Dynamic Keyword Insertion - DKI
Interested in making the management of your pay-per-click advertising campaigns easier and that effort more fruitful? Of course you are, so let's look at Dynamic Keyword Insertion (DKI).
DKI enables advertisers to insert the exact term a searches uses into the ad itself. Keywords are most often inserted into the title but can also be inserted into the description, making quick work of managing your campaign. There are also a few other noteworthy benefits in addition to simplified administration. Advertisers using DKI typically receive higher click-through rates, and as such utilizing this method carries the potential to improve quality score which means you could end up paying a little less for PPC traffic.
DKI titles won't stand out if most of your competitors are using them. If that's the case, differentiate your ad from competitors by not using DKI and perhaps just focus on working on the ad creative itself. DKI is also not appropriate for longer keywords. Google's Adwords will replace long search terms with default text. The ad hack tends to be most effective when phrase match is used and when individual keywords vary only slightly (e.g. blue shoe, red shoes, white shoes). In essence, DKI works well when your campaign requires a long-tail strategy.
Learn more about dynamic keyword insertion at Google.