How Dynamic Search Ads Can Take Over Your AdWords Account With Devastating Effects

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Dynamic Search Ads were recently added to all AdWords advertisers’ accounts. This nicely collided with me restarting the management of an old client of mine who had wanted to manage their AdWords campaigns in-house for a while.

This advertiser has had access to Dynamic Search Ads for quite some time and starting a DSA campaign had great potential to generate extra profits from their AdWords campaigns without much extra work. In practice however, there were several flaws and the newly started DSA campaign moved the account from profitable to unprofitable.

The advertiser had started a Dynamic Search Ads campaign in the beginning of 2012 and was relying on the campaign to generate new revenue for his AdWords account.

Dynamic Search Ads can be great, but as many other things within AdWords, they require optimization and do not work optimally with standard settings.

The Official Statement: It Fills Out The Gaps

Dynamic Search Ads were invented to help bigger advertisers fill out the gaps in their AdWords advertising. One of the hurdles many big advertisers keep having is balancing out BMM keywords.

Due to all the new searches happening on Google on a daily basis, you can’t harvest all the potential AdWords can provide by solely relying on Phrase Match and Exact Match keywords. To reach the full potential in AdWords you need to add BMM keywords to the mix, although some of the searches these might catch will undoubtedly be unprofitable for you.

Seeing that many monthly searches on Google are new, trying to add negative keywords faster than Google can serve up your ads becomes a cat and mouse game.

You will always lose a bit, but it’s part of the game. The profits from one-search, one-click, one-sale keywords usually upset the balance (if properly managed).

The same challenge comes with Dynamic Search Ads. If you leave a Dynamic Search Ads campaign to fend for itself then you’ll run into a lot of wasted clicks.

Bad Ads for Current Search Terms Cause Conversion Rate to Lower

In the AdWords account I recently started managing again, Dynamic Search Ads had been increasing in costs/size over the past year from less than $500 per month to $3,500 in March 2013.

Dynamic Search Ads were now taking up 32% of the overall AdWords budget but only attributed to 15% of the revenue. This was the first sign that something was wrong.

By looking closer it became clear that the issue was related to allowing the DSA campaign to run solo: those search terms covered (or paused) in other campaigns were being taken over by the DSA campaign.

Without any internal negative keywords we saw that previously profitable BMM keywords would now have almost no clicks due to the DSA campaign takeover.

This caused a negative result because the dynamically generated ads were not performing as well as the individual ads previously created. We were more clicks than before, but the clicks we received from the DSA campaign converted lower than the same clicks coming from other keywords.

Internal Negative Keywords Are A Must

Looking at the previous example, excluding search terms through negative keywords in your DSA campaign becomes essential for success.

Even though Google says that DSA campaigns will not take over any searches your “active” campaigns are already producing, my findings tell me otherwise. I’ve always been wary about letting Google control too much and this is an open and shut case.

The process of including all your current keywords as negative keywords in your DSA campaigns is however not a small task. Seeing that DSA campaigns are intended for bigger websites, you’re most likely looking at a huge amount of keywords. In our case we had 43,967 active keywords last month.

You can’t just add every keyword as negative in broad match as you would easily exclude all possible searches.

Furthermore, you would have to review all your paused or deleted keywords and make sure you want the Dynamic Search Ads campaign to start showing ads for these. Including these as negative keywords through a systematic process would prove very time-consuming.

Unprofitable Campaigns Get A Second Chance When Activating Dynamic Search Ads

The campaigns and keywords that you have paused or deleted before due to too low ROI will have a very big chance of popping up in your Dynamic Search Ads again.

We saw a big part of the keywords we had stopped reappearing within the DSA campaign. Most keywords were paused due to:

  • Small selection of a certain brand or category on the website
  • Out of season products
  • Unprofitable click prices vs. product margins
  • Out of stock

As we didn’t add these as negative terms in the Dynamic Search Ads, the campaign received a lot of clicks for keywords that were entirely irrelevant.

