Dynamic Keyword Insertion: The Good, the Bad & the Ugly

Have you ever done a super-specific search for an obscure item on Google and been shocked to see an ad that is offering—to a tee—exactly what you are looking for? If so, there’s a good chance that the advertiser was using a strategy known as Dynamic Keyword Insertion (DKI). DKI allows you to customize your ad to match the user’s search query, thus creating a more specific, highly targeted ad that perfectly matches the searcher’s intent. To do this, the advertiser can create a generic ad that contains the dynamic keyword insertion formula. When Google serves this ad, it will substitute the keyword that triggered the auction for the formula in the ad.

For example, if an advertiser implemented the ad text above and their ad was triggered by the search term “german chocolate cupcakes,” this ad would be displayed:

Pretty cool, huh? Well, there’s actually a bit of controversy among PPC experts as to how good this strategy is for your account performance. WordStream’s founder, Larry Kim, recently spoke at the SMX West conference and shared his two cents on DKI. According to Larry, DKI is a “good, not great” strategy for PPC advertisers. His research shows that ads with DKI can be relatively successful, but the majority of the truly top-notch ads do not include DKI. Instead, these “unicorns” appear in ad groups that are highly targeted with custom written ad text.

Personally, I think the effectiveness of dynamic keyword insertion is purely situational. In this post, I’ll break down the good, the bad and the ugly of dynamic keyword insertion, to help you understand its ideal (and not so ideal) use cases.

Dynamic Keyword Insertion: The Good

Let’s start by looking on the bright side. In the right circumstances, Dynamic Keyword Insertion can work wonders for an account. Here are a few of the pros of DKI:

Quick and painless implementation

For busy, overworked advertisers, DKI can be a huge time saver. For example, imagine a campaign for an e-commerce site that sells printer ink. When it comes to ink, users tend to search for the specific SKU number that fits in their printer. Since they have super-specific needs, they are looking for ads that match these needs. Therefore, if an advertiser serves a generic ad, the searcher is unlikely to click. On the flipside, e-commerce ink stores may sell hundreds of variations of ink and it is challenging to create an ad group for every SKU number.

Voila! This advertiser is a perfect fit for DKI.  

Bolded keywords in ad copy

If a user’s search query is present within an ad displayed on the SERP, Google will bold those words within the ad text.

This benefits searchers, because they can easily find ads that are targeted to what they’re looking for. It is also hugely helpful for advertisers, because it draws attention to their ads, even if they have a lower ad rank. This occurs frequently when advertisers are using DKI and in turn, advertisers tend to experience high click-through rates with these ads.

Ads with DKI can potentially exceed character limitations

Ever catch an ad with 26 characters in the headline, rather than 25? The first few times I saw headlines that didn’t fit within Google’s strict character limitations, I was confounded. Finally, I realized that the commonality was that they were all using DKI. With DKI, Google tends to be a little more lax with their rules, benefitting advertisers using long-tail keywords. Keep in mind that this is not a guarantee—think of it as an added bonus feature you may get when using DKI!

Dynamic Keyword Insertion: The Bad

Dynamic Keyword Insertion doesn’t always yield award-winning ads. Here are a few circumstances that can lead to less-than-stellar ad copy:

Generic ads for long-tail keywords

If your ad group mainly consists of long-tail keywords, chances are you should not go the DKI route. When your keyword does not fit in your ad within AdWords’ preset character limits (give or take a few characters, as explained above), your substitute text will be displayed instead. In this case, DKI falls by the wayside and your searchers will be subject to generic ads.

DKI fatigue

Although most advertisers only implement DKI in the headline of their ad text, Google permits its use in any line of ad text. In an effort to create hyper-custom messaging, some advertisers like to use DKI multiple times in one ad. This is a dangerous practice, as it can result in repetitive, spammy ads like the one pictured above.

Appearing for Irrelevant Keywords

As you can see in the PPC faux pas below, you’ll find yourself in hot water if you’re using DKI and bidding on keywords that are not relevant to your business.

As you review your keyword lists, truly assess whether each keyword is pertinent to your offering. I like to ask myself, if I was searching for this keyword, what would my intent be? If it doesn’t align with my offering, I don’t bid on it. Also, keep an eye out for any keywords that you may have mistakenly added, just like those shown in the image above.

Dynamic Keyword Insertion: The Ugly

Sometimes mishaps encountered with Dynamic Keyword Insertion can be just plain ugly. Here are some painfully embarrassing scenarios we’ve encountered from advertisers using DKI:

Using the wrong DKI code

Sadly, we catch advertisers making this mistake all of the time.

For DKI to function properly, it is critical that you use the proper formula: KeyWord: Substitute Text. In this case, the advertiser used “DKI” rather than “KeyWord” so Google did not swap in the keyword, resulting in a nonsensical title. Other common coding mishaps are using brackets [], rather than braces or adding a space between KeyWord and the colon. Any of these minute mistakes can lead to disastrous ads like the one pictured above.

Displaying misspelled keywords

There’s nothing wrong with bidding on misspelled keywords. In fact, we actually encourage advertisers to do this, as they can sometimes be cheaper and less competitive than the actual terms. However, one should be mindful to never include misspelled keywords in ad groups with DKI ads, as the misspelled keyword could appear within the ad text.

This makes for a terrible first impression and may discourage searchers from clicking on the ad.

Violating AdWords Trademark Policy

When it comes to setting trademarked terms as keywords, anything is fair game. However, Google restricts the use of trademarked terms in ad copy. This introduces a major problem for advertisers who are bidding on competitors’ branded terms and using DKI.

To avoid this, try putting competitors’ terms in separate ad groups with non-DKI ads.

Dynamic Keyword Insertion Best Practices

So, now that you’ve been warned about the pitfalls of DKI, here are a few rules of thumb to keep in mind to ensure you are implementing it properly:

Follow the appropriate format to ensure Google swaps your keywords into the right places.

Remember that you can control the capitalization of words in the dynamic text, by changing the way “keyword” appears in the DKI code. Here are some examples to keep in mind:

keyword = german chocolate cupcakes

Keyword = German chocolate cupcakes

KeyWord = German Chocolate Cupcakes

If you have a number of long-tail keywords in the ad group, be smart with your substitute text. Ensure that it is highly relevant to the ad group, so you can still capture the attention of the searcher.

Most importantly, remember that the best way to assess whether Dynamic Keyword Insertion is benefitting you is to test your ad performance! We recommend always running at least two ads per ad group. To test whether DKI works for you, try running a split test with a standard ad against an ad using DKI. Monitor your click-through rates and conversion rates to determine whether DKI is doing the trick!

What has been your experience with Dynamic Keyword Insertion? Feel free to comment below!

Erin Sagin is a Customer Success Manager at WordStream. In addition to conducting software training and consulting calls for clients, she also helps to maintain our usability testing program. Originally from Western Maryland, Erin majored in International Studies with a concentration in Latin America and the Caribbean at Kenyon College. When she’s able to take a break from PPC, you’ll find her practicing her hula-hooping skills or planning her next trip to Latin America. You can follow Erin on Twitter and Google+.

This post originated on the WordStream Blog. WordStream provides keyword tools for pay-per click (PPC) and search engine optimization (SEO) aiding in everything from keyword discovery to keyword grouping and organization.

Dynamic Keyword Insertion: The Good, the Bad & the Ugly