Since I'm working on Ad groups today; I though it would be nice to share a little insight into this complicated/not-so-complicated world of SEM Ad groups. What is an Ad Group? In Google Adwords text and image search keywords are arranged by up to 25 campaigns, 100 ad groups per campaign, then hundreds or thousands of keywords.
Ad group names should express the idea of a group of keywords a user maybe searching for. An idea is generally expressed in the form of a set of nouns that make up key phrases. An idea key phrase is when a set of keywords can be accurately encompass a variety of similar keywords. In this case the term keywords would be inside that key idea to target industry jargon relating to a key phrase. Now in case your completely confused I'll use a simple analogy to explain. Pretend that I am a librarian and need to arrange lots of books (or keywords) and all the books need to be in categories like fiction or history (this would be my campaigns). Now all of the books in their categories also need to be alphabetized to be filed properly and easy for users to find (this would be the ad groups).
Bottom line is be granular in your online sem campaigns by breaking things up logically into groups and have your copywriters make ads that match closely to keywords in each group. If you do it properly it is a lot of work, but an unstoppable super machine for attracting and targeting customers. In the end it will require less maintenance than a lazy campaign. So this is a perfect job for all of you type A's who love to be super organized with sensible labels on everything!
So what about overlap? You can add the same keywords or phrases into different ad groups or campaigns (which is nice since different groups have different text ads). On the other hand if you sell eight different products that are all relevant to the same keywords, you can't have eight of your ads showing up on the same page of the search results. It's called double serving, and is against AdWords terms of service. So, in the case of overlap (same keywords in different ad groups/campaigns) AdWords will choose to show a single ad from your account corresponding to only one of the keywords or phrases. This can cause problems when you want to lower specific campaigns daily spending (and then another campaign still runs it at a higher price). Which is why it's not an exact science and is generally best avoided if you want to be in control of your advertising (because you never know which ad would be showing up). If you already made this mistake (on a large scale especially) best advice is -- pause multiple campaigns until you can determine what is working the best. In short-- keep your campaigns clean.
Next step to ad groups? Determining which text/image ad works best with your newly defined keywords. Targeting your copy to closely relate to those ad groups will ensure better click through rates, but that is for another blog post and another day at Risdall.