Update: Clarified AdGroupType values introduced in v201705.
Update 06/22/2017: Clarified information in last paragraph.

Starting this week, users of the new AdWords interface will be able to create dynamic search ads (DSA) through the new dynamic ad group type in Search campaigns with Dynamic Search Ad settings. This has some consequences in the AdWords API as described below.

How does this impact the AdWords API?
If your managed accounts are eligible for the new AdWords interface, be aware that if users create dynamic ad groups in the interface, AdGroupType values for the dynamic ad groups will be returned as SEARCH_DYNAMIC_ADS in v201705 and UNKNOWN for earlier API versions. Here are the rules applied to the dynamic ad group type: As described in this guide, to create dynamic search ads in the AdWords API, some settings and criteria are required, such as WebPage and DynamicSearchAdsSetting. These settings can still be added and modified in the dynamic ad group type.

What should you do?
If your application manages accounts that have access to the new AdWords interface, or if you have ad groups with type SEARCH_DYNAMIC_ADS for v201705 and UNKNOWN for earlier versions, ensure that you properly handle these cases by: In addition, for v201705, you cannot add features related to Dynamic Search Ads to ad groups with AdGroupType of SEARCH_STANDARD. Examples of Dynamic Search Ad features include the Webpage criterion and ExpandedDynamicSearchAds. However, for the earlier versions, ad groups with AdGroupType of SEARCH_STANDARD are not affected by this change. You can still continue adding expanded text ads, dynamic search ads, call ads, and various criterion types to them.

As always, if you have any questions, please post on the forum.