My tracking doesnt work with %20, so I only get the first word in my stats.
You said affiliate. So, is it your tracking, affiliate network tracking, or some kind of private partnership tracking?
I don't really care what is it, but in order for you to get the best answer, members need the right story.
Forget Google. As I said, that what you see is a standard.
In regards of dynamic insertion, as far as I know, that does not do anything super-duper. Dynamic insertion inserts keyword that triggered your ad to show, not the real query.
In other words, you could use your own coding with little help from Excel, as Channel01 suggested.
But, throwing away all of that for a second, it's really up to your tracking.
I see %20 in my variables all the time, and they regularly show in major affiliate networks' reporting.
So, what is "your tracking"?