There is an ongoing debate amongst SEM experts as to how to best segment your PPC accounts, and columnist Aaron Levy illustrates his process with a handy flowchart and an excellent research article:
One of the most common and difficult choices you’ll make when managing an SEM account is deciding when to segment keywords. Any search manager worth his or her salt knows that segmentation is key to PPC optimization, but what’s the best rule for how granular you should get?
There are a few different camps on this. There are the long-time advocates of Single Keyword Ad Groups (team SKAG), and even the occasional Single Keyword Campaign. Then, there’s the nearly decades-old “1,000 searches rule,” wherein if you expect a keyword to have more volume than 1,000 searches a month, it needs to be segmented, regardless of messaging. Some people (myself included) religiously believe that match types should be segmented by campaigns, while some simply smash everything together.
Regardless of keyword segmentation strategy, most managers rely heavily on a hybrid of bid portfolios and engine bid modifiers to take care of performance nuances for us. A little ironic, no? We were (and still are) collectively incensed that Enhanced Campaigns hampered ability to segment devices. “They’re taking away our control,” we screamed and blogged. Yet for some reason, we wholly embrace bid modifiers to take care of everything from audience to geo to behavior.
My issue with bid modifiers is simple: They don’t move budget, and they don’t change messaging. To do that, you need to segment intelligently to ensure you’re making the smartest decision with every dollar invested.
To help with the process, go through a decision tree with each keyword and customer segment. The tree below only has two major segmentation decisions you have to make: Is there a significant performance delta (Does it have a big enough difference to matter?), and should messaging be different?