I have lots of competitors that sell lots of varieties of widgets. Rightfully, they use 'widget' as a keyword. Now, I only sell round blue widgets, and I'm the only advertiser that does.
I use 'round blue widget', but if you search for that, my competitors come up first because they have a higher CTR x bid, even though my keywords better match the user's search.
Can anyone think of an example where this would not lead to increased relevancy?
Does a difference exist between the broader match and exact match?
I am assuming that when you ask this, you are referring ad's position relative to your competitors. Right?
If so, then the answer is that position is always determined on the basis of your keyword's CTR as compared to your competitors, and your Maximum CPC as compared to your competitors. These two factors are weighted equally.
Over time, your carefully targeted keyword is likely to develop a higher CTR, as users are more likely to find the ad relevant, and click. It'll tend to move up the page as a result.
Likewise, over time, your competitor's more general keyword is likely to earn a lower CTR, and move down the page.
So, in this sense, relevance is measured and does affect the results.
AWA