I've seen our conversion rate increase a good 50% over last years numbers, over the same time period. Over the past few weeks, I had come to the point that just about every adgoup was getting very targeted traffic...I couldn't find much to add as a negative, and all the queries the report was showing were looking good.
Then, during the week before Christmas (long before our shipping cut-off)...our conversion rates started to dump. When I ran new search query reports, I am suddenly finding some pretty lame 'mistakes.' I guess I can't give exact keywords and stuff, but it's like someone searching for "golf putter," and even though you're already bidding on "golf clubs," google shows your ad for baseball gloves.
It could be that my slight bid increase to some adgroups is causing the broad match to favor the higher bid adgroup. My google rep says "it's because if you're bidding higher in one adgroup, the system will think that it is more important to you, and will favor it." OR....the expanded broad match doesn't work as well as it should, and oh gee, it instead just shows one of my high CPC ads....that's funny...even if I'm bidding on "golf putter," and someone searches "golf putters," broad match often misses the plural and shows an ad that costs three times as much for a click.
I don't see why it's so hard for this system to understand that "golf putter" is more closely related to "golf clubs" than it is to frickin' "baseball gloves."
Our conversion has dropped, we think, partically as a result of this. However, our spending has increased by 65%. And all this happened around the timeframe you are talking about, and has been this way since.
UPDATE: We just noticed, we think, that our 2 word combination phrase in broad match is being broad matched individially for each word in the phrase. For example, if our phrase is 'Blue Widget'. We think that Adwords is individually broad matching 'Blue' and individually broad matching 'Widget'.
I can't figure out why the expanded broad match can serve up my ads on some totally irrelevant keywords (as shown by the "detailed keywords in Adwords" filter in Google Analytics, where it shows what the user actually typed in) and yet is dumb enough to think that 'widget' and 'widgets' are such totally different concepts that one has an OK quality score with a minimum bid of 20 cents, and the other has a POOR quality score with a minimum bid of $1.00.
I really hope someone from Google is seeing this & they do something about fixing their QS algo. I have had similar problems too, in many of my adgroups "blue widgets" will have a Great or OK quality score, whereas "bluewidgets" will have a poor QS. It is high time google fixes such obvious errors.
a search query of "golf putters" misses my keyword "golf putter," and instead my "silly putty" keyword is showing.
...add the fact that when this happens, the adgroup that is "picked" by adwords is ALWAYS more expensive (and almost always substantially more) than the adgroup that should have shown an ad.
if you don't think something is shady here...you must be missing something.