Dynamic Keywords in Google Ads Headlines

Brian Bojan Dordevic
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Brian Decoded

President at Alpha Efficiency

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Paid ad costs are steadily increasing, with advertisers in highly competitive branches of the industry paying as much as $50 per click. Therefore, most business owners are doing their best to decrease their expenses by increasing ad relevance. The logic is very straightforward: The more relevant the ad is to the searcher’s query, the more clicks it will attract and enjoy better placement at lower costs per click. Dynamic keyword insertion is one of the best strategies you can implement into your marketing campaign as it allows you to improve your ad relevancy with little extra effort. If you are interested in including this powerful feature in your set of advertising tools but are uncertain about where to start and how to make the most of it, you have referred to the right web pages. In today’s article, our PPC agency in Chicago uncovers everything you need to know about dynamic keywords in Google Ads headlines. We’ll reveal the inner workings of dynamic keyword insertion throughout the following lines. We’ll also take a closer look at its benefits as well as provide a few tips to get you on the right track right from the start.

google ads dynamic keywords in headlines

What is dynamic keyword insertion?

Dynamic keyword insertion (DKI) is part of Google’s advanced search ad features. It uses machine learning to increase ad relevance by automatically updating your ad copy to include a keyword in your ad group to better match users’ search queries.

For example, let’s say you are running a dynamic keyword insertion in an ad group containing the keyword used cars. If a user searches for the term used car prices, AI will recognize that query as a close enough match to one of your keywords and display your ad.

With dynamic keywords, you are basically generating multiple headlines with just one ad.

How does dynamic keyword insertion work?

So, dynamic keyword insertion updates your Google Ad copy in real-time by inserting your target keywords in headlines if they match the user’s search. Here is a closer look at how this process works:

  • You start by creating a campaign and adding various keywords to the ad group.
  • By using specialized formatting, you signal to the search engine that certain parts of the ad copy are to be dynamically updated in order to match any of your keywords in case a user’s search triggers them.
  • When one of your keywords gets triggered, the user is presented with your ad and the respectable keyword included in the ad copy.
  • The rest of the process goes as you would expect. Once a user clicks on your ad, they are taken to your landing page for the ad campaign.

How to format dynamic keyword insertion code?

If you wish to include DKI in your campaigns, you’ll need to use specialized formatting while creating ads. All you need to do is specify {Keyword:Default Text}, so Google would know what to include in the headline in cases when your keyword can’t be subbed in. So, if you wish to display Used Cars and the default text, you need to format the code in the following way:

{Keyword:Used Cars}

Tips for formating DKI properly

You need to pay close attention to the way you are formatting your dynamic keyword to ensure that it is appropriately displayed in Google Ads headlines. One of the first things to consider is capitalization. By changing the title case of the letters K and W in keyword, you can change the way your keyword is capitalized once it gets subbed into the ad’s headline. To elaborate, let’s get back to our previous keyword example and explore the possible outcomes:

  • If you use the format KeyWord, your keyword will be capitalized this way: Used Cars
  • Alternatively, you may choose the format Keyword to get the following outcome: Used cars
  • Or the format keyword, which would result in: used cars

Also, the way you capitalize the default text in the code determines the form in which it will be shown in the ad copy. So, if you capitalize your default text like this:

{KeyWord:Used Cars Best Deals}

The capitalization would remain the same once (and if) the default text is placed in the ad copy.

The next thing you should pay attention to is spacing. You may have noticed that we haven’t used space after the colon. The only spaces you should include are those you wish to appear between the words of your default text.

If the length of your dynamic keyword prevents it from being Inserted into your Google Ads headlines, the engine will use the default text instead. This only stresses how important it is to take your time and carefully compose default text for each of your campaigns.

Which types of campaigns are the best fit for dynamic keywords in Google Ads headlines?

Naturally, not every type of campaign will equally benefit from dynamic keyword insertion. The same goes for different types of businesses. Here are a few types of businesses that may expect an increase in overall user engagement with dynamic keywords in Google Ads headlines:

  • Service providers that offer many similar but not quite the same services. For example, our web design agency in Chicago offers website designing, brand designing, and logo designing services, among others. With the help of dynamic keywords, we are ensuring that our searchers are always displayed with relevant ads.
  • Retailers who advertise multiple groups of products at once. Although the types of products vary, dynamic keywords can help them let their users know that they do sell the product they are looking for,
  • Dynamic keyword insertion can also help consultants emphasize a relevant experience that allows them to stand out with different target audiences. For example, a content marketer may choose to advertise both their finance writing and eCommerce writing services.

