Should I use phrase match or exact match for better ROI?

How phrase match and exact match work today (and why that changes the ROI conversation)

Phrase match is “meaning included,” not “words in a row” anymore

Phrase match used to be fairly literal, but the modern version is meaning-based. Your ads can show on searches that include the meaning of your keyword, even when the exact wording isn’t present, and even when the