There have been some sporadic reports of the Dynamic Keyword Insertion feature within Google AdWords has not been working. There is a good thread where AdWordsAdvisor sums up the reports at WebmasterWorld.
To be precise, there have been three threads about this subject so far this week, with two of them being started by the same person. Between the three threads this is where we stand:* Including this thread, three people report that they are having some sort of issue with Keyword Insertion.
* Also, three people report that it is working just fine for them.
Again, I have not heard of this as an problem elsewhere, and I keep my ear very close to the ground for emerging issues.
My best advice to those who are having problems is to contact AdWords support, and ask them to take a look at the account. Be sure to specify the campaigns and Ad Groups in question, and include a detailed description of what is (or is not) happening.
That said, I'll continue to keep my ears open.
Word for word. But what is really going on? WebmasterWorld moderator, eWhisper, has some ideas. He feels that there may be times when the dynamic keyword insertion function doesn't work, on purpose. The first example he says is when "an adgroup contains misspelled keywords." The second is when "an adgroup contains trademarked terms."
For now, there is no official word from Google on this. If you are having similar issues, let them know.
Forum discussion at WebmasterWorld.