Dynamic creative optimization (DCO): Definition, examples, tips

What is dynamic creative optimization (DCO)?

DCO stands for dynamic creative optimization. In advertising, DCO technology rapidly builds multiple iterations of an ad using the same base creative, while tailoring parts of the ad based on audiences, context, and past performance. This helps the ad resonate with consumers.

Why is dynamic creative optimization important?

In today’s world, consumers can see thousands of ads a day. Therefore, it’s more important than ever for brands to engage customers with messaging and creative that resonates. DCO helps advertisers and agencies deliver more relevant, informative, and impactful ad experiences.

In addition, DCO helps advertisers improve scale and efficiency. Rather than creating multiple versions of the same ad for different locales and audiences, DCO does it for them.

Creating a DCO campaign

Each day, consumers engage with brands on numerous channels. Each touchpoint is an opportunity for brands to deepen their relationship with customers. A successful DCO strategy will seek to do exactly that by meeting customers where they are with relevant content.

When creating a DCO campaign, think about ways to connect with your audiences, with the right message, in the right context, at the right phase of their journey.
Here’s how to get started.

Define your scope

When planning your campaign, start by defining the scope. What are the main objectives? Start with well-defined end goals and key performance indicators (KPIs). It's important to identify what success looks like so your team knows what they’re working toward and you know what KPIs to evaluate mid- and post- campaign.

Align with your partners

You’ll likely work with DCO teams, creative teams, publishers, and/or demand-side platforms (DSPs). In addition, media and analytics teams need to provide analysis and media strategy to the creative team. Align the ownership and strategy across all audiences, messages, and KPIs; insight-driven creative works best when all parties collaborate and are involved in the planning process.

Have a planning kick-off call to brainstorm and define the strategy, and schedule regular check-ins to review performance and discuss strategic improvements or additions. In DCO campaigns, the insights, media, and creative fit together like puzzle pieces, so it’s key that everyone on the team understands the full scope of the strategy to work together toward the same goals.

Understand your audience

Who is your audience, and how are you planning to adapt your ad to be relevant? It's important to understand what types of audiences are available and relevant for your campaign, so that you can properly design an audience engagement strategy and decide how to customize creative messaging for each audience. Also, think about which roles each ad tech stakeholder will play.

Build your template

When building a creative template for DCO, consider what elements of the ad need to vary, and take the extra effort during creative production to build a flexible template in order to avoid costly production adjustments mid-flight. How will dynamic elements such as calls to action (CTAs) or product names need to align in the creative? Will dynamic imagery be presented at different aspect ratios, or will they always fit to the same dimensions? Does your template need to accommodate dynamic layouts, typography, animation, or color schemes?

Examine your performance

As your campaign runs, examine your performance at regular intervals and optimize your strategy moving forward. Is a certain CTA performing better than another? Is one type of image helping to drive more engagement? Does a specific creative really resonate with one audience and perform poorly with another?

As you hone in on the creative elements that are helping to drive performance, you can eliminate low-performing elements and introduce new test elements. Continuous testing and learning helps unlock DCO’s potential to help improve your customer connection across every campaign.

Trends in DCO and advertising

Though historically advertisers have used DCO primarily as a direct-response tool—for instance, to remarket to retail audiences with a product they’ve previously viewed—savvy advertisers are increasingly using DCO to employ relevant messaging across the marketing funnel. Branding and awareness tactics can benefit from insight-driven creative—for instance, by using shopping or streaming signals to provide different imagery or product features. A sophisticated DCO strategy considers how creative can adapt dynamically at every touchpoint with audiences.

Additionally, advertisers are looking to use DCO increasingly across multiple channels, not just display advertising. Dynamic video, for instance, is set to become more popular, because the in-stream video and streaming TV ad channels it runs on continue to grow as a proportion of advertising budgets.

Examples of dynamic creative optimization

Advertisers can use DCO for campaign types that include—but are not limited to— campaigns that adapt to audiences’ geographic locations, campaigns that vary by audiences’ interests, contextual campaigns that are dynamically tailored to page content, and product-based campaigns that take into account other products your audience has viewed.

Let’s look more closely at how DCO can be applied to specific verticals:

Automotive

Automotive

Automotive advertisers are some of the most sophisticated when it comes to employing DCO strategies. Automakers tend to use audience signals from insights and media partners in order to inform which car model to promote, and can sometimes highlight different features or accolades depending on the audiences (for instance, highlighting SUVs and their safety accolades to family-minded audiences).

Then, for the auto advertising industry categories of tier 2 (regional) and tier 3 (dealership) advertisers, it’s common to use geographic and time-based signals to show the right offers and/or dealerships to relevant audiences.

Learn more about automotive marketing.

Consumer packaged goods

Consumer packaged goods

Consumer packaged goods (CPG) companies often offer a wide range of products that can vary by geography, making this vertical ideal for DCO campaigns that adapt to location.

In addition, CPG companies often create branded digital content, such as tips or recipes to keep their audiences engaged. Advertisers can use this content in episodic creative that rotates through "tip of the week" or "recipe of the month," for example.

Lastly, CPG products are often closely associated with demographics, life events, and lifestyles, so these advertisers benefit from audience insights that can inform which products, imagery, or messaging to use for a campaign.

Financial Services

Financial services

Within the finance sector, advertisers can use DCO to automatically create multiple ad versions for different audiences, helping to reduce production time and maximize conversions. For instance, campaign creative promoting a new credit card could dynamically adapt to audiences’ interests and usage, displaying travel-, home-, or entertainment-related messaging depending on what they’re likely to use the credit card for. It could also feature different benefits, such as loyalty points.

DCO is a particularly effective tool for financial services providers and retail banks, as it can adapt in real time to reflect continually fluctuating offers, rates, and promotions, allowing campaigns to instantly respond to marketing changes. It also allows financial services with a large footprint of local agents, such as insurers, to run localized campaigns.

Learn more about financial services advertising.

DCO is a key tool in the modern marketer’s tool set, because it helps improve creative relevance at scale and foster a culture of experimentation. When your technology tool set reduces friction and makes it easy to message customers across the customer journey while constantly learning and optimizing, you have the freedom to get creative about reaching your audiences with insights and messaging that inspires. Then, you can really make a memorable connection with your customers.

Learn more about how to use DCO with Sizmek Ad Suite.