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A/B Testing and Ad Personalization

The digital advertising world can be dizzying. Driving results in such a dynamic environment can be challenging. Naturally, advertisers do everything in their power to best fulfill their advertising KPIs like engagements and brand recall and brand visibility, among others. However, one important factor that can make a world of a difference is the ad creative itself. The ad creative creates the first impression in the minds of customers. Advertisers must ensure that the ad creatives are relevant to their viewers. As it may involve a variety of options, it is a wise choice to test the different versions of the creative before you settle upon the final one. For this, methods like Dynamic Creative Optimization – a programmatic advertising technique and A/B testing can be utilized.

A/B testing is a method that lets advertisers test the effectiveness of different versions of a creative, say “A” version” vs. the “B” version. Advertisers drive equal volumes of traffic to each version. This helps to determine which on version do the users click more or engage with and which one is more effective at accomplishing the decided goal, which may include more views, engagement and so on.

Further, A/B testing can be done in two ways – sequential A/B testing and parallel A/B testing. Sequential A/B testing involves testing the creative through multiple stages, five being the optimum number, and then finding the best performing ad creative at every stage. Then, additional improvements are made to this best performing creative and these additions are tested at the next stage to further enhance the results. At each stage, the success of goal fulfillment is measured. The process stops when optimum results are achieved.
Parallel A/B Testing involves clubbing different creatives or different versions of the same creative in multiple groups and testing all of them at the same time. The best performing group at each level is then selected and the winners from each group are tested against one another in the next stage. This process continues until we get one best performer, which is the final creative.

Today, personalization is the key in order to achieve success in the world of digital advertising. Personalization aims at creating a creative to serve each audience segment, instead of serving the best performing creative to all the segments. Personalization relies on segmenting traffic based on factors like behavior, demographics, referrer, so on and then serving a creative tailored to those factors. Personalization helps advertisers to serve the right experience in real-time to the right audience.

Programmatic advertising provides a great technique to achieve personalization. It is called Dynamic Creative Optimization (DCO). With DCO, advertisers can create creatives on the fly. It basically uses users’ run-time data to dynamically change the ad copy shown. It can change the ad copy elements to suit the users’ run-time preferences based on their past browsing patterns. Creative Management Platforms (CMPs) can be used to generate the creatives at scale. CMPs help in generating huge volumes of ad copies which can be tested and the best performing copy can be used.

Though the two are different from each other, they can be used together to get the best of both worlds and better fulfill the advertising KPIs like increasing the CTR% or getting more views.

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