This post is continuously updated to reflect how programmatic creative and dynamic creative optimization (DCO) are evolving.
When people think of the relationship of programmatic creative vs. DCO, a common misunderstanding is that dynamic creative optimization and programmatic creative are different technologies. One is actually a subset of the other. DCO falls under the programmatic creative umbrella, but it’s not the only way to build creatives that activate the 6+ billion dollars of data in contained in programmatic media.
To illustrate this idea, let’s start with a definition of programmatic creative.
Programmatic creative refers to the set of advertising technologies that add speed, scale, and automation to the creative process. This covers both ad production and creative optimization. Programmatic media has unlocked tremendous potential in how we tell stories in paid media online, and the purpose of programmatic creative is to enable data and creativity to come together to tell brand stories in a more resonant and effective way than ever before.
The most often cited use of programmatic creative is to personalize ads to be more relevant to their audiences. Instead of showing one generalized creative to all, it is now possible to segment audiences into groups and show each group a custom creative that is more likely to impact them specifically.
Programmatic creative also enables better message testing and optimization, by both enabling the creation of multiple ads for the purpose of testing, and potentially automating the test to optimize on its own.
So at its essence, programmatic creative allows designers to quickly turn around a high volume of quality ads, match them to specific audiences, and take action based on the results. This is possible largely through computer-enabled workflows, software automation, and big data integration. Programmatic creative encompasses technologies that are fully automated as well as those which are purpose-built for programmatic media but where the operator has final control over each creative or optimization.
Now, DCO is quite specialized and very useful for certain situations, like product retargeting, as well as optimizing creatives against audience segments in a data management platform (DMP). However while every brand needs a programmatic creative technology and strategy to do data-driven marketing, not every brand or campaign needs DCO and DCO tactics specifically.
What Technologies Fall Under the Category of Programmatic Creative?
As we explore the technologies that solve creative problems for programmatic media, the approaches that stand out fall into two main categories: dynamic creative optimization (DCO) and creative management platforms (CMPs).
Dynamic Creative Optimization
DCO is a highly automated and rules-driven approach to advertising that actually encompasses two technologies: dynamic creative, and dynamic creative optimization.
A good metaphor to call to mind is that DCO is like an ad factory. This is where dynamic creative comes in. DCO ad units use feeds of data and a set of rules to generate hundreds or even thousands of unique creatives on the fly. The technology emerged before programmatic media took hold, originally with the purpose of dynamically retargeting shoppers with products they had viewed or left abandoned in their digital shopping carts.
As stated earlier, DCO ads can sync with DMP audience segments to serve a specific creative to each segment. They also typically accept the following types of data: time, device, weather, ad placement, location, and retargeting information. And while this data is readily available, it also means that the manner in which the creative is made relevant must align with one of these inputs. Additional code is required to process the data in real time, meaning DCO ads tend to be slightly heavier overall, slowing load speeds, which can have a negative impact on viewability.
The O in DCO is for “optimization” and most DCO technologies offer automatic multi-variate testing. This testing can relate to traits like button color, ad copy, images, and offers—although these elements must be able to replace each other without requiring any adjustment to the formatting of the ad.
More sophisticated marketers will use automated testing as an opportunity to learn about their audiences, testing different creative messages with each audience to see what resonates. Think of a hotel brand for example. They might test two ads: one that speaks to the luxury of their accommodates, and another about the value for travelers on a budget. Knowing what message resonates with an audience—luxury vs. value—can be a powerful insight.
These automatically optimizing ad units were traditionally used for large direct response campaigns, where the amount of impressions that will be served justify the opportunity cost of testing so many variants, and where ROI can be clearly tracked all the way to the sale. More recently many advertisers are using DCO to split test a handful of creates against all of their audience segments.
Setting up dynamic creative to optimize against DMP segments can be a complex process. How do you choose one segment over another in the decisioning tree? Some organizations answer the question based on a best guess. However, the best DCOs can use machine learning over the course of their operation in order to prioritize audience segments, composite segments together for better reach, and pick the best creatives to pair with each individual segment.
Depending on your vendor, setting up DCO ad units can be a complex and technical process, so careful planning is required, as is a reasonable buffer of time. It’s important to pick a vendor with high marks on service. It is very common for vendors to offer managed services to assist advertisers in getting their campaigns launched, although the technology is becoming increasing usable in a self-service manner.
Above: DCO ad units can be configured to pull in retargeting data like product catalogues, special offers, and store information. This requires consistency in formatting of text and image assets for best results. Ad units for high impression campaigns can use machine learning to present multiple offers and optimize for the best combination over time based on attributes of the person viewing the ad.