Dynamic keywords provide the best results when used in accounts paired with condensed ad-group-to-keyword structures since there are fewer ad groups with similar and properly categorized keywords.

Benefits of dynamic keyword insertion

So far, we have explored ways to structure your dynamic keywords and talked about the types of businesses that may benefit the most from this strategy. Now, let’s check what including dynamic keywords in your Google Ads headlines brings to your marketing campaigns.

Increased relevancy

As we have already mentioned, ad relevance is the force that drives clicks to your landing pages. And this is true for every aspect of online marketing, from SEO to PPC.

When searching for a product or a service online, users are looking for the result that best fits their current needs. That’s why ads with headlines and copy that match their search query are most likely to catch their eye and entice them to click. Dynamic keyword insertion does just that. It updates your ads to show users that you offer what they need.

Higher click-through rates

This is the direct result of the previous point. More relevant ads bring higher click-through rates. In addition to displaying an ad that features the same term the user searched for, Google also highlights the matching term in the description part of your ad, making it stand out even more. That, in turn, grabs a user’s attention and reinforces the idea that they are a click away from what they are looking for. Dynamic Search Ads can help you reach potential customers effectively with this approach.

Higher quality score

Google uses metrics such as CTR, keyword relevance, and landing page relevance to assess how relevant the ad itself would be to a user.

Increasing quality score is a trending topic in the advertising community. A higher click-through rate will largely benefit your expected CTR, thus adding to your quality score. That, in turn, results in lower cost per click (CPC), higher ad position and rank, and can potentially bring the lower cost per acquisition (CPA).


Retargeting your customers with the exact term and item they already looked at is a highly effective practice for recovering abandoned shopping carts and building brand trust.

Similar results to SKAGs without all the hassle

Single keyword ad groups (SKAGs) are ad groups that contain only one keyword. Although they allow advertisers to write highly relevant ads, they can be extremely time-consuming to create and manage. 

As long as you are thorough in grouping your keywords into tightly themed ad groups, you can achieve the same impact as you would with SKAGs without going that extra mile. Businesses with condensed ad-group-to-keyword structures can make ad management and campaign monitoring more streamlined and efficient.

SKAGs are an excellent advanced strategy that provides a high amount of control and relevance. However, not every business necessarily has the capacity and workforce to go down that road. For those that don’t, including dynamic keywords can be a great workaround.

Caveats of dynamic keyword insertion

All the benefits you can get from using Google Ads dynamic keywords in headlines sound genuinely fantastic. However, DKI is a very advanced feature, so you shouldn’t go all in and use it freely across all of your campaigns and ad groups. Here are a few things you should be aware of before jumping in:

Competitor keyword targeting

Targeting competitors’ branded keywords through comparison-focused ads to draw in some of their traffic is a common strategy. However, it is the one that should not be combined with dynamic keyword insertion.

Some industries consider including competitors’ brands in your ads a trademark violation. While you can bid on their keywords, using their brand name in your ad copy can put you on the wrong side of the track with Google’s trademark policy.

Besides that, placing your competitors’ keywords in your copy may seem like you are pretending to be them. That’s especially true if you use dynamic keywords in Google Ads headlines. It can lead to yet more trouble as you are putting your business at risk of violating Google’s misrepresentation policy and may get your account suspended.

Proofreading and misspellings

You have to ensure that your ad still makes sense once a keyword is dynamically inserted. For example, if plural keywords don’t fit well in your ad copy, placing them there may result in sloppy and unprofessional ads.

It’s good to put plural and singular keyword forms into separate ad groups as a preventive measure. Another essential thing to look into is whether your dynamic keyword insertion code is adequately composed. Extra spaces, misuse of capitalization, or including brackets and parentheses instead of braces can make your ad look amateurish.

Single-word headlines

You have as many as 30 characters at your disposal when writing headlines. Failing to use the most of it can make your ad look like spam. Besides, you are missing out on an opportunity to tell users why your offer is the right choice for them.

As an additional benefit, maxing out characters in headlines takes up more real estate in Google’s SERP. The more page real estate your advertisement takes up, the less is left for your competitors.

If your campaigns contain single-word keywords, make sure to surround them with additional words in headlines to make them look more compelling. It’s good to use descriptive terms around dynamic keywords for extra impact. For example, instead of using men’s shirts as the dynamic keyword, you may add something like Designer {KeyWord:Men’s Shirts} to capture more interest with your prospective customers.

Another thing you can do is use call-to-action terms such as call, book, or hire around your dynamic keywords.

Avoid using dynamic keyword insertion with broad match keywords

Broad match keywords cover a wider range of search terms for which your ad may be displayed. That serves against the very purpose of DKI. Dynamic keyword insertion only substitutes your actual keywords. Due to the sheer variety of terms that can trigger your ad, it is very likely that the match won’t always provide the relevancy you were aiming for.

