Dynamic Keyword Insertion: Friend or Foe?

One pay per click advertising strategy that I hear a lot about is dynamic keyword insertion. For those not familiar with the method, it’s the practice of entering a variable into your PPC ads so that the user’s search query shows up in the space you specified. It looks something like this:

Buy {KeyWord:Blue Doodads}

So if a user typed in something like “azure widgets,” then the phrase “Buy Azure Widgets” the keyword you’re bidding on that the query triggered would appear in that text ad. But if someone types in a search query that matches a keyword in your ad group that’s way too long to fit in the character limits (for example: “I would really really like to purchase some blue doodads please”), then your default text – the text you specified after the Keyword: operator – would appear instead.

At face value, this seems pretty useful. If a user sees their search query in the ad, then they’re likely to click on it, right? And the truth is that this is absolutely correct. But is increasing click-through rate really what you want?

Your landing page is going to have a much larger influence on your conversion rate than your text ads. So if you increase the CTR of your ads via dynamic keyword insertion and your landing page still sucks, you’re going to end up paying for a lot more non-converting traffic. This will increase your CTR, your cost per acquisition, and your PPC costs in general.

Another consequence of dynamic keyword insertions is that your ads will appear relevant to non-relevant search queries. For example, let’s say you’re bidding on the broad match keyword “buy a yard sign in austin.” The search engines really suck at matching broad-match queries sometimes, so you might end up getting traffic for “online banking sign in” queries. If you use dynamic keyword insertion in the ad headline, then the user will see “Online Banking Sign In” as the headline instead of something relevant to yard signs. If the user is particularly dim (and a lot of people on the internet are), then they’ll click on your ad thinking it’s the login page for their bank. This costs you clicks, and they will never, ever convert since your page was not what they were looking for. In this case, dynamic keyword insertion would be a terrible choice that could end up costing your hundreds or thousands of dollars.

So is dynamic keyword insertion useful? Yes, if your ultimate goal is to increase CTR. But if the main goal of your PPC account is to get the most conversions for the least amount of money, then dynamic keyword insertion in your ads can really throw you off track. Personally, I prefer to manage my ad text on my own and only use DKI in special cases, but I have seen it used to some success when it was set up well. Think carefully about what might end up in that dynamic space before you launch this feature in your accounts.

About Shawn Livengood

Shawn Livengood is a search engine marketing professional based in Austin, Texas. He has extensive experience managing pay-per-click ad campaigns for clients in various industries, from small home-based businesses to large international companies. You can connect with Shawn on Google+.
This entry was posted in Bing, Google AdWords, Keywords, MSN AdCenter, PPC Basics, Text Ads. Bookmark the permalink.

3 Responses to Dynamic Keyword Insertion: Friend or Foe?

  1. Adriaan says:

    I think you misunderstood DKI with your Online Banking Sign In” example. In that case Google will simply use the keyword “buy a yard sign in austin” in de ad headline

  2. Martin Roettgerding says:

    Hey Shawn,
    DKI can only insert keywords into ad texts, so you still have full control over what gets inserted into your ads. If your keyword is “buy a yard sign in austin”, the insertion will just be that, regardless of the actual query.

  3. Whoops…I stand corrected. Adriaan and Martin are correct – it’s the keyword you’re bidding on, not the actual search query that gets replaced in the ad. Here’s the documentation on it for Google:

    http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=74996

    …and for Bing:

    http://msdn.microsoft.com/en-us/library/aa982954.aspx

    Thanks for keeping me honest, guys. Corrections are in italics in the original post.