Creative Management Platforms
Creative management platforms (CMPs) represent an all-encompassing approach to programmatic creative. If DCO is like an ad factory, CMPs are more like an ad factory plus design power tools, allowing designers to produce large sets of ads at the same time, but also dive in to make small changes to each individual creative as needed.
In contrast to the complex technical nature of traditional DCO, the power tools elements of CMPs provide a scalable creative environment that is conducive to creativity. CMPs are focused more on enabling a designer to create and manipulate a large amount of creatives all at once, one at a time, or somewhere in between, versus focusing purely on automation. When creating many versions of a creative, there are monotonous or repetitive tasks. CMPs seek to remove as many of those as possible.
By offering both a DCO solution, as well as design tools that do not require data feed integrations or pre-programmed logic, CMPs enable creative for any purpose, regardless of what data or audiences are being used in the targeting. File load sizes are lighter than with the non-DCO units because the ad doesn’t need additional code to build itself on the fly. This process also removes the need for heavy upfront planning or use of managed services because the toolset is closely aligned with existing design software in many respects.
Above: CMPs allow a high volume of ads to be created using a base layout. Then individual elements can be customized to suit the design as needed. This is includes modifying traits like image position, text position, and text size. Entire objects can be added or removed from individual creatives as well. This example illustrates offers created from a template with a CMP. The creatives are timely (holiday, winter) as well as tailored (by a specific designer or product type). Slight changes to each variation provide the needed polish to complete the design.
Programmatic Creative Case Studies
The potential uses for programmatic creative are incredibly diverse. To root these technologies firmly in reality, it may be helpful to see some examples and results.
- See how Anheuser-Busch knocked out an ambitious campaign in record time and at a 46% cost savings versus their usual process. Download Anheuser-Busch case study
- Agency Anagram increased sales for their client by 565% while using Thunder to power their programmatic creatives. Download Anagram case study
- HomeAway used programmatic creative to double ad production in Asia. Download HomeAway Asia case study
For more resources like these case studies, plus eBooks and helpful videos, see the Thunder Resources page.
Programmatic Creative: Comparing CMPs and DCO
If you are evaluating programmatic creative technologies, the most important thing is to understand the problem you are trying to solve and how you want to work. We’ve touched on some of the comparison points between CMPs and DCO already, and in this section we will go into more detail.
It’s worth reiterating the dynamic creative optimization is one of multiple capabilities in creative management platforms. Other capabilities in a CMP might include mass banner versioning, rich media ad building, Facebook ad production, and even video. With this array of possibilities, every brand can use a CMP to improve marketing efficiency across channels, formats, and types of campaigns. Not every campaign needs just DCO specifically.
What Skills are Required?
These emerging programmatic creative technologies can require new combinations of disciplines to operate. To incorporate data into digital advertising requires adding a bit of technical complexity into a creative production workflow that hasn’t changed fundamentally in many years.
However, it’s necessary to maintain a level of creativity and design polish in the process. Advertising, even when assisted by programmatic technologies, is a creative and visual trade after all.
Likewise, just about all programmatic creative tech will benefit from a strong grasp of how the advertiser’s target market can be segmented and what data is available for those segments. Typically demand side platforms (DSPs) and data management platforms (DMPs) will be used for programmatic targeting. Programmatic creative can be helpful with non-programmatic media as well.
That combination of creative and audience skills is enough to make use of a creative management platform. If dynamic creative optimization is going to be used, additional technical and coding skills are generally required. You must link the data feeds into the ads and set up the logic that will drive the campaign. It can be smart to use managed services for the initial setup of a DCO ad unit, and then to transition to a self-service model to continue to operate the unit over time.
DCO Trafficking and Logic Setup
To configure the automatic decisioning in DCO ad units, set up is required in two places: 1) the data source (frequently a DSP or DMP), and 2) the logic in the ad unit itself. Each input maps to an output, with rules created about what to do with the information.
Here is a plain english example of the setup of a hypothetical DCO campaign:
The DSP is configured to target audiences for the campaign that include 16 targeting line items. For each impression, the DSP will use the viewer’s real time geolocation to determine their local temperature. It will then pass that information to the ad unit.
In the DCO unit, the following logic is configured: When the temperature is below 64 degrees, show the creative with a picture of a hot coffee. Otherwise, show it with a picture of a cold smoothie.
This type of setup requires that there is a way to pass the needed information into the ad unit. This can potentially prohibit or restrict what is possible depending on what other ad tech is involved. In the event that conflicting information is passed, or data is not available for a particular impression, a “default” occurs in the DCO unit and a generic creative is served.
