When you first set out to create your Adwords campaign its important not to go "keyword crazy"---- Resist the temptation of creating long list of irrelevant and generic keywords. For example you run an automotive dealership website. It would be inappropriate for you to target the keyword "BMW". The CPC cost per click for such a generic keyword would be incredibly high, compared to a more descriptive and relevant keyword, such as "BMW 745Li long wheel base"

Don't make your keywords too general. In this case they bring a lot of traffic, but hardly any conversions, because the traffic is not well targeted, and as a consequence your ad is badly distributed.

Similarly if you used the keyphrase "tail light covers" it wouldn't produce any conversions assuming you stricktly conducted automotive sales only. The phrase might bring visitors to your site, but if they don't find what they were looking for when they get there, they will leave just as quickly as they arrived.

Its very important that you identify your specific niche and to market directly to users who want the products and services that you are offering. Don't trick yourself into thinking that broader is better. With Adwords that's just not true.

More on improving your keyword targeting skills.

Unless you take advantage of the phrase matching options by using the tools offered at W.A and adwords alike makes available, chances are that you are missing out on potential customers and creating a higher CPC for yourself. Broad matches are usually less targeted than exact and phrase matches. Broad matches is the default option under which your ad will appear for expanded matches such as plurals or relevant keyword variations.

When you utilize phrase matching, your ad will appear for your chosen search terms in the order that you specify, and sometimes for other terms, too. Exact matching is by far the most targeted option to use, so don't neglect it! You ad will appear for the exact keyword you specified. The negative keyword option is also a great tool -- it allows you to specify the keywords for which you don't want the ads to appear. Here's a quick example of how these targeting options work:

Here is an example of what you could work with.

• Broad match: Default option: espresso brewer
• Phrase match: Surround the keyword in quotes: "espresso brewer"
• Exact match: Surround the keyword in square brackets: [espresso brewer]
• Negative match: Place a negative character before the keyword: -espresso brewer
• word stemming and misspellings (espresso, nespresso,esspresso. etc.)
• discover synonyms (espresso maker, espresso brewer)
• figure out different punctuations (espresso machine, espresso-machine, etc.)
• do not limit your search to one word phrases; find two word phrases, three word phrases, etc

Do not limit your search to one word phrases; find two word phrases, three word phrases, and so on etc also think about specific problems that can appear related to your business; use them as keywords (espresso machine repair).

Take the time to test these different matching techniques, and to tweak your selections to improve your conversions.