If you use Google Adwords to market your products or services online, then you should have at least heard about Adwords campaigns and ad groups. Each campaign in your Adwords account is composed of at least one ad group, and quite possibly contain multiple ad groups.
An Ad Group can be defined or viewed as a logical combination of a set of ads and a set of keywords. Ideally an ad group will contain one or more keywords and one or more ads that are appropriate to those keywords. There are no definite number of ad groups that you should create, other than that there should be at least one in a campaign. Google allows up to 20,000 ad groups per campaign so it is very unlikely that you will hit the limit anytime soon.
Although there is no strict rule about how you should create your ad groups, one rule of thumb to follow is that every single Ad group is related to a single theme or idea that you want to market. This theme or idea should be very specific and highly targeted to a single product, service or a target demographic group.
There are several advantages of having separate ad groups. The most important of them being that it offers a greater amount of control over many of the important factors affecting your marketing including the overall budget, ad relevancy and keyword grouping.
Shared configuration and bidding
Grouping of Ads and keywords into ad groups also provides some common functionality and options, such as the placement settings and targeting method that are shared by all the keywords with in the ad group. This allows for easier managing of the keywords as well as the campaign in general. Along with these common settings, you can also specify a common or default bid for the keywords.
There are a couple of different default bids you can set depending on where exactly the ad is getting displayed. The default bid is used across all search networks including the Google search pages, while the display network bid if set is used when the ads are displayed in the Google display network. The bid for each keyword within the ad group can be then further refined on an individual basis which provides a finer granularity.
Keyword specific landing pages
This allows the keywords to have an appropriate landing pages, as the ads that gets displayed for these keywords allows for a landing page that could vary between the ad groups. You can re-purpose your best performing ads to different ad groups by providing them different landing pages.
Control on your Budget
Managing your budget becomes easier as you can bid lower for low performing ad groups, or set lower budget for the whole campaign. This allows you to assign a higher percentage of your budget to high performing ad groups while working on increasing the returns on the low performing ones.
Easier Management of ads and keywords
Ideally the number of ads, keywords and hopefully your marketing budget will increase over time. Keeping them separated in different ad groups allows to manage and optimize them easier. This also makes the creation and maintenance of the ads easier.
Better Ad creation
Creating a better and relevant ads are now easier, as you are creating specific ads for only a (very) small set of keywords compared to a long list of them. Ads are now less generic, have appropriate landing page and is more geared to specific keywords.
Creating the “correct” set of ad groups will and should increase your click thru rate of the ads (Ad CTR) as it is now more targeted and also because there is better coupling and co-relation between the ads and the keywords. This can of course increase the quality score of your keyword thus leading to lower cost and better ROI.
Eventually there is no one correct way to setup your ad groups, create as many as you like that allows you to monitor them easily but not too high that you are overwhelmed and that it becomes unmanageable.