What is Dynamic Creative Optimization?

Lennard Kooy

By Lennard Kooy | Last update: July 21, 2020 | DCOMarketing, Dynamic Advertising

Ever wondered what Dynamic Creative Optimization, or in short DCO, actually means? In this blog post we’ll tell you what DCO in general is, and how it applies to video advertising as well. If all of those words (Dynamic, Creative and Optimization) never came across your radar, you can probably stop reading here. If they did, eat your heart out.

To waste as little of your time as possible, we won’t give you a full run through of all the current market trends within the marketing landscape. However, for the sake of this article, and for the sake of explaining why DCO is relevant, we do need to mention the two interesting trends that are relevant, namely:

The major increase of online video consumption (Figure 1)

The demand for personalized and relevant content for consumers (Figure 2)

Average time spent with digital video per day

Figure 1 – Average time spent with digital video per day 

Demand for personalized and relevant content for consumers

Figure 2 – Demand for personalized and relevant content for consumers

Average time spent with digital video per day

Figure 1 – Average time spent with digital video per day 

Average time spent with digital video per day

Figure 2 – Demand for personalized and relevant content for consumers

We do believe that leveraging the first trend, the major increase of online video consumption, is pretty straightforward: simply create video ads and advertise them on the platforms where the (major) video consumption takes place.

However, leveraging the second trend – the demand for personalized and relevant content for consumers is not that easy. There are however a few different ways to embrace that trend.

Dynamic Advertising

Professional advertisers have long got accustomed to the high adaptability that banner advertising (text + images) currently offers them. The rise of dynamic advertising has allowed advertisers to include logic in their ads that change certain elements of the ad (e.g. a “dynamic” placeholder in the form of a product or a text), based on characteristics of the viewer of the ad (e.g. a product they viewed or the stage of the funnel they are in). When set up correctly, the ad in combination with the distribution channel (e.g. Google Ads or Facebook) does this automatically.

Dynamic Creative Optimization (and its limitations)

This concept is often used for Dynamic retargeting – whenever someone looked at a product on a website and finds it back later included in an ad, on a different website or medium.

For example, you want to try 10 different background images in combination with 30 different CTAs. This results in a total of 300 combinations, which would be hard to produce manually. Instead of producing manually, programmatic creative tools allow for the automated production of all possible variations, by pulling the assets from a feed.

The DSP (Demand Side Platform) then determines which combination to serve to which audience, not based on a visited URL, but based on a target audience and historical performance data of previous combinations on that audience.

In advertising lingo, this is referred to as Dynamic Creative Optimization, abbreviated to DCO.

This visual illustrates what DCO is

To understand this concept a bit better, it’s good to know that ‘banners’ have long been more than just a simple image. They’re the equivalent of a “mini-website” delivered in an HTML5 package (zip) that contains multiple files, including scripts (logic), HTML animations and points to external sources (e.g. a product feed). It can also include a video file instead of a static image.

This combined with the concept of Dynamic Retargeting should make DCO in video pretty simple, right? Well, unfortunately, only to a (very) limited extent.

The problem with native video

Whenever a video is used in a banner, this concept can and does apply. You have a video background and when properly set up, a dynamic banner can change certain elements like text, a price or a product that are laid over the background video. It could hypothetically even change the entire background video.

Sounds great, doesn’t it?

The problem arises in the fact that almost all major (social) advertising platforms don’t allow dynamic video banners on their platform. To name a few: Facebook/Instagram, YouTube, LinkedIn, Snapchat… The only file they allow is a rendered out MP4.

To compound this problem, apart from these major social channels, much of the rest of the video consumption is done in a video player on all kinds of websites. You can run banners around that player, but to really capture the attention of the viewer, you want to advertise in that player. Again, banners won’t work there. The standard format for those ads is called a VAST-file, which allows for little more customization than the MP4-file required by the major social platforms (a VAST-file is basically a link to a URL with an MP4 on it with wrapped in some tracking logic).

DCO in native video

But with video quickly taking over banners and text as the dominant advertising format, you do want to make sure you offer the right message to your audience and increase the effectiveness of your video ads, right?

So, let me explain what is possible.

To do this, let us quickly circle back to the problems a dynamic banner solved:

  1. The creation of a multitude of versions of your ad
  2. The setup and delivery logic of those ads

The first problem can be solved by using the so-called Creative Management Platforms (CMP) that focus on native video and have the capability to render large amounts of versions of your ad with the click of a button. Like the one we offer at Storyteq.

As with banners, you set up the logic for the variety of versions of your ad in what is called a creative template. Think of a creative template as an ad where elements are set to be dynamic. Unlike banners, you quickly create (render) all the versions you want to test beforehand (by uploading an Excel sheet or connecting a feed). With a Creative Management Platform (we like to call ours a “Creative Automation Platform“), this would take about 20 minutes to complete for the example mentioned earlier (10 background x 30 CTAs), from uploading the Excel file to the completion of all 300 versions. 

Now the second problem arises. How do you get all these versions into your advertising channels and distributed?

To tackle that problem, you need to have integrations with the most commonly used advertising channels, such as Facebook/Instagram, YouTube, Google Ads and Google DV360 to smooth out these processes. You still need to set up your campaign as you would with a banner, but instead of uploading one dynamic creative, you upload a ton of different versions into a specific ad set / ad group and let the distribution channels do the optimization for you. 

Want more control? You can always set-up multiple target audiences (ad sets / ad groups) manually or by using power features like uploading excels (for Facebook) or Structured Data Files (SDFs) for Google. We’ve also created some guides for that to get you underway.

Summary

To sum up: native video doesn’t allow Dynamic Creative Optimization as most advertisers are accustomed to in banners. However, with the right tools, you can still achieve similar results with native video.
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