Let's actually go through how you would do create Keyword Groups
1. Grab your keyword list. In this case, I grabbed a keyword list from Top Search Terms for "coffee beans"
2. Go to Google and type in Keyword Cluster generator. There are 100s of tools that will group these keywords for you. They will group based on common words, etc.
3. Decide on which Keyword Group to launch and set it up in your pay per click. There are 2 approaches - make the entire Keyword Group Single Keyword Campaigns or target the few top keywords and then set up another PHRASE match to target the same list. This will effectively launch on keywords that have a shared Keyword Group.
Example of Keyword Groups:
Keyword Group: green coffee bean extract (5):
green coffee bean extract
green coffee bean extract powder
green coffee bean powder
green coffee bean
green coffee bean extract for weight loss
Keyword Group: coffee whole bean (13):
coffee whole bean
whole bean coffee
dallmayr coffee whole bean
dunkin whole bean coffee
caribou coffee whole bean
peaberry coffee whole bean
stumptown coffee whole bean
single origin coffee whole bean
starbucks whole bean coffee
camerons coffee whole bean
eight oclock coffee whole bean
bones coffee whole bean
allegro coffee whole bean