From the BlogSubscribe Now

Single Keyword Ad Groups and Adwords Quality Score

The best way to make your ad copy as relevant as possible to the keyword is to have only one keyword in the ad group or a Single Keyword Ad Group (SKAG).    Google’s suggestion is to have up to 20 keywords in an ad group all related to one theme.  The problem with up to 20 keywords is how to make the ad copy perfectly relevant to all keywords.

“The more relevant your ads and landing pages are to the user, the more likely it is that you’ll see higher Quality Scores.” and  “Higher quality ads can lead to lower prices and better ad positions.” ~ source Google’s Quality Score Definition

Google needs visitors to click on ads, an ad with a high CPC bid but poor ad copy for the keyword is less likely to get clicked and will be given a lower quality score.

Quality score for ads should increase when the ad copy is focused on a single keyword because the expected click through rate will be higher.

The next step is improving your landing page to convert that visitor from Adwords into revenue.  If your landing page converts at 1% and you are paying $1 per click for Adwords, then you need to spend $100 to get one sale.  If your landing page converts at 5% you only need to spend $20 to get one sale.