With so many levers to pull in AdWords, it’s easy to overlook some of the simplest and most traditional. We work with some highly experienced marketers, and many choose to pass over one tool in particular: Dynamic Keyword Insertion (DKI). The logic goes something like this:

“Our ad groups are so granular that they only contain a handful of keywords, and these keywords are tightly themed. Therefore, there is little difference between DKI and static ad text.”

It’s definitely true that the benefits of DKI diminish as an ad group becomes more tightly themed. In tightly themed ad groups, static ads more closely resemble DKI ads than they do in larger, less organized ad groups. And DKI should never be used in lieu of a well-structured account. But even in granular ad groups, DKI can be a powerful tactic for boosting CTR.

Here’s some recent data for a sample of ads using DKI headlines. The data do not control for other factors in an account but tells the story.

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By passing up DKI, marketers also miss out on one of DKI’s greatest benefits. DKI can result in a longer ad than is possible with static ad text. That’s because in some cases, AdWords will insert your keyword into the ad even if it exceeds the normal character limits. By doing so, DKI provides an additional way to stand out from static competitors. Your default text will of course still need to adhere to the character limits.

AdWords has loved DKI for a long time, and still does. Higher CTR and the resultant boost to quality score and decrease in CPCs is real, and we see it all the time in the accounts we manage.

What is ‘Cheap’ Traffic?

While DKI can lower CPCs and increase traffic, that means nothing if the traffic isn’t converting well for you. Cost per converted click and click conversion rate are critical metrics in any account, and even more so in ad groups using DKI. Ads tailored to the query are great, but only if they are relevant to what you are actually selling (think e-Bay AdWords ads circa 2005). We do see somewhat lower conversion rates with DKI, and in the end it’s all about maximizing profit. If the profit impact of an increase in clicks [conversions] and a decrease in CPC from DKI outweighs the decrease in conversions caused by a lower conversion rate, then DKI makes sense. Google recently published a nice primer on profit-driven marketing. Testing DKI alongside static ads in your ad groups is an experiment that can benefit any digital marketer.