needs, DCO is the best option to manage and serve ad content.

A dynamic creative template works in tandem with the dynamic feed. The creative template is necessary to determine the layout and logistical restrictions that the copy and imagery adhere to in the ad. For instance, the template can designate the background image and headline as changeable, dynamic elements in the ad, but these elements will always remain in the same area within the banner. Though the template standardizes the overall layout of the creative, the feed allows for the customization that marketers look for when using DCO.

While the dynamic feed and creative template drive the look and content of the DCO ad, the dynamic strategy will ultimately determine when, where, and to whom the ads will be served. There are a few different strategies that can be used individually or layered together to inform creative decisioning.

For instance, you may opt to target creative versions by a user’s zip code for a geotargeting strategy, or target versions by publisher keywords for a contextual strategy. Regardless of the strategy you select, ensure that the same targeting is applied in the vendor’s ad server to avoid serving default creatives. Default creatives are a technical requirement by dynamic ad servers to prevent DCO creative from serving to a user outside of the targeting criteria. Default ads will also serve if the rich media loads improperly in a browser.

Further DCO Considerations

While dynamic creative optimization is a multi-faceted tool that can enhance the performance and efficiency of a digital marketing campaign, it is not a go-to solution for all branding initiatives. Campaigns limited in budget, resources, scale, or time are not ideal candidates for DCO.

Because it is a rich media solution, dynamic creative involves a higher ad serving cost. There may also be additional production costs to consider in order to build the template, feed, and strategy, and maintain the ads throughout the life of the campaign. An additional line item on the budget may include a team member or agency that is equipped with a dynamic ad product and knowledgeable in building and managing DCO campaigns.

Time is also a crucial factor when introducing and carrying out a dynamic strategy. It’s ill-advised to use DCO for shorter-run campaigns of 3 months or less because production and approval timelines for the dynamic ads themselves may take up to a month. Given the high cost of running and building a DCO campaign, paired with a relatively longer production turnaround, most cost- and time-conscious marketers prefer to use DCO ads for longer-run campaigns lasting more than 3 months.

Basis DSP accepts various partners’ third-party tags serving dynamic creative. Reach out to learn more about how you can strengthen your dynamic creative optimization strategy with Basis DSP's powerful programmatic offerings.