I am setting up an Adwords account for a software developing company. This is a B2B campaign and the solutions they offer are very specific, so it's not a questions of posting "red shoes" ads, but rather "white-label *** software" or similar complex queries.
My question is: How can I determine that fine line between making my keywords too generic (I don't want to bid for "software") and selecting keywords/phrases that are so narrow they barely get any search volume?
It's the first campaign I set up from scratch and I struggle with determining the best keywords, the optimum budget etc.
If your tracking is solid, test, see what works. In the situation you've described, the loosest I'd go is Modified Broad match (but I'd use Phrase and Exact and let them be low volume if they turn out that way).
Mine for hundreds, if not thousands of negative keywords.
Dig into Analytics as if you're life depended on it (my livelihood does).