Hi Cheryl,

First off you can either bid at the ad group or keyword level. Keyword level is more granular and might be the better option since all keywords are not created equally…

One thing that you should make sure you also pay close attention too is the number of keywords in an ad group. There is no magic number, but in my experience 100 keywords in an ad group is too many. If you design your campaign and ad group structure for Quality Score you should make sure that your keywords are relevant to your text ad. One way to do this is to write your ads (preferable three to four ads to start) and then build your keyword list. The only catch here is that your ads should all be targeting the same product or service otherwise your list of keywords will become less relevant. And when that happens Quality Score will be low and you will be paying more for your clicks.

A couple years ago Google set me the follow slide that lays all this out – basically showing you an example of a poorly targeted ad group all the way to a highly targeted ad group. The more highly targeted your keywords to the text ad to the landing page, the better.

http://www.semscience.com/wp-content/uploads/2008/02/slideoncampaign_structure.ppt

Once you get a handle on that we can talk about how to bid by Match Type…