There are four different match types in Adwords: [exact match], “phrase match”, broad match and – negative match. Exact matches will only display your ads when users are searching for the exact keyword. For example, if you bid for an exact match on [pink cupcakes] it will only display your ad when someone is searching for exactly “pink cupcakes”. Phrase match is when a user searches for a phrase that includes your keyword such as “pink cupcakes for sale” or “pink cupcakes recipes”. Broad match is when a user search for query that includes one word from your target keywords such as “cupcakes are delicious” even though you have set the broad match keyword to “pink cupcakes”. There is also negative match which will exclude your ads from showing up for users who may have searched for something you don’t want to target. For example, if you have a cupcake business and you want to target people who will buy your cupcakes you can exclude the word “recipe” so users who are looking to bake their own cupcakes won’t see your ad.
Exact match keywords will have the most efficiency because it targets users you really want but has less volume of searches. Phrase match keywords will have more volume but will be less efficient than exact match keywords. Finally, broad match is the least efficient but has the most volume.