With the help of matchtypes in Google AdWords, One can target multiple search terms using a few keywords. This begs the question, which matchtype one should use in an adwords campaign.
Most commonly heard strategy is to use Broad match keywords since these keywords will also trigger ads for phrase and exact searches also. This however is a sub optimal strategy. if you look closely in your account, You will realize that conversion ratio from different matchtypes of the same keyword is vastly different from each other. ideally you should bid differently for exact, phrase as well as broad to ensure best utilization of your advertising dollars.
My recommendation would be to create separate ad groups for exact, phrase and broad keywords and track the performance separately. This will help you to set appropriate bids based on performance data.
Creating separate ad groups will not completely ensure that the performance data is measured correctly. Here is how you can track the performance of different matchtypes exactly and avoid any internal competition