Look at it this way. Let’s imagine that our broad match keyword is men’s shirts and the dynamic insertion headline is Men’s Shirts For Sale. Due to the way broad match keywords function, our ad would be eligible to show for queries like how to make men’s shirts or men’s shirts sewing classes. But, our ad is not relevant to any of these queries. To add insult to injury, as our ad gets triggered for irrelevant queries, both our CTR and quality score go down, further hurting our marketing efforts.

Long keywords might not display properly

Long-tail keywords are a great feature to include as they can indicate buying intent. But, when using them in dynamic ads, they may not display correctly as they are often too long to fit in.

How to set up Google Ads dynamic keywords in headlines

There are two ways to set up dynamic keyword insertion. You can either use Google’s guided method or choose to do it manually. The guided method is useful to advertisers unfamiliar with the feature since Google provides prompts to help users format everything correctly. In contrast, the manual method is faster to set up Google Ads dynamic keywords in headlines. It is recommended to marketers that are already comfortable with the feature. This section of our article will explore both guided and manual options.

Guided method

As soon as you enter a brace into your ad text, a small pop-up window appears, offering various advanced ad options and guiding you through the entire process. Here is how it works:

  • Type a brace ({) in the area where you enter your ad text and click on the Keyword insertion option in the drop-down menu.
  • Next, use the default text section to enter the words you wish to display when a keyword can not replace the text. Make sure to mind the capitalization.
  • Then subbed in, your text will remain capitalized the way you did it in this section.
  • The next step will see you choosing how you wish your keywords to be capitalized.
  • Title case: The first letter of each keyword is capitalized – Used Cars.
  • Sentence case: The first letter of the first keyword is capitalized – Used cars.
  • Lower case: None of the letters is capitalized – used cars.
  • Click Apply.
  • Preview the copy to ensure everything is displaying as intended.

Manual method

The manual method is pretty much the same, except that Google doesn’t guide you throughout the process. Instead, you are using formatting right away:

  • In the ad text area, insert {keyword:default text} where you want your keyword to be displayed.
  • Instead of default text, insert the word (or several words) that you want to be displayed when the keyword can not replace the text. Back to our used cars example, this is how it would look like: 

{keyword:used cars}

Once again, it is essential to capitalize the default text the way you wish it to appear if used.

  • Capitalize keyword the way you want your keyword text to be. We have already talked about capitalization rules within the code. Note that your headline and ad text can have different capitalizations if you find it necessary.
  • Your default text needs to be short enough so your ad can fit within the character limits.
  • Don’t use special characters (such as é) in the display or landing page URL.
  • Save the ad.

Split-test ads for maximum CTR

Don’t forget to A/B test your ads to ensure the version you are using will provide maximum click-through rates. Dynamic ads allow you to test multiple features, including:

  • Headlines
  • Link descriptions
  • CTAs
  • Text
  • Images
  • Keywords

To split-test dynamic ads, make multiple versions of the same ads that target the same keywords and change only one element. For instance, our ad for used cars could use multiple images in one version and a single image and text overlay in another. Then, you should run both versions for about two weeks and see which brings the most clicks and conversions.

Keep ad groups tightly targeted

DKI serves to create highly relevant ads. So, to get the most out of this feature, you need to ensure each ad group targets one groupš of closely related products or services.

For example, we may use different manufacturers in the same ad group for used cars, but we shouldn’t put bicycles and motorcycles in that group.

Dynamic keyword insertion is not limited to headlines

Dynamic keywords are most commonly used in Google Ads headlines since this is where a matching keyword is the most visible. However, you may also include it in the ads’ main copy or other parts if you find it necessary. But, you need to ensure that it blends seamlessly into the surrounding text since there are many more characters supported, so the chance of a grammatical error occurring gets higher. That is why proofreading is critical.

Mind the capitalization

Google has strict editorial rules on what types of capitalization are approved. While Google may allow you to use something like FYI, they would probably disapprove words like FREE or ASAP. Also, excessive use, such as writing the entire ad in upper case letters, is sure to be frowned upon.

Final thoughts

Dynamic keyword insertion can be your magic bullet for creating super-relevant ads. It is hard to imagine anything more relevant than conducting a search and being hit back with an ad that contains the term you just searched for in the copy. That’s why it is critical to have the right strategies in place and follow the best practices we have talked about so your ads would look polished and professional at all times.

Choosing the right keyword strategy is a complex issue for any business. We sincerely hope that this article will help you scale and streamline your advertising campaigns.


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