Make a tight group of specific keywords all in the same theme that don’t deviate too much. Your list may be only 5 or less words for one adgroup. Make them broad match.

So if you’re selling karaoke machines your adgroup may be, “iPod Karaoke” with keywords like “karaoke machine with ipod dock”, “ipod dock karaoke machine”, “ipod karaoke”, “karioke ipod”. Then once the adgroup has ran for a couple days run a search query report. This report will allow you to discover all the keyword variations that triggered your ads and give you lots of inspiration for expanding your campaign with more adgroups and keywords, as well as all the keywords that you don’t want your ads showing up for which you can add as negatives. So with your search query report you may discover lots of searches for “portable karaoke machines”, “karaoke systems”, “black karaoke ipod system” and “karaoke modules under $25.99” which would all make for great new adgroups with targeted adtext and landing pages.

Not only will this keyword strategy give you ideas of how to expand your keywords, it will also give you insight into how much these new keywords will cost if you started to bid on them seeing how you can see their avg. cpc in the report. You may stumble upon a few words that fit just right and are cheap.