Dynamic Banner Ads: Pros, Cons and When to Use Them

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Has it happened with you that the blue dress you saw and liked on an e-commerce website started appearing everywhere else—your Instagram, Facebook, and every other platform?

What did you make of it—you’re seeing the dress everywhere because your power of manifestation is getting too strong?

Or the saying— “if you really want something, the entire universe conspires in helping you to achieve it” is happening in real life with you?

Well, it’s not the universe, but the e-commerce sellers and advertisers of the universe who are really helping you to get what you like on their website through the magic of dynamic banner ads.

Dynamic banner ads are the ads in which the content, product, call-to-action, and promotions are altered as per the user behavior. In simpler terms, the ads are personalized based on the online activities of the user. And that’s why that blue dress has been chasing you everywhere.

With competition on the Internet going beyond its limit, dynamic ads help the e-commerce sellers to anchor their potential customers by showing them products that truly interest them instead of some random stuff.

As discussed, the purpose of dynamic ads is to retarget the customers who have already interacted with your brand. That's why they are often used in retargeting campaigns instead of static ads. The purpose of static ads is to reach a broader audience for brand awareness or product launch.

Let’s understand how dynamic banner ads work in a bit more detail.

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How Dynamic Ads Work?

To start with, in dynamic advertising you don’t need to bid on keywords to show your ad. Yes, that’s right.

In keyword based search campaigns, marketers bid on certain keywords and create ads integrating those keywords. So when a person searches for something on Google, and the words they typed matches with your ad’s keywords, your ad will be visible to them based on your bid. For instance, if you’re a shoe brand and you want to rank for the keyword ‘best sports footwear’— you’ll have to bid on that keyword and win to appear on the search engine results of the user.

But in the case of dynamic ads, you don’t need keywords. The search engine will analyze the user’s search query, then it will crawl your website and match the query with your website. If the search engine finds out relevant content on your website, it will automatically create an ad with a headline and landing page matching the user’s search intent.

Since you won’t be able to target every single keyword your users search, there are chances you’ll miss out on leads. Dynamic ads save you from ‘missing out on the keywords’. They help you reach people, or people reach you using different keywords. This way, they allow you to reach a larger audience beyond your keyword bucket.

Benefits of Dynamic Ads

Apart from helping you reach a larger audience, dynamic ads come with multiple benefits. Without further ado, let’s see how they can benefit your business-

1. Keyword Coverage and Discovery

Have you ever thought about how many searches are conducted everyday? The answer will blow your mind.

5.6 Billion!

And this comes out to 3.8 million searches everyday. It means that covering all the keywords for your ad is practically impossible! You might miss out on some keywords, eventually losing out on your potential audience.

But with dynamic banner ads, you are saved from such worries! Based on a search query, it will scan your website or the page listing all the products and come up with relevant content.

In addition, Dynamic banner ad’s keyword search report shows you the list of keywords that resulted in higher conversion, which you can add to your SEO list for new campaigns. Certainly, this will help you save a lot of time that you would’ve otherwise spent on searching new keywords.

2. Better Performance

People love personalized experiences. It gives them a feeling that they have some control over what they are engaging with while also being saved from an information overload.

So when they come across an ad that has been tailored for them, they perceive that they have some level of control and they are likely to engage more. They feel that the tailored ad has saved them from irrelevant content that might not interest them and would have wasted their time.

Additionally, in a study conducted to understand consumer behavior, 43% respondents agreed that they would prefer it better if the ads were personalized. Moreover, 30% said that they liked a brand even better when its ads were personalized to them.

So people don’t usually mind engaging with relevant dynamic ads. It also helps the brand in pushing them further in the sales funnel and get better click rates.

3. Saves your Time

Since display ads are automated, you don’t have to scratch your head over the combination of different elements such as copy, headlines and visuals to perfectly fit in the banner ad. Google does all the heavy lifting in seconds once you have submitted a product or service to the Google Display Network.

It saves you a lot of time and human resources which you can better utilize in other campaigns or various other projects that demand more attention.

Cons of Dynamic Banner Ads

In case of dynamic ads, not all the benefits pan out to be advantageous. Here are some disadvantages of dynamic banner ads-

1. You are not in full control

Even though the ads drive results for your brand, dynamic creatives are obedient children of Google, not you. With limited control over design, you can only choose the headlines, copy and visuals, but the combination isn’t in your hand. So sometimes, the wrong headline gets combined with an irrelevant image.

So to make your dynamic ad successful, you need to do your homework. You can manage when and where your ads are displayed by controlling negative keywords and how targeting specific users will help you achieve better conversions.

2. Extracting Data is Becoming Difficult

Earlier retrieving data wasn’t a tough task. But after the rise in the number of scams and breaches of personal data, people are getting more and more concerned about their data privacy. This has resulted in the enforcement of strict privacy policies.

For instance, with the advent of iOS 14.5, data collection is not as easy a task as it used to be. Apple's policy restricts certain user’s data collection and sharing it with third parties without the user's consent. Since dynamic creatives are created by collecting the data of the target user to personalize the ads, reduction in available data adversely impacts the ad performance.

3. Unreliable Testing

Even though we are able to check the performance of individual creatives, or headlines or copy, the data is not statistically significant because we don’t have enough data. That means, you cannot go in depth and find out why something worked better or what specifically contributed to its good performance and make a well-informed decision.

Note: Statistically significance means that the results of data generated from testing are attributable to a specific factor, and is not a result of random chance.

High Maintenance

Dynamic ads can be high maintenance in the long run. If you don’t update content on your website timely and in quick intervals, dynamic ads will keep picking the same content and make similar combinations of banner ads. So if your content won’t change in your dynamic ad, which is the very basis of dynamic banner ads, it’s primary function is essentially lost.

Clearly, if dynamic ads come with a lot of benefits, they have a fair share of disadvantages too. So to make the most of your dynamic ad, you need to have a plan when and where to run the ad. Majorly there are two platforms—Linkedin and Facebook, where you can best reap the benefits of dynamic ads. Let’s discuss them both in detail.

LinkedIn Display Ads

For a dynamic ad on LinkedIn, the users are targeted based on their demographics such as location, work experience, job designation, and the company in which they currently work. There are mainly two formats to create dynamic ad on the platform-

1. Follower Ads

As the name suggests, the purpose of the follower display ad is to gain more followers for your Linkedin profile. Through the ad, the targeted users of your ad will get to know about your company, and to learn more about you they will be redirected to your Linkedin page, fetching you more followers.

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Spotlight Ads

Spotlight ads are ideal for driving traffic—either to your website or a specific landing page. It can also be used to highlight your products and services, gain email subscribers or promote any event.

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Facebook Dynamic Ads

If you have a large range of products or services that you want to market, facebook dynamic ads are ideal for you. You can even choose from different ad formats that facebook offers- single image ad, carousel, collection and stories.

Facebook’s dynamic retargeting ads are generally used for retargeting and recapture the users attention by showing them items that they liked but didn’t buy for any reason. But you can also use your ads to reach broader audiences that may be interested in your products or services based on their user persona.

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In the end, dynamic ads have both a positive and negative side, but if you have clarity about the end-result you want to achieve from your campaign and do a thorough research on your target audience and how they can impact your sales, you can get the best out of your dynamic ad campaigns. However, it is suggested not to rely on only one ad format but use a mix and match of different ad formats to derive best results.

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