Demystifying DCO




According to Forbes, 94% of senior-marketing executives believe that delivering personalized ads is extremely important to reach and connect with customers today. A “one size fits all” creative strategy does not make the cut anymore as users today are exposed to more ads than ever and it is becoming difficult by the day to break through the ad clutter. With increased focus on ad relevance and personalization, more marketers are turning towards Dynamic Creative Optimization.

Before understanding the benefits and how it works, lets first understand what exactly is Dynamic Creative Optimization(DCO)?

DCO is an ad technology that combines several dynamic ad elements in real time to create personalized ads based on the audience being targeted. An ad template with elements - images, products, titles, descriptions, CTAs etc. is used to create thousands of ad copies optimized and personalized to drive higher engagement from audience segment viewing the ad.

In simpler terms think of DCO like the brain of a shoe salesman named John who lives and works in a small city where he knows most people. After numerous interactions and selling shoes to people of the city for last 5 years he’s gathered minute details about them like the type of shoe they generally prefer, color he/she buys the most, shoe size, etc. As he shares good rapport with most people in the city, he is aware of their vacation plans too like who’s going on a beach vacation and who’s heading to the mountains. This empowers him to show and recommend the most relevant shoes when a customer visits the store for their holiday shoe shopping.

His colleagues and his boss call him “Superstar John” as he’s been selling shoes like hot cakes and the store’s repeat rate has gone up tremendously since he joined. Most customers tend to ask for him every time they visit the store.

Let’s understand how DCO (John’s brain here) works.

Jenny, a 20-year-old student and a regular at the store is fond of bright colored footwear. Now John not just knows this but remembers her shoe size and that she’s going on a beach holiday next week. On Jenny’s most recent visit to the store, she came having made up her mind to buy a pair for her vacation. Without wasting any time, John suggested a few beach flip flops and loafers in colors that Jenny generally prefers. She’s amazed by John’s awareness and makes up her mind to buy a yellow flip flop instantly.

John also suggests Jenny to buy the red sneaker which she loved on her last visit but had left as it was priced higher than she expected. Now that it was available at a 30% discount and her size was still in stock, Jenny ends up buying the sneaker too.

Result is a win-win situation for both, as John ends up selling two footwear to Jenny instead of one and saves a lot of time and effort which he would’ve wasted had he not remembered Jenny’s preferences and her vacation plans. He can spend that time on other customers which improves his efficiency considerably. Jenny on the other hand got a great flip flop, an amazing deal on the red sneaker she loved and her in-store experience was excellent as she was shown shoes that caught her attention immediately. She thanked John for his excellent service and left the store delighted.

Now DCO works in an equivalent manner in the Display Advertising space. The ads powered by DCO show dynamic content depending on a person’s demographics, likes, dislikes (just like Jenny’s bright color shoe preferences) and if combined with retargeting can display products based on their browsing/cart history (the red sneaker Jenny left last time). The advertiser might gather this information through data filled by users on his own site or from 3rd party data sources and this information makes the ad extremely personalized. As per numerous case studies, using DCO has shown three-fold increase in click-through rate and an 85-percent lift in conversions.

Below is how the Online banner would look like if it was John’s brain working as DCO, with additional dynamic banner elements like border/banner color, CTA button design etc. personalized as per Jenny’s demographics and browsing history.


Apart from extremely personalized ads, using a DCO results in tangible and measurable benefits like the following:

  1. Reduced cost and effort of making different creative variations: The Inhouse creative team or the creative agency need not spend hours creating thousands of creative variations. With DCO these can be created in real time just before the ad is served.
  2. Highly customized ad experience leading to higher user engagement: DCO helps you deliver more engaging ads by pushing messages or creatives that are most relevant for specific audience. 1st party cookie data, 3rd party data, DMP’s, time of day, geographic location and several other factors are used to build ads. A user can have an entirely different advertising experience from someone just a few blocks away and visiting the same website because they have been searching for different things and have signaled distinct behavior in the past.
  3. Provides Flexibility to test your creative ideas: DCO solutions today offer advertisers complete control and flexibility over the creative layout, enabling the Creative team to experiment with all possible alternatives that they think have potential. Ad templates can be custom built for the advertiser so they have control over how their brand is conveyed and experienced by the consumer.
  4. Maximize conversions: DCO allows advertisers to test every permutation and combination helping them scientifically determine the best-performing creative for each audience type. By boosting the most engaging ads, you guarantee maximum ROI making it the best tool to optimize at a creative level.