Are you suffering from a lower CTR recently? Have your conversion rates declined? Have your impression rates declined, or suddenly boomed? I think I know why. Here’s a simple description of the problem that Google has caused. At some point (I don’t have an exact date and I’m still digging through client logs) Google changed the basis on which adverts are shown. Until this change, Google would look at what the user typed in a search query, and deliver adverts where the advertiser had selected a keyword that matched the search query. Google has not announced that they are now doing Search History Permutation. After the introduction of the Search History Permutation, Google takes all the words in the previous search, and all the words in the current search, and jumbles them to make new search queries. The result is that adverts mix relevant results and bizarre conjoined researches - even if the series of searches conducted by a user are related, the result of permutation can deliver completely irrelevant adverts. This is not AdWords, as I’ve used it from 2004 to 2007. This is a different AdWords. It is less effective. It is more expensive to use. It is less under my control - I can’t find any simple way for advertisers to prevent appearing on irrelevant search queries.
Personally, I stopped using broad match when it changed to expanded match as too many of the queries were entirely irrelevant - as fast as I was adding new negatives, the range of new queries that I was getting that were based on far-flung 'synonyms' just got broader and broader (e.g Chinese shoes does NOT mean the same as Japanese toys). I know it's common practice to recommend people start with broad match as a research method, but I don't think most people starting with adwords know what expanded match means - that it WILL generate impressions for phrases that are not in your keyword list. I didn'y know about Search History Permutation - I remember that not long ago Google were introducing an even broader matching system, which I've forgotten the name of. It makes a nonsense of their Quality Score system, when they can 'penalise' the advertiser by cost for not being what they deem as relevant, then decide that they will show ads for keywords you've not chosen.
I recommend never using broad or expanded matching. It's throwing money away now. Stick with exact and phrase only.
They have clearly stated that they take the previous query into account when determining what ads to show. When this happens it has zero impact on your quality score. Never? I'd have to say that's bad advice. When used correctly broad match is a very effective tool. It's actually more effective now than it ever has been.