How agencies are transforming their approach to DCO in 2024

As agencies prioritize personalized ad experiences, they are increasingly turning to dynamic creative to deliver tailored messages to audiences. Dynamic creative optimization (DCO) automates this process, allowing agencies to adapt ads in real time based on user behavior, preferences and other factors.

In a recent Digiday and Clinch survey of more than 120 agencies, 99% of respondents said that DCO is a significant factor in their efforts, including 45% who agreed that DCO is “very significant.”

However, while DCO has become integral to agencies’ workflows, teams are still working to integrate this technology better and add efficiency throughout the campaign lifecycle.

“Now, even basic campaigns include multiple audiences, multiple channels, different creatives with different types of conditions that need to run,” said Oz Etzioni, co-founder and CEO at Clinch. “What teams are realizing is that they can leverage a platform that was built for the most complex campaigns and setups to facilitate and create efficiency and performance.”

Equipped with DCO, agencies are serving personalized, real-time ads at scale

At agencies, teams are using DCO for various campaign applications.

In the Digiday and Clinch survey, respondents most commonly cited real-time adaptability (80%) and personalization at scale (76%) as advantages that DCO offers over non-DCO campaigns. Other opportunities unlocked by DCO include improved relevance in ad serving (60%), A/B testing and iteration (58%) and enhanced engagement (51%).

Agencies rely on numerous types of data sources to support the dynamic elements of their campaigns, including user demographics (81%) and behavioral data (79%). Other commonly used data sources include location-based information (57%), real-time contextual data (46%) and purchase history (32%).

“DCO platforms allow agencies to automate several processes,” Etzioni said. “That translates automatically to scale. Think of channels, creative production, optimization — it all comes down to speed to market, and DCO gives agencies more time to work on strategy.”

Agencies are combating siloes by streamlining DCO workflows

As agencies increasingly use DCO tech to streamline their campaign planning and activation, their toolkits and workflows are also evolving.

Half of the survey respondents have connected their creative strategy planning tools to media, while another 24% have automated creative versioning, and 15% have connected them to trafficking. Less than 10% have automated trafficking or streamlined and automated overall processes.

This slow progress in automating processes echoes agencies’ efforts to fine-tune how DCO teams and functions are managed and structured.

Overall, 71% of agencies report that their creative and ad-serving process workflows are at least “somewhat well-integrated and efficient,” including 15% that describe the two process workflows as “very well integrated and efficient.” However, 28% find their creative and ad-serving workflows are at least “somewhat poorly integrated and efficient.”

Recognizing that fragmented workflows put agency teams at risk of increased human error, agencies anticipate a shift in how DCO functions are structured and managed.

In 2024, 41% of agencies expect their ad-serving team will handle DCO entirely, while 37% expect to approach creative and ad-serving as related but independent processes. Another 16% of agencies will increasingly intertwine creative and ad-serving teams to handle DCO in 2024.

Post-cookies, agencies will lean on first-party data to support DCO

Agencies have traditionally used third-party cookies to source user data for dynamic advertising. With the upcoming deprecation of these identifiers, agencies are shifting gears to ensure they are precisely targeting audiences with relevant ads.

According to the Digiday and Clinch survey, agencies have already adopted strategies such as contextual targeting (74%), enhanced first-party data utilization (67%), consent-driven data collection (52%) and unified identity solutions (51%).

While agencies must adapt to the new digital landscape, DCO will remain integral to their toolkits.

“Even in the most desolate cookieless, identity-less desert, personalization and dynamic ad servers will always have a place,” said Roger Vasquez, vice president of technology solutions at Clinch. “Contextual cues will continue to provide robust opportunities for personalization.”

As agencies increasingly continue using DCO to serve personalized ads in real-time, streamlining their processes and unifying their workflows is taking on greater importance. For more insights into how agencies manage their DCO processes and measure the success of dynamic advertising, download this State of the Industry report from Digiday and Clinch.