When working with an Google Adwords campaign, you will need to have at least one Ad Group in the campaign. There are several advantages to having ad groups in a campaign. Each of these ad groups can in turn contain several keywords and multiple ads in them.
Ideally, you should have several keywords and matching ads in the same ad group. It goes without saying that you will need to have at least one ad (and one keyword) for each ad group. You can have several hundreds of ads per ad group but that does not mean you need have all of those at the same time.
There is really no optimum amount of ads for an ad group. It will depend on the number of impressions you are generating for each ad and ad group in general. As a rule of thumb, I recommend that you have at least three different ads in each of your ad groups. There are several advantages to having multiple ads in the ad group.
Avoids Ad Repetition/ Ad Rotation
It is quite possible that you will see customers performing the same keyword search (or slightly different keywords) over a period of time. It is a good idea not to show the same ad to the same customer every single time, especially as it did not convert the first time. There is a possibility that one of the other ads will convert better for this customer.
Furthermore, you can use the Adwords features such as ad rotation and frequency capping if you have multiple ads. You can set your ads to rotate more evenly thus ensuring that there is an equal ad coverage. Frequency capping allows you set limits on the impressions that are shown to an individual user over a period of time.
Works as Multi-variate Testing
You can never be sure if what you have is working at its best. There could always be an another ad that could perform better than what you currently have. There is no other way to find that out unless you create multiple ads and then test those ads against each other.
Having multiple ads in the same ad groups allows Google to display different ads and find the best performing ad.
Use of Keyword Variations
It is quite possible that you have several keywords in this ad group. Ideally, they will all be closely related and be semantic variations of each other. If that is the case, then it is impossible to create a single ad that captures all variations of the keywords. You should create several ads that could be similar but uses the different variations of the keyword.
Another option is to use the dynamic search ads.
Better Ad Performance
It is not uncommon to see that certain ads perform better on certain days of the week or at different times of the day. It is therefore better to have several ads to cover all of these variations. If you already know which ads perform better and when then you can use the ad schedule to further optimize them.
Different Ad Types
Google Adwords allows you to have different types of ads, other than the text ads. You can have image ads, dynamic search ads, mobile ads, rich text ads etc. You should have multiple ads for each type of ads to better optimize the return on investment.
Different Ad Sizes
If you use different type of ads, such as image or rich text ads then you should have several ads in different sizes. This is true especially if you advertise in the display networks in addition to the search network.
I usually run around 3 to 4 ads per ad group. That seems to work best for most clients as well. I don’t recommend running more than 5 ads per ad group unless you have a huge budget and also a large number of impressions (say more than 1000 impressions per day) for the group. If you have that many impressions, you should split that ad group into multiple or several different ad groups.
I usually give the ads enough time to accrue at least 1000 impressions. You can select any number as your target or threshold depending on the total impressions you get per week or month. You don’t want it to be too high that it runs for ever to get to the threshold, but you don’t want it to be so small that it is statistically irrelevant. I also like to run multiple ads simultaneously for at-least for a week or two in addition to the restriction on the number of impression.
Once you have enough data for your set of ads, look for the ad that is performing the worst among the lot. Try to figure out why it is performing worse than the others. You can only make an educated guess and won’t know for sure but that is ok. Now add a new ad into the mix that replaces the worst performing ad. Try to fix the issues with the old ad that you have identified. You can now delete the ad that was the worst performer. Now let the ads run for another couple of weeks before repeating the process.