Large ad groups can negatively affect your performance. Poor performing keywords drag down the Quality Score (QS) of better performing keywords in the same ad group. This ultimately impacts impression share and raises click costs.
QS helps determine your actual Cost-Per-Click (CPC). Google assesses the relevance of your keywords, ad text, and landing content, as well as the click-through rate (CTR) of the keyword and ad group. Optimizing an account can be difficult to do with ad groups that include too many keyword themes. To help keep QS up and CPCs down, you will need to draw as straight a line as possible from search query to keyword to ad copy.
Try distributing keywords into smaller, more tightly focused ad groups. There is no “magic” number of terms per ad group, so organize keywords into new groupings based on logical themes. For automated assistance, use the Keyword Grouper tool available in Google’s free Adwords Editor, which can identify keyword themes, create ad groups, and copy existing keywords and ads into them.
Once tighter ad groups are developed, write ad copy focused solely on the keyword themes that include the keywords in the ad group. More specific ad text attracts a more targeted audience.