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


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.

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Jun 06, 2014

Interesting post.One thing I'm missing here is the fact that the impact of DKI will decrease with more and better segmentation of an account: well segmented, small and relevant adgroups allow for manual ads that contain the actual search phrase or at least something very close to it, which will more or less negate the effect of DKI.Overall I believe DKI has its uses, but in a well segmented account it shouldn't that much of an impact. My 2 cts.

Jean-Noël Anderruthy
Jun 07, 2014

 Thank you for your article :-)But you don't speak about the main advantage of DKI: the possibility to override the limitation of the number of characters.Another remark : DKI inserts the keyword on that most closely matches the user's query into the ad.Accordingly, dki works particularly well with ad groups that contain words such long tail.

Jun 10, 2014

Thanks for the article. Interesting read.  I used to use a lot of DKI, however I now find it to be too reliant on having an Adwords structure that is built solely for the purpose of using DKI.  You have to remember that plural keywords will read differently to singlular keywords etc & your ad can end up reading poorly.Look at this headline.Buy {KeyWord:Frying Pans}What if you have both the keyword "Frying Pans" and "Frying Pan" in your ad group?When the latter is triggered we end up with an ad that reads "Buy Frying Pan" - I know it's a small thing but it can really mess up the flow of your ad if you don't separate these...which then adds a whole new dimension to managing your account.On a small account I would potentially use them but on a large retail client I think the changes to the structure would be too much.I'd continue to create optimised ads using Excel and a customised product feed that contains our hero keywords for each ad group...surely if your account is structured at a very granular level the need for DKI is removed.

Michael Madew
Jun 12, 2014

DKI is fraught with danger. I agree with your article, but I would err on the side of caution - it won't work for every niche and your landing page needs to provide continuity to see the benefit of higher conversions when using DKI. 

Steve Cameron
Jun 12, 2014

You  are right on the money about DKI being something that many more seasoned marketers simply leave behind. I think there is a natural progression.... you start woring on Adwords and then discover DKI - it seems like the Holy Grail - and you implement it all over the place - and to good effect. But then you begin to look at how it works in practice and realize that in many situations you are simply setting yourself up for inclusion in a blog post about how poorly structured DKI campaigns can lead to some hilarious (and they are hilarious... so long as they are not yours....) ad copy.And with these implications in mind we begin to look at just how structured our account needs to be to take full advantage of DKI - very.... very structured. and with just a little more structure we are looking at single keyword ad groups which do the same thing - but without the fails.And so  we inevitably fall out of love - until someone like you comes along and reminds us of just how wonderful that summer truly was.... and ewe dive back into the DKI pond with fresh entusiasm.DKI is great - and it does all the things it's supposed to do. Better CTR, better conversions and generally lower CPC as a result. But, like everything else that we enjoy, there is a downside.

Michael Kerr
Jun 12, 2014

Good article, though be interesting to know what industry it is. In my experience, DKI doesn't work too well unless it's for technical terms (computer parts, printer cartridges etc) which have part numbers that people use, so that it's extremely well definited for the user. Using it for anything else, generally is lazy/time-saving as accounts should be split by theme/category so that there's no real need for DKI. You can spot a DKI ad a mile off for a retailer and it often looks bad: one of the comments above mentions "Buy Frying Pans" as a headline, with DKI you'd have this but a generic description, this doesn't stand out nearly as much as a tailored ad copy such asOrder Frying Pans OnlineGreat range available to browse.Order by 5pm for next day when you can tailor the text and display URL to the theme of the ad group.I think you only need to look at the farce that is the eBay PPC account (and the negative PR they try to put out to counter it) to see the issue with having a poor DKI strategy

SEO Specialist
Jun 17, 2014

Great Case Study on Dynamic Keyword Insertion. I feel its even better if you take it further and make use of Dynamic Landing Pages. The results are unbelieveable. Its all about RELEVANCE!

Elaine Mikesell
Nov 10, 2017

What are your thoughts about using DKI for in the discount Auto parts industry, pros and cons, and any experience in using it in this niche?


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