How Dynamic Audiences Can Maximize Display Advertising Performance

I’m often asked whether it is better to change an ad to fit an audience, or to change an audience to fit an ad.

Many in the online advertising industry are familiar with the concept of dynamic creative, which customizes the content of an ad to match the interests of the user seeing the ad.

Dynamic creative is used heavily in the site retargeting space, where there is a fixed audience that has been defined as a group of users who have visited the advertiser’s site.

Typically the ad is customized to show the user a product that he/she has recently viewed on the advertiser’s site, or left abandoned in an online shopping cart.

Is this case, it is very effective to dynamically change an ad while the audience pool remains fixed.

However, there are many cases in online advertising where it can be more effective to use a fixed set of creative, and to dynamically change the audience to maximize ROI.

For example, when performing prospecting or upper funnel targeting, advertisers may not know precisely how to target the ideal audience for new campaigns and online promotions.

Also, because the user is early on in the consideration cycle, it can be more effective to show the user a more general ad that promotes the broader brand or product, instead of promoting a particular product that may be miss the mark of the users interest.

Dynamic audiences can be applied to campaigns targeted with a variety of techniques:

• Search Retargeting. Audiences are dynamically changed by adding and removing search terms on the fly, and by changing recency settings that dictate how long to show an ad after the search event.
• Contextual Targeting. Audiences are dynamically targeted by implemented by continuously optimizing the keywords that define the contextual segments.
• Look-a-like Campaigns. Dynamic audiences are updated by adjusting the parameters of the lookalike targeting, such as whether the lookalike modeling is focusing more on search history, social data, demographic data, or other inputs.

In order to ensure that campaigns benefit from dynamically optimized audiences, here are some simple tips:

• Start with a broad audience. It is typically faster to get to your ideal audience by starting with broad targeting, and then narrowing down the audience once performance data is attained. So, start campaigns with broad audience parameters, and optimize from there.
• Use lookalikes. Lookalikes enable you to find more users like the users that are already converting on your offer, and can be collected on your existing conversion page even before launching your new campaign. Taking advantage of lookalikes accelerates the optimization of your audience.
• Leverage variable pricing. Because some of your audience will be more ideal than others, you will want to vary your bids accordingly. In search retargeting and keyword contextual targeting, this means varying bids by keyword.
• Employ automated optimization. Ideal audiences are usually defined by combinations of multiple attributes, which makes manual optimization next to impossible. The best results are usually seen when automated optimization algorithms that manage huge amounts of data are used.

Both dynamic creative and dynamic audiences are very effective in driving campaign performance, and can also be combined in campaigns where there is enough budget to optimize the “many to many” combinations.