Great Place for Keyword Research

One of the most delightful findings from opening an AdWords account with Dynamic Search Ads and having them running for over a year is the amount of available search terms you now have.

We have a lot of data mining to do and I’m confident that we’ll find new and profitable keywords to be implemented as BMM, Phrase and Exact match keywords.

Dynamic Search Ads Are Not Set And Forget

Even though Dynamic Search Ads might sound like a wonderful way to get “passive income” through Google AdWords ads, it’s far from a set and forget method. DSA campaigns require a lot of setting up and maintenance in order to produce a sustainable positive ROI.

I rarely say that some things within AdWords aren’t good for anyone. Through the years I’ve seen the weirdest practices producing great results, so I’ve learned to keep an open mind.

If Dynamic Search Ads can fulfill its promises then it can be an immense addition to your AdWords campaigns. However, to achieve the kind of promised results you will need to tweak it a lot and some might say that you’re better off taking the time to work on your own AdWords campaigns.

For another case study on Dynamic Search Ads I recommend reading Elizabeth Marsten’s post on about the subject.

Andrew Lolk

Andrew Lolk

CMO, Co-founder White Shark Media® at White Shark Media®
Andrew Lolk is the author of the 189-page free AdWords ebook The Proven AdWords Strategy. He's worked in AdWords since 2009 and have co-founded White... Read Full Bio
Andrew Lolk
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  • Elizabeth Marsten

    Great post…unfortunately. I was hoping that DSAs would be more successful for others, but I am finding time and time again that they are more trouble than they’re worth right now.

    • Andrew Lolk

      Hey Elizabeth,

      Thanks, I’m glad you liked it 🙂

  • Jeroen Maljers

    Thanks for this post.
    Since DSA ads are based on your SEO index, you should always exclude irrelevant keywords. To name a few that are standard in every account : terms&conditions, complaints, second hand, craigslist etc.

    DSA is great for for instance B2B webshops that are not able to use Product listing ads, for sites with a lot of Job postings (if you have > 50) . DSA needs a congruent site structure without a lot of distracting pages. So if you are a consultancy and you have a lot of cases on your site with distracting titles DSA will go the wrong path. When you have a well structured site, my experience is DSA is a great option

    • Andrew Lolk

      I too were hoping for DSA to be great and I still believe that the idea behind DSA campaigns are solid, but in practice I’ve seen them fail time and time again.

      In the case that I mention in the post above it was all wrong though. As you mention, none of the necessary negative keywords were added and out of stock product/category pages were being included in the DSA index. Everything was going wrong.

      Other than that the website will be a great case for how to set up DSA campaigns successfully. My thoughts are to streamline the account and in a couple of months reintroduce an optimize DSA campaign to see if I can bring in some of the revenue from the former DSA campaigns. It’s still 15% of the total revenue I removed from the account overnight, so if I can bring back the same revenue, but without all the waste, the DSA campaign would be good addition.

  • Matthew Umbro

    Hi Andrew,

    Thanks for the great post. I agree that setting and forgetting Dynamic Search Ads isn’t smart and is similar to letting a Display Network campaign run without any targeting options.

    Personally, I’ve seen good (not great) results with Dynamic Search Ads. I think the perception is that DSAs are a great way to get a lot more clicks at a good price. The truth is that you should only use DSAs when you’ve covered most of your product inventory and want to catch the keyword stragglers, very similarly to how an All Products PLA campaign should work.

    Given a conservative budget and checked frequently, DSAs can net good results. By no means will DSAs be the magic bullet (nor should they be), but managed correctly you can see an incremental increase in conversions and revenue. Like you say, you can also find keywords to create new campaigns around.


    • Andrew Lolk

      Hey Matt,

      I’m glad you liked the post!

      You’re touching some important points. There are a lot of similarities with Display and PLA. The danger really lies in intermediate advertisers jumping on any new feature from AdWords without going through the necessary due diligence.

      I surprisingly see this happen more in older accounts than in new accounts. The managers of older accounts have lost touch with how it is to optimize a brand new campaign instead of just maintaining current campaigns making them ineffective in utilizing new features from Google.