The developing potential of Dynamic Creative Optimisation (DCO) for more relevant media
OMD Germany
15 July 2021

This was originally published on ADZINE and has been translated into English. 

 

Relevance as a performance driver

DCO – Dynamic Creative Optimization – promises exactly that – and more. More precisely, DCO is based on 2 pillars – “Dynamic Creative” and “Optimization”.

“Dynamic Creative” enables us to adapt content in advertising material with little effort so that the message shown – text, images, call-to-action buttons (CTAs) and other elements – is as precisely as possible on the recipient, his current situation and tailored to his needs. For example, it is possible to use just one advertising material template to present a station wagon to the “families” target group and a small car to the “students” target group that is appropriately addressed.

“Optimization” on the other hand goes one step further. We use the technology to draw up and review theses about the effect of advertising materials and then to optimize the advertising materials. In doing so, we create potential that goes far beyond the mere mass delivery of different versions of the advertising material. If, for example, we see that the “you” perform better with the target group “students” than a neutral address, we can – building on this address – test the next thesis, for example with regard to other image content or call-to-action (CTA) .

It is important to mention that the focus here is on the user and creation. Understanding the consumer as well as the brand effect is much more valuable here than an algorithm that “blindly” creates and plays out variants.

A long-running favorite in the advertising industry

Together with the mantra mentioned at the beginning, “DCO” is also a buzzword that will be heard again and again in 2021. The desire of advertisers to increase the relevance for their target groups through personalized addressing continues unabated – both in display banners, on mobile devices, in social networks, in video content or even more recently in the digital out-of-home area (DOOH). In times of up to 5,000 advertising messages per day, more relevance is rightly the key to being effectively perceived by consumers with your message and thus an essential lever for increasing advertising effectiveness.

The majority of OMD Programmatic customers now use DCO and have recognized the advantages for themselves – regardless of whether they are premium automobile manufacturers, fast moving consumer goods (FMCG) or local insurance companies, DCO is an option for almost all digital advertisers. A clear understanding of the advertiser’s objectives is an important prerequisite here in order to define the appropriate factors for evaluating the success of DCOs.

The ideal scenario for DCO advertising material is when there is a feedback channel for measuring success, i.e. the possibility of linking advertising material interaction to the respective success indicator (KPI). If the KPI is about conversions, it is optimal if they can be performed directly on the advertiser’s website. The personalized approach promises the user the equivalent value in the advertising material that he receives on the website.

When conversions learn to fly

With the help of DCO, we successfully advertised domestic German flights for our customer easyJet in the early summer of 2019. On the one hand, geo-based advertising material was played out to recipients in Munich, Cologne, Stuttgart and Frankfurt with flight offers to Berlin,

Image: OMD

At the same time, the inner-German goals were proposed to Berliners:

Image: OMD

The recipient receives a message that is relevant to him through the reference to his environment and directly named added value from the CTA. This enabled us to increase the conversion rate of the strongest format from 0.21% in the benchmark campaign to 0.35% in the DCO campaign.

However, it is not always easy to bring the added value of an interaction with the advertising material closer to the user. Namely, when no conversion is possible via the website – at least that is directly visible to the user.

Convince online for offline conversion

DCO can make a valuable contribution to customers for whom product sales and a visit to a store are important. By focusing on mobile advertising material, we mobilize users to visit us at short notice. DCO enables us to easily create advertising material with various products or to exchange them, so that we can present over 30 different products to different target groups at the same time.

These products are clustered according to target groups via a complex decision tree and displayed according to time of day and geo-location. In this way, the cost-per-store visit can be reduced by up to 50%. Implementation without DCO with the same setup would increase the creation costs by a factor of 2-3.

Apart from optimization – DCO as a cost saving

The more granular the approach or target group segmentation is planned, the lower the wastage and the clearer the cost efficiency when DCO is used. A large playing field is opening up in this regard, especially in the social media area: The user data is very valid here, as it is provided directly by the user; For example, a geo-based display and individual addressing down to the postcode level is possible.

In the case of our customer Genossenschaftsverband Bayern eV, this extended to over 200 Facebook advertising materials, each with their own branch names for the respective location or district.

Grafik: OMD

DCO not only brought the Genossenschaftsverband Bayern eV significant efficiency in the campaign setup, but also detailed insights into performance at regional, city and branch level. On average, we achieved a click-through rate (CTR) of 0.33% for this campaign, which was a noticeable increase over the previous year.

Dynamization of video content for awareness campaigns

Conversions as well as clicks or store visits can therefore be useful KPIs in the customer context to measure the success of a DCO campaign. But what about activities in the Upper Funnel like video campaigns?

The type of implementation here depends heavily on the customer himself. In order to achieve dynamization analogous to the aforementioned channels “Display”, “Mobile” and “Social”, factors such as lead time and available materials are very important. For our customer Renault, we implemented a video DCO campaign in late summer 2020. We used existing videos from the customer to address prejudices about hybrid mobility and to do educational work in this context. In addition to a non-personalized benchmark variant (“Hybrid cars have no power”), three variants with target group-specific addresses (e.g. “Hybrid cars are more for the city”) were created. In addition to an increased view-through and click-through rate, an accompanying brand uplift study showed an almost 20% higher preference for personalized videos.

Image: OMD

Since users tend not to interact with videos, we often use the view through rate (VTR) as the main KPI in the case of video DCO. However, if a call-to-action is used or maybe even the element to be tested, the CTR can also serve as a KPI.

Looked over your own screen edge

DCO therefore plays a role in all user-centered channels: be it on personal devices, such as computers and mobile phones, or in individual media environments, such as in media libraries or social networks. But what about the mass media, in which 1: 1 communication per se is not possible? After all, a big advantage of channels like DOOH or Addressable TV (ATV) is that they achieve the largest possible cross-section of receivers.

Here, the growing spread of programmatic display options helps us to arrive precisely at the individual audiences. The aim is to first identify the target groups available and then to create the advertising material variants in such a way that they are as relevant as possible.

In the case of the ATV broadcast, this can be done, for example, via geographic information, for example with reference to the number of dealers in the city where a test drive is possible. In the DOOH area, target group attributes such as students, commuters or household net income can be used both in addressing and in display with the help of smart data.

Similar to the video DCO, the user in these channels rarely has the opportunity (or even the opportunity) to interact directly with the advertising material, so that these activities are mostly used for awareness measures. For example, TV attribution or drive-to-store conversion can be used as a return channel for measuring success.

Conclusion

DCO is actually the long-running hit in our industry mentioned at the beginning – but one that is constantly developing – dynamically. Neither the switch from Flash to HTML advertising, nor the Firefox cookie block or the GDPR have led to a decline in interest. With the end of the 3rd party cookie in the next few years, the fundamentals for DCO will change again, but here, too, means such as advertising ID or a stronger focus on 1st party data and smart data paths offer the right one Identify audiences for the customer. And that’s just as well. Consumers, advertisers and industry experts agree on one thing: a well-made and relevant approach is always better received than generic advertising.

The potential of DCO has not yet been exhausted – although over 60% of our customers are already using it. In particular, the scalability across products, target groups and markets as well as a simplified production process and thus faster time-to-market make DCO a tool that is not only useful for big donors, but also for small and medium-sized companies.

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