Hello, I am completely new to Google AdWords program and I have the following simple question: Why do AdWords' advertisers use so many keywords? I have seen some using x,xxx - xx,xxx (many thousands) of keywords! Why not to use only the top 5 or say the top 10 relevant keywords? For example: If I had an AdWords campaign for a paid online games site, what would happen if I run that campaign only for the keywords: paid online games online games paid games Just three keywords! I think that would be more than enough! Am I missing something here? Thanks!
In terms of traffic it may still be quite similar if you only use a few broad match options, but if you can list a wider range of exact match options instead you will get a higher CTR for each keyword which will lower the price of your bid. The CPC and positioning is calcualted by the quality score of your ad and CTR of the keyword as well as the bid price. Does that make sense?
Make sure you use the google adwords traffic estimation tool. It will give you a more accurate and much lower estimation of how much traffic you will get than the wordtracker tool. For example, the adwords keyword estimator told me that with the top bid in google (for funny t-shirts) I could only get 193 - 241 hits per day but wordtracker says that 1,162.0 search for the keyword phrase on google. With only 193 hits a day a funny t-shirt site with inventory and overhead would go bankrupt, so they need as much traffic as they can get and they can only get that traffic by bidding on a lot of keywords. Sure 1,162.0 (wordtracker) would be much better but that's inaccuarate for an adwords campaign and that's the reason why I would need to bid on a lot of keywords.
Google also orders advertisers to maintain a certain (or above) CTR to ensure their adverts are not filled with pointless and trafficless keywords.