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The difference between DCO, dynamic creative, and personalized ads

March 10, 2017

When it comes to display ads, terms like "DCO", "dynamic", and "personalized" can mean different things. This post explains the different technologies and strategies advertisers can use.

Note: the exact definitions of these terms used in this post are very much a matter of opinion. Hopefully this blog post will help make sense out of the many display ad technologies available, even if there is some inconsistency in how they are referred to across the ad industry.

DCO (Dynamic Creative Optimization)

DCO performs multivariate tests and algorithmically determines the most effective ads or creative elements.

For example, you might want to test button color. A DCO platform would help you set which colors to test (e.g., red, yellow, orange, blue), and then the platform would track KPIs (clicks, conversions, etc) to determine which color tends to perform best.

Testing button color with Dynamic Creative Optimization (DCO)

Dynamic Creative Optimization technology could help you tell which button color performs best.

However, it can get a lot more complex than that. Let's stick with our button color test, but add two new dimensions: gender and age. If we split age into 10-year buckets between 20 and 69, we get 5 age buckets multiplied by two genders multiplied by four button colors (5 x 2 x 4). All of a sudden we’re testing 40 different permutations!

Dynamic Creative Optimization (DCO) diagram

Wow, the relationships between just three variables look pretty complex! Good thing our DCO platform is handling this!

Running 40 campaigns simultaneously as part of a single test would be cumbersome to manage manually. This is where DCO can help. DCO streamlines the process of defining and executing the test, and then uncovering actionable results and takeaways. DCO technology goes a lot further than this, but we'll save that for another blog post.

Dynamic / programmatic creative

"Dynamic creative" and "programmatic creative" are fairly general terms and are often used in ways that overlap with specific technologies like DCO or personalized remarketing.

Here are a few examples of general-purpose dynamic / programmatic creative strategies:

Decision trees

A decision tree uses IF/THEN rules to decide which creative or message to show to a viewer. The rules might have to do with the viewer (age, income, gender) or the context of the ad impression (geo-location, weather, time of day). It is up to the advertiser to decide ahead of time which factors to consider and how the decision tree is organized.

Decision tree diagram

Real-time or streaming data

Certain dynamic creatives have the ability to pull in data or content in real time or near real time. Caching (e.g., hourly) can provide near-real-time data, whereas true real-time data can be pulled directly from an API into the ad creative (e.g., travel booking API, weather data, social media feeds).

Sample dynamic travel ad showing real-time air fares and booking data

In the turblent world of airfares, ads need real-time booking and fare data in order to display custom-tailored offers.

Sequential messaging

This refers to showing a viewer several messages in a pre-defined sequence. For example, the first 10 ad impressions might be a high-level brand message, then the next 10 ad impressions might be more specific features/benefits messaging, and then the final 10 ad impressions might contain a specific call-to-action to get the viewer (who has now been primed with a branded story arc) to actually convert.

Sequential messaging example - 1st message

First message: builds brand awareness for a new luxury car model.

Sequential messaging example - 2nd message

Second message: highlights specific features and benefits.

Sequential messaging example - 3rd message

Final message: converts audience interest and excitement into an in-person test drive.

Personalized display ads

In this blog post, "personalized" refers to the assumption that the dynamic creative platform "knows" something about the individual viewer. Three approaches are described below, and see our blog post Four types of signals that can personalize your dynamic ads (beyond dynamic retargeting)" for additional info on the topic of personalization.

Personalized remarketing

For example, the dynamic remarketing platform might have a short list of product SKUs the viewer looked at on an advertiser’s website. In this case, the creative can be personalized with those same products, with products from the same category, or with recommended products based on a recommendation engine.

Sample dynamic remarketing display ad

An example of a dynamic remarketing ad showing products the customer viewed previosuly.

First party data and addressable advertising

Advertisers can now turn their CRM contact data (names, phone numbers, emails, logins, etc) into targetable online audiences using various means like cookie matching, device matching, household IP address, and app installs. This process is often called "first party data on-boarding."

In the same way that advertisers personalize and segment their direct mail and direct email blasts, display ads can also be personalized within on-boarded audiences.

Sample display ad using first party data

An example of an addressable ad. In this case the viewer's CRM profile might have shown that they bought 3T girls' clothes in the last 9-12 months, meaning that they probably now need 4T clothes.

Contextual personalization

In certain cases, it's possible to gain insight into the individual attributes of a viewer by using the context in which the ad is viewed. This is especially useful for prospecting campaigns.

One hypothetical case is matching travel offers against web pages containing travel articles. It's reasonable to assume that someone viewing the page is interested in traveling to Cabo San Lucas. A dynamic ad can then look up current Cabo San Lucas travel offers and thus "personalize" the ad content.

Sample dynamic display ad showing contextual travel offers

A contextually personalized ad can dynamically feature content relevant to the page topic.

Another common use-case is geo-personalization, in which ads are personalized according to where a person is physically located when viewing the ad. Geo-personalization is especially relevant to local marketers.

In conclusion...

This blog post is by no means a complete list of creative technology and industry jargon. But it should help differentiate between what different display ad technologies do and when they might add value for an advertiser.

In addition, the technologies and strategies described here are not mutually exclusive and can often be combined. For example, personalized travel retargeting with real-time pricing data can be a powerful combination as described in this blog post.

Contact us to learn more about the Canned Banners Dynamic Ads platform.