CMP Campaign Setup
CMPs also have the option to create and deploy many individual ads. Ad server integrations, like with DoubleClick Campaign Manager (DCM) make this process fairly painless. A discrete creative is produced in the CMP and provided for each placement or segment.
Here’s a similar example for setting up a campaign with creatives from a CMP:
The DSP is configured to target 16 segments, which include audience differences like age 18-25, age 26-35, loyalty program members, indie rock listeners, pop music listeners, hip hop music listeners, etc.
Using the CMP’s streamlined workflow, 16 similar but unique creatives are produced, each with messaging and imagery personalized to matter more to that segment. If elements need to be added or removed, or if layouts need to change to accommodate a particular creative, those changes are made. Ad tags or HTML ZIPs are trafficked via the DSP in each segment.
This process removes the possibility of data and decisioning conflicts, so CMPs are not capable of defaulting in the way that DCO ad units are vulnerable.
A Comparison of Mindsets
The nature of a technology tends to shape how we use it, and programmatic creative is no different.
When using traditional DCO, the amount of knowhow and setup required makes it a better fit for organizations that carefully plan campaigns months in advance. These kinds of optimized creatives require the entire experiment to be set up before hand. While it is theoretically possible to update an in-market DCO ad, because of the complexity of the technology, these updates tend to happen only when absolutely necessary.
In contrast, the flexible nature of working with a CMP allows it to be used in a wide range of work styles. The speed at which creatives are built in a CMP makes it ideal for teams that want to adopt a more agile approach to test concepts and learn about their audience more easily. Updating in-market ads without re-trafficking is very simple. Creative optimization with a CMP is a more human-driven process. Inquisitive creatives can bring their ideas to life, see how consumers interact with them in the marketplace, and then adapt without delay.
Example Programmatic Creative Use Cases
To bring the comparison together, here are some of the more common considerations that advertisers will take into account when adopting programmatic creative.
Creative management platforms can help you if…
…You want to optimize creative and media together
Example: You are using a single DSP or DSP/DMP hybrid that can optimize both the creative and the media (e.g. MediaMath)
Why? By loading creative objects separately into the DSP, the media system can optimize creatives individually against placements it is buying. A DCO ad, on the other hand, isn’t privy to all of the information in the DSP, and is thus optimizing independently. Allowing one system to optimize all variables together provides the greatest possible efficiency.
…You care about editing each ad version
Example: You have creative in many ad sizes as well as multiple Asian and Roman languages. Because the translations result in phrases and words of such different size and length.
Why? A good CMP lets you mass version and edit each version. Some manual adjustment is necessary to protect the quality of the creative. With the CMP you can preview and adjust images and text to your exact specifications.
…You want to build more creative concepts to test and personalize
Example: You want to try a new layout or template
Why? It’s far easier in a CMP to manipulate both the template and assets to produce new versions. Traditional DCO ads are more tedious to edit or build anew.
…You want to sustain a high bar of creativity in your programmatic creative executions
…You want DCO, but also have other creative needs
…You are looking for a way to build ads in sets of multiple sizes (300×250, 300×600, 320×50, etc) all at the same time. You would even enjoy being able to working on multiples of these sets at the same time.
…If you do want to localize your advertising, you want more customization than changing an address or city name
Dynamic creative optimization (DCO) can help you if…
…You want to optimize the creative independent of media variables.
Example: You have multiple demand side platforms but want to set up the creative once.
Why? DCO runs its own rules separate from media. This makes it a (mostly) single setup that can be run across all DSPs. Individually mass-versioned ads from a CMP would need to be trafficked into each DSP separately.
…You don’t need to edit each version
Example: Product retargeting ads that use a catalog of interchangeable SKUs
Wh? DCO templates that render on-the-fly are rigid. You can’t insert vastly different types of content because you can’t adjust the layout for each version. You can only swap in and out elements like text and images. Retargeting ads use very standardized data, so inserting it into a dynamic template isn’t a problem. To support thousands of products, it is very efficient.
…You want to run a multivariate test of every creative permutation
Example: Test multiple background colors with multiple featured images and multiple button colors and calls to action (e.g. 4 x 4 x 4 x 4 = 256 total versions)
Why? Once you have set up your rules (just like your assembly line in a factory) the ad unit can cover all possibilities that a human may not want to build
Research: A Programmatic Creative Report [Video]
We worked with Digiday to survey the industry on important questions on programmatic creative. The results are summarized in this quick video.
Taking the Next Step
If you found this article useful, you can find additional information in the eBook The Essential Guide to Programmatic Creative Technologies. The book includes example campaigns, workflow explanations, and a section for frequently asked questions.
To continue your journey to transform programmatic marketing in your organization, download your free copy today.