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AdWords Data Indicates Dynamic Search Ads Likely to Play Small Role for Bing Ads

At the beginning of October, Bing rolled out Dynamic Search Ads (DSA) to all advertisers across the US and UK. This keywordless format operates by allowing Bing to crawl an advertiser’s website to determine relevant queries the advertiser may want to bid on.

Brands can create separate targets for different categories of a website, and set bids as well as some aspects of ad copy for each category. Headlines and landing pages are dynamically generated by Bing.

DSA campaigns have existed in Google AdWords since 2011, so we have a lot of historical data to draw from in estimating the potential boost to Bing Ads that might come from these campaigns rolling out across the US and UK. In the big scheme of things, the impact is likely to be fairly small.

DSA Accounts for Only a Small Share of Google Text Ad Spend

Since the beginning of 2016, DSA share of Google non-brand text ad spend for Merkle advertisers has declined slightly, down to about 6% in Q3 2017.

Google DSA Non-Brand Text Ad Spend Share

Nearly all advertisers add brand negatives to DSA campaigns in order to ensure all brand queries trigger keyword-based ads, making DSA non-brand spend share higher than overall text ad spend share.

Now, Dynamic Search Ads do account for a greater share of non-brand clicks, as cost-per-click (CPC) of keyword-based non-brand text ads was more than double that of DSA in Q3. This is primarily due to DSAs producing a much lower revenue per click than keyword-based text ads, thus warranting lower bids. DSAs have a lower revenue per click for the vast majority of brands for a couple of reasons.

One is selection bias, as any top performing queries are likely already added as keywords for most well-managed accounts. While AdWords is supposed to prioritize active keywords over DSAs when triggering ads for an auction, many advertisers take the step of adding active keywords as negatives to DSA campaigns as well to force Google to use keywords for applicable queries.

In the early-goings of the product, Google recommended advertisers use DSAs as a method of uncovering queries a brand might want to add as keywords in order to ensure complete keyword coverage. However, over the last couple of years Google has actually begun recommending that advertisers allow DSAs to continue to handle any queries these campaigns uncover.

DSA Help Page Tip

This isn’t a good idea for several reasons, and most advertisers continue to add any well-performing DSA queries as keywords. This is likely how most advertisers will approach Bing Ads DSAs as well.

In addition to selection bias, DSAs also have a lower revenue per click as a result of some poor matches that can occur. Naturally Google can’t always pick the best possible landing page for a query, and at times can trigger ads for queries that are only tangentially related to a particular webpage. Advertisers regularly comb search query reports in order to identify any poor matches driving impressions/clicks and to eliminate those matches via keyword negatives. Bing Ads DSAs will be similarly managed.

Even assuming that all Google DSA traffic is completely incremental and that none of these clicks would be picked up by keywords if DSA campaigns were paused, the overall impact to Google ad spend is minor. Thus, we shouldn’t expect too much of a lift to Bing spend as a result of this update.

This is even more evident when considering the rise of Bing Product Ads, which accounted for 37% of all Bing Ads non-brand clicks for retailers in Q3 compared to just 27% last Q3. As DSA only stands to impact the reach of text ads, the impact on overall spend including product ads will be even smaller.

It is possible that Dynamic Search Ads will play a bigger role on Bing than they have on Google, but at this point there’s no reason to expect hugely different adoption. Brands should still look to take advantage of these campaigns in order to find holes in keyword coverage on Bing specifically, but most should expect only modest increases in traffic and spend.