Google's Dynamic Search – Capturing Search Market Share At Affordable CPAs

Google’s Dynamic Search Ads (DSA) is a great complement to AdWords accounts with large, complex and/or frequently changing product offerings. When combined with a rich keyword structure, DSA can be another valuable tool in your marketing optimization toolbox. I like to think of DSA as an additional match type with the added capability of content targeting.

For starters, DSA helps solve the persistent issue of low search volume keywords. Google specifically states that they will remove keywords from auctions where low search volume exists, re-evaluating weekly for increased demand. While these keywords are inactive, you’re losing the chance to serve for potentially valuable lower funnel queries. Furthermore, depending on your negative keyword implementation, you may have removed yourself from the market for this query altogether. In practice, we have found that Dynamic Search does an excellent job targeting and converting lower funnel, long tail queries.

For one retail client, we found an average of 78% of DSA conversions were the result of low funnel, long tail queries.

DSA is a more cost and time effective way to manage keywords with typical retail SKU type attributes like color, voltage, size, weight, fabric etc. DSA, when implemented correctly (corresponding negatives, bid protections, etc.), is very good at capturing these low funnel queries. This has major implications for Google AdWords accounts requiring this level of coverage.

Consider a modified broad match keyword set consisting of keywords like +Red +Widget. Ensuring coverage of all long tail, lower funnel queries like “[widget maker] 123456 v4.201 2.2Hz prices” would require both bid boosting to limit rank loss and budget expansion to accommodate additional clicks. This approach can be costly, considering such a large reduction in rank loss impressions is often not profitable from an ROAS perspective.

One situation we came across for a similar type of keyword set would have required an estimated $30,000 in incremental budget to fully fund all query coverage. Instead of taking this approach, we chose to be more tactical. We built and optimized a keyword set to capture impression share on upper-to-mid funnel queries, layering in DSA to capture the lower funnel queries.

The result was a 95% discount in cost compared with the 100% impression share strategy, and the successful capture and conversion of low demand and unique queries.

Following the previous example, it’s clear how capturing low demand and/or long tail search queries by pursuing 100% impression share on a number of keywords across match types can lead to inflated a cost-per-acquisition (CPA). Because DSA uses Google’s organic technology and serves on a basis of relevance and bid, we’ve observed very precise targeting of lower funnel queries while avoiding the low search volume and inflated CPA problem.

In our example, capturing lower funnel queries using DSA led to an 80% lower CPA when compared with the estimated CPA at 100% impression share.

Another well documented benefit of DSA is the access it provides to valuable search query data. Traditional search query data is limited to your current keyword coverage. Since DSA serves based on your website’s page content, it can provide a proxy view into organic search terms.

The analysis of DSA query data is very important in order to keep a DSA program efficient, lean, and targeted at low volume terms as well as to improve user experience. By analyzing and parsing DSA search queries, high-volume core terms and modifiers can be identified as candidates to purchase outright in a keyword buy.

It has been our experience in this example that managing upper funnel queries with DSA can lead to degraded user experience. When there is an extensive product offering and a tremendous number of landing pages, DSA often fails to provide the optimal experience for upper funnel queries.

Going back to our red widgets, think of DSA’s ability to target the query “great red widgets.” Although we do have the ability to control portions of the ad copy by segmenting parts of the site into ad groups, our control over the messaging is still limited. Though we might like to test an ad highlighting our breadth of widgets and a strong call to action, there will inevitably be instances of generic ads served for widget-specific queries.

In terms of landing page experiences, we have very little, if any, control. While we might like to test sending these customers to a higher level page that describes our red widget offerings, DSA might send customers straight to one specific red widget. Because of the lack of control over user experience in this example, we prefer to segment these queries into a traditional search campaign structure where A/B testing can determine the best user experience.

In summary:

  1. DSA is great for AdWords accounts covering an immense number of products, which, if targeted through keywords, would have low search volume.
  2. In some situations, DSA can help lower the CPA for low volume queries compared with conventional methods focused on capturing a high percent of market impressions.
  3. DSA search query data analysis can provide a wealth of insights into evolving user search habits and behavior.  
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