Dynamic Creative Optimization (DCO) was introduced to marketers a decade ago, but after the initial excitement, the implementation and delivery of use cases didn’t match the expectations. However, today, DCO is riding a new wave of adoption by advertisers and agencies.

Gartner shows DCO rising on the “Slope of Enlightenment” for its July 2016 Digital Marketing and Advertising Hype Cycle. According to Gartner, this is the phase where “more instances of how the technology can benefit the enterprise start to crystallize and become more widely understood.” We believe several factors contribute to this newfound enthusiasm.

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Five Reasons Why DCO Is Back and Stronger than Ever

1. Programmatic Advertising Powers DCO and Retargeting
Before demand-side platforms (DSPs) and real-time bidding (RTB), media for DCO was bought directly from the publisher or an ad network. Getting sufficient scale and unique reach could be a challenge—an advertiser had to buy media on multiple publishers or ad networks. Reaching many small and granular audiences required a manual and cumbersome set-up process. This lacked efficiency and there was no way to de-dupe user targeting among the different inventory partners.

Being able to retarget ads to consumers who show interest in products and services through their online behaviors is an important application of DCO and RTB technologies. Combining DCO with real-time audience-based buying through a DSP addresses key challenges around scale and unique reach. The DSP is integrated with many ad inventory sources for maximum scale and has controls like frequency capping across all the inventory, allowing the advertiser to better manage scale and reach. Advertisers now have access to vast amounts of data and advanced technology platforms to apply that data to display advertising campaigns.

2. DCO Moves Beyond Retargeting
Early on, DCO was used primarily by the retail and travel industries for retargeting high-value consumers with advertising. Given the large number of possible ad permutations for retail and travel (thousands of SKUs or origination/destination combinations), these are the logical verticals to be the first to adopt DCO. But advertisers now grasp how DCO can be used beyond retargeting for campaigns across the marketing funnel and across verticals.

While DCO campaigns at the lower end of the funnel—like retargeting and loyalty programs—have always made sense, DCO is also now being applied to top-of-the-funnel prospecting and awareness campaigns. Even if very little is known about a user (for example, from a geotargeted prospecting campaign), DCO can algorithmically optimize the ad content to drive the best performance for the advertiser. DCO evaluates all possible ad permutations and optimizes creative elements and delivery to the best-performing option for the advertiser’s objectives. Any vertical that has granular audience data can benefit from DCO.

3. It’s All about Experiences
Consumers are engaging with brands across multiple devices and digital channels and they’re expecting a personalized, consistent, and compelling experience whenever and wherever they’re accessing brand content. This is truer today than ever before. The fact that ad blocking is on the rise sends a clear signal that consumers are demanding better ad experiences.

DCO is the solution advertisers need to deliver a better experience for their consumers. Advertisers have access to deeper audience insights than ever before and DCO allows advertisers to deliver relevant and engaging ad experiences, and in turn drive better engagement and performance.

4. Data Feeds Are Everywhere
A key component of DCO is the data feed. This is the content that is used to populate a dynamic ad in real time. In a change from just a few years ago, many advertisers are now using data feeds regularly to power their online advertising.

In addition, DCO technology has become more flexible in ingesting data and it no longer requires a third-party vendor. For example, a Google Merchant Center feed can easily be translated for DCO and an Excel file can be mapped for DCO.

Digital advertisers are generally more comfortable using data feeds and customer files to power their advertising campaigns, and they have a greater awareness of how data feeds support DCO.

5. Creative Flexibility
While early DCO vendors required an advertiser to select from a set of predefined and inflexible templates, today’s DCO solutions offer an agency and advertiser complete control and flexibility over the creative layout design. Dynamic ad templates can be custom built for the advertiser so they have control over how their brand is conveyed and experienced by the consumer. The ad layout can include features like a promotion countdown clock, drop-down box, search form, and product carousel, and can be delivered on mobile and across devices.

What does the future hold for DCO?
As DCO approaches the “Plateau of Productivity” on the Gartner hype cycle, it will attain mainstream adoption. We will continue to see advertisers better understand how DCO works and what it can do for them. Access to data and ad-buying technology combined with DCO enables advertisers to deliver relevant and personalized ads to drive better performance and improved ROI.

Last year, Adobe acquired Tumri from Collective, adding DCO to its advertising technology stack alongside Adobe Media Optimizer, a cross-channel programmatic ad-buying platform, and Adobe Audience Manager, a data management platform (DMP).