Case Study: Does Dynamic Keyword Insertion (DKI) Really Work?

Luke MacLean
August 19, 2015

With all the recent advances in targeting offered in Google AdWords, I thought it made sense to take a deeper look at one of the AdWords features that has almost become old hat to PPC marketers at this point. Dynamic Keyword Insertion is a tool that is often overlooked in the sea of new features and betas that Google continues to churn out, but this staple feature can make a drastic and immediate improvement to your paid search account performance. 

google adwords dki

Google defines Dynamic Keyword Insertion (DKI) as “an advanced AdWords feature that dynamically updates your ad text to include one of your keywords that matches a customer's search terms.” PPC marketers know it as putting those funny little brackets and the word “KeyWord” into the ad copy so that the search term will show up within the body of the ad.

For example, if I use the headline: “Buy {Keyword:New Sneakers}” in an ad and someone searches a keyword I am bidding on, that specific search term (“blue sneakers” or “men’s sneakers” etc.) could appear in the headline of the ad. If the term is too long for the character limit, my default phrase “New Sneakers” will appear instead.

As I said before, DKI is so ingrained in the mindset of most digital marketers that it’s easy to lose sight of how important it can be for increasing click-through-rate, traffic, and conversions. A recent experience with a client who was dead set against DKI showed me what a valuable tool it is and the impact it can have. 

Case Study: What Happens When You Turn off Dynamic Keyword Insertion?

My client was convinced that dynamic keyword insertion was bringing in illegitimate traffic and, despite my protests, insisted that its use was responsible for lead conversions that were unrelated to their business. Rather than upset the client, I did a little experiment and paused all the ads that used any instance of dynamic keyword insertion.

As soon as I paused these ads, I noticed a dramatic drop in account performance.

DKI performance

In the 20 days that we did not employ DKI:

  • Clicks decreased by 48%
  • Click-through rate dropped by 38%
  • Conversions plummeted by 70% (compared to the previous period)

The logic is fairly simple: conversions dropped because a vital step of the conversion process has been removed. If you aren’t getting clicks to the site, how can you generate conversions? Dynamic keyword insertion is known to increase clicks because it forces your ad to reflect back to the user exactly what they are looking for, word for word.

With this evidence I was able to convince my client to revert back to the previous ad copy, using DKI, and make a few other adjustments to improve lead quality. In the 20 days after we reverted to the previous copy, the results were equally astounding:

  • Impressions remained relatively flat (actually down 6%)
  • Clicks improved by 55%
  • CTR increased by 45%
  • Conversions jumped by a whopping 228%

Dynamic Keyword Insertion Performance

After seeing such beneficial results, I then began to look at some of my other accounts and find creative ways to expand use of DKI. So far, the results have been positive.

Best Practices for Dynamic Keyword Insertion

Some quick notes on making the most of DKI:

  • Be conscious of character limits. You have 25 characters in the headline and 35 in the body lines of your ad. Make sure your terms will fit within those constraints.
  • Pay attention to capitalization. Best practice dictates that we capitalize each term in a headline to maximize CTR. However, there may be times that you do not want every term capitalized. Capitalizing the K or W in Keyword will determine the formatting of your phrase capitalization. (More on how capitalization for DKI works here.)
  • DKI can be very effective, but doesn’t make sense in every instance. A clear example of this is bidding on competitors’ branded terms – Walmart wouldn’t want the brand name “Target” showing up in its ads because of DKI.
  • While DKI is most commonly used in the headline or body of an ad, it can also be applied to the display URL of an ad. I have noticed particularly strong results when placing the script in the Headline or body in combination with the URL. This gives the ad an increased relevance to the search term that will make it stand out to the user.
  • When using DKI in the URL, be aware that things such as spaces and special characters will not appear and can make your URL look flawed.
  • Use the ad preview tool in the AdWords interface for an advance peek at how your ad copy will display in the SERPs.