Creating optimized keyword groups  is an integral part of achieving pay-per-click  success. WordStream offers intuitive keyword grouping tools  that enable you to effectively segment your WordStream account into Semantic Keyword Groups  that will perform well when transformed into Ad Groups .
This guide provides best practices for leveraging the WordStream tool-set to better segment your keyword database. In addition to the below suggestions, you can also reference The WordStream Workflow Best Practices Guide .
Feel free to skip ahead to the section of the guide that best suits your question or concern:
- The Keyword Grouping Process
- Initial Keyword Group Segmentation
- How Higher Keyword Group Specificity Leads to Lower PPC Costs
- Keyword Group Maintenance
- Keyword Grouping Workflow
By following a few simple steps, you can quickly create keyword groups  that will allow you to spend just a few hours a week grouping, optimizing, and further segmenting your keyword groupings in order to produce high-performance ad campaigns .
Keyword grouping best practices  with WordStream include:
- Segment By Business Driving Keywords - Identify the keywords that are most important and most likely to lead to profits for your company.
- Create Specific Keyword Groups - Group keywords into themes  surrounding highly specific key phrases, preferably with multiple terms.
- Break Up Bloated Keyword Groups - Don't allow your Keyword Groups to become "bloated": ensure that each Keyword Group contains around a hundred or so keywords.
- Continually Monitor and Segment Keyword Groups - Apply the above outlined recommendations continually; setting aside a few hours a week to maintain your WordStream account will help you to drive down costs while increasing the number of leads, sales or other conversion statistics you are hoping to improve upon.
In order to create Ad Groups  that will raise your Quality Score , effectively lowering your costs, WordStream offers AdWords keyword grouping  tools to help you strategically segment your PPC campaigns.
But a software program doesn't have the same domain expertise that you do. Only you or your client have access to vital information such as:
- Which products generate the most revenue for your business per sale.
- What terms is it important for your business to be associated with.
- Which keywords have people historically associated with your business; which phrases and ideas typically "convert" better for your business and within your advertising campaigns.
WordStream optimizes your campaign and automates away the more redundant tasks, effectively providing you with the expertise and "man hours" you'd be paying a search marketing firm exponentially more for, while putting you and your domain expertise at the wheel of your campaign.
So how do you apply all this domain expertise?
By informing your keyword group segmentation .
To strategically segment your WordStream account, first be sure the "All Keywords" folder in your account is highlighted:
This simply means that WordStream is showing you all the keywords that the software's keyword research and Web analytics  tools have mined for you.
You will now be able to view a list of all the keywords in your account by the amount of traffic they have driven to your site. You can view these keywords in either of two ways.
View a list of keywords, in the WordStream keyword grid:
Or browse by WordStream's graph of your keyword data:
However you prefer to browse your keyword database , the important thing is that you be on the lookout for high frequency key terms that are of vital importance to your business.
For instance, in the above example, we are utilizing WordStream to optimize a campaign for a site that offers Internet security products. As the in-house marketer, you may know that while spyware removal software drives a lot of traffic to your site, your anti-virus packages actually generate a lot more revenue per sale than your spyware removal offering.
In this case, you would want to dedicate more time and effort to building out your anti-virus Keyword Groups.
Now that we've chosen the antivirus key terms as our first area of focus, we can start to think about the best means of segmentation.
If you are just starting a new site or were unable to get a hold of your Web server log files or keyword analytics  data, you might not have the luxury of creating highly specific Keyword Groups right away; but eventually even the sparsest of initial keyword lists will be cultivated by WordStream's keyword research and actalytics tools .
Once you have a more robust keyword database (many customers will have an extensive list of thousands of keywords right off the bat), it is important to tightly segment this list.
This is the case because of the way Google determines your minimum bids  and ad position : an enormous chunk of your Quality Score (the rating system used to determine how much you pay for clicks in certain ad positions) is based on how relevant and closely related your Keyword Group is.
In order to ensure high relevance and close segmentation, we recommend that you create multiple keyword groups centered around keywords containing multiple terms, rather than a single group based on one-term keywords. Let's take a look at exactly what this means:
Double clicking on antivirus will segment the database so that only antivirus terms are returned. But this is insufficient, as we will have a number of antivirus terms and they will have only the word "antivirus" in common.
We can do better.
Having created an antivirus keyword grouping, we can now browse a specially created "antivirus" database with only terms containing antivirus. We can then spin off more specific variations, such as buy antivirus, top antivirus, etc.
If these groupings have a number of even more specific variations (buy the best antivirus, top antivirus software, etc.) we suggest attempting to delve even further down!
Ideally, you would create a number of keyword groups containing about 100 key phrases each, and every keyword group would be segmented by key phrases with at least two (and preferably three) "terms" (such as "buy antivirus software" and "top antivirus software"). This segmentation will provide you with:
- More Exposure - Ad position is determined by your ad's click-through rate (CTR) , and the relevance of your keyword and ad to the search term (among other factors). Ads are set at the Ad Group level, so ads that speak to closely related keyword groups help improve Quality Score for ad position.
- Lower Costs - Your minimum bids and minimum first page bids  are determined by your CTR and your Ad Group's relevance, so the closer the segmentation (which, again, enables you to create more relevant ads and improve CTR) the lower your costs!
Finally, the only thing left to do once you have strategically grouped your keywords is to set aside an hour to a few hours a week to dedicate to keyword group maintenance.
You want to attempt to:
- Monitor Large Keyword Groups - Keep an eye on keyword groups that are driving a lot of traffic to your site. Keyword Groups that are already performing well can often be broken down further to improve performance to an even greater degree. Again: try to keep keyword groups around or below 100 key terms per group.
- Look for Opportunities for Further Segmentation - Monitor your traffic driving Keyword Groups. WordStream will be introducing new keywords into your groupings automatically (thanks to the application's analytics tools) so be sure to keep an eye out for useful keyword variations.
A good trick for identifying new keyword variations is to take advantage of WordStream's intelligent sorting tools.
Having created a series of Keyword Groups upon set up, you can then monitor new high-traffic variations by first highlighting the "All Keywords" folder:
Next, select the "View only selected group" tab:
You will now be shown a list of only the ungrouped keywords in your account. This enables you to quickly view which terms are driving a lot of traffic to your site that you have yet to create a keyword group around.
Note that this process can be automated for you by utilizing your personalized keyword segmentation suggestions .
This same process can be repeated for broader keywords within your more important segmentations. Instead of highlighting the "All Keywords" folder, as we did above, you can simply highlight the "antivirus" keyword folder, to view all of the terms containing "antivirus" that WordStream has stored for you (the keywords that didn't fit into any of your already created Keyword Groups). Again, WordStream automates this process in the keyword segmentation dialog.
So, basically if you:
- Strategically segment your keywords upon account creation.
- Break up bloated keyword groups.
- Look for new keyword grouping opportunities within your more profitable keyword segmentations.
You can create highly relevant, highly effective Keyword Groups.
Learn more about how to best maintain and optimize your WordStream account with any of our WordStream Best Practices Guides:
- How to Identify & Filter Negative Keywords 
- How to Set up Ad Groups & Ad Campaigns 
- How to Create Optimized Ad Text & Landing Pages 
- How to Integrate WordStream with Existing Google AdWords Accounts Guide 
- How to Manage Bids Guide 
- How to Conduct Keyword Research Guide 
- How to Manage & Automate Workflow Guide