So what's the deal? What's the benefit of using all 3 matches exactly? Do you get a higher position, CTR, or what for your AdGroup?
You get to know stuff which you wouldn't know normally know. For example,
red widgets --->(1000 impressions)
[red widgets] --->(300 impressions)
"red widgets" --->(500 impressions)
So only 300 surfers are typing the exact keyword. 500 impressions were recorded because surfers typed in "red widgets something". 1000 impressions were recorded because surfers typed in "red something widgets".
You can use this information to further optimize your campaigns. If you happen to discover the keywords that surfers are typing in, you can modify the ad copy to get more clicks. You can discover these keywords either by using Google/Overture keyword suggestion or by checking your logs.
Reason #2:
The assignment of keyword status (at risk, slowed, disabled) would be delayed since the impressions are split between the three variants of the keywords. This can be very useful if your keywords are not getting good CTR.
Reason #3:
Exact match keyword might have higher conversion rates (generally it does). So you can assign a higher CPC for [red widgets] and lower CPC for "red widgets" and red widgets.
As with so many things, the "right" answer can be very individual - and it seems to evolve for each advertiser over time, depending on his or her actual situation.
I personally agree with you that it is usually best to be as targeted as possible. And it is the aim of the AdWords program to provide advertisers with a variety of tools and options to allow them to be targeted in the way that works best for them.
I'm endlessly fascinated to see the discussions in the forum, regarding how best to use these tools/options in the pursuit of the best ROI.
AWA