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A few additional thoughts on picking keywords - beyond relying on keyword tools:
* I'd say that a small group of carefully targeted keywords are far better than a large group of un-targeted keywords.
* Work towards a list of quality keywords rather than trying to use as many keywords as you can possibly think of.
* If you feel like appearing on the content network, small (and carefully focused) keyword lists are better. I'd use no more than 50 per ad group, where all keywords are about the exact same subject as the ad and landing page.
* In the overview I'd say that the 'right' keywords would naturally 'fall out' of what ever product or service you wish to advertise.
* Use your knowledge of that product or service, along with your knowledge of your potential customers to decide how they would search for what you have to offer. These would be your keywords.
* Also, look at your landing pages for your ads. These too should be full of potential keywords, since those pages should naturally be about whatever product or service the ad refers to.
* You may want to 'Mine for keywords' in the natural search results. Search on an important keyword, and then see if any excellent variations jump out at you as you quickly look through the first 50 or 100 search results.
* Also look for 'negative keywords' as you mine the search results. Negative keywords are very important to the success of your campaigns (in my opinion) if you are using broad or phrase match, as they prevent your ad from being seen by users who are looking for something that you don't offer.
Here are a couple of links to content from the resources available on the AdWords site that talk about creating keyword lists:
This page offers many basic tips that I think are essential to advertising successfully with AdWords - including picking keywords:
Tips for Success:
[adwords.google.com...]
And, on the page below, you'll find links to 22 topics related to improving ad performance, from both the AdWords Help Center and the AdWords Learning Center - including six on the subject of creating a keyword list:
Improving Ad Performance
[adwords.google.com...]
AWA
I like to split my broad match campaigns off from Exact and / or Phrase. I then keep an eye on these broad matches - with the new UI you can see what phrases are triggering your broad matches - if they're profitable then you can take them out and put them into your exact / phrase campaigns.
I've heard it said that if you have an exact match phrase and a broad in the same account then the exact will always trigger, but I don't know on this myself (anyone?). So, I usually then add the KW as an exact negative match in my broad campaign to make sure it isn't triggered there.
Eventually you'll get to the point where your broad match isn't profitable anymore, but by that point in time you should have got a lot of profitable phrases out of there
