For too long, digital advertising has revolved around simply tracking users and building very primitive connections. If brands want to create meaningful relationships with online audiences, that has to change. It’s time to start maximizing relevance with ads that match real-time interests; not just demographics. With Dynamic Creative Optimization (DCO), marketers can achieve greater traction and impact by utilizing the power of the right content and context.
When it starts to rain in London, stores quickly move product stands with umbrellas outside, while sun creams are put back into the shop. The clever shop owner responds to the weather – ideally very quickly. So, why not online too? If it rains in London, digital ads from a fashion company can advertise the fashionable raincoats available from its online shop. If the sun shines, it is T-shirts and shorts. The relevance depends on the context of the user for the correct level of involvement, to increase the desired results.
Companies with a network of stores can use dynamic banner ads, for example, to display the branch addresses or location-specific offers. In other (less pandemic-influenced) times, the travel industry is an often-cited example of using dynamic ads well. Depending on the geo-location of the user, multiple elements change and / or influence the ad, such as nearby airports and travel destinations in which the user is interested, prices, weather forecasts at the destinations and even route connections.
In these current times, traveling is a difficult topic. However, the gradual easing, depending on the region, allows a variety of different options. Where can you now go? Are tourists allowed on the beach? Are outdoor activities allowed? What about overnight stays? Depending on the political climate, different target groups with different offers can and must be picked up. A blanket banner can quickly cause frustration for users who do not yet enjoy the same freedom as citizens from other regions, thus losing some users’ connection with a brand.
One of the big misunderstandings around digital advertising is the widespread view that everyone hates it. This certainly does not apply to all types of advertising, only to completely irrelevant and annoying formats. Admittedly, there are many bad examples; however, there are also good ones where data and personalization are used sensibly. This can be done as part of branding campaigns, but also with performance campaigns. The best examples of dynamic ad creation are ultimately invisible and are hardly noticed by consumers. Personalization should make advertisers and consumers happier because, in the end, a large part of the internet is financed by advertising and the quality of the advertising also decides to what extent this model will be maintained in the long term.
On the other hand, the overly conspicuous use of data in dynamic ads can lead to a certain degree of annoyance. Fewer "flashy" banners and well-integrated formats should be the norm and the added value of personalization should only come to the fore unobtrusively. Even simple retargeting approaches can be increasingly replaced by hybrid approaches, and large advertisers in particular can increasingly bring together branding and performance in communication. Such a strategy therefore not only guides the budget through the funnel, but also synchronizes communication using campaigns, and additionally website and CRM data.
Depending on the campaign goals, conventional ads can be just as successful as dynamic ones on a certain level, but marketers also have to quantify what “success” means. Based on the personalized and thus more relevant approach, a significant increase in the click rate for dynamic banners can be seen when compared to the click rates of conventional standard ads. More importantly, the cost per acquisition becomes more favorable and costs for like-for-like banner production can be reduced by up to 80 percent by using DCO. If we take all of that and also mention that creativity is not even degraded, but as engaging as it needs to be, and the case for using dynamic creative becomes compelling.
The more dynamic banner optimization is automated in the future, the more opportunities there will be. The focus of development here is on auto optimization and multivariant testing, which is all carried out by the ad server. In an ideal case, advertisers will only specify assets, formats, and campaign strategy with the ad server using them to create the banners and optimizing them independently. In order to make this work in a way where formats-for-purpose can be built to not just connect to the user, but do this through the right device with the right level of frequency, a high level of development is demanded. Add on complexities in asset like video and the notion of true personalization becomes difficult to imagine, yet the engine and capabilities are there now are scaling as rapidly as the creatives themselves.
Creating basic requirements
Aside from the technical cornerstones of dynamic ads, which are becoming increasingly standardized, fundamental considerations must be made: what types of customers do I have and what brand and product communication is relevant for them? In which context? Which data and signals are used to classify these audience types? Where can these signals be found? How is this applicable to my own data? In partnership and/or third-party pools?
The most impressive thing about DCO is the agility of the systems. Start, learn, adapt, and start again. These iterations – supported by artificial intelligence and analytics – help and lead step-by-step to continuous optimization, away from a pure human “campaign thinking”. It means starting small and gradually learning, so no one is afraid of a monumental change.
It is important marketers to remain flexible and work their way forward little by little, with every advertiser placing at a different point on the learning curve. The extensive use of data, not only to optimize media purchasing, but also the communication itself, often has to be intensified and should not be neglected. And yes, of course, there are silos like Customer Relationship Management data, purchasing, and creativity that have to be thought of holistically.
The corresponding systems are largely available. Segmented target groups have long been available in the Data Management Platform (DMP) and, for example, CRM data could be used to address younger target groups differently to older ones, slowly these disciplines are starting to be looked at in a joined-up approach. Many advertisers and agencies are already well positioned and ready to make the most of this.
Phil Acton, Country Manager, UK & Benelux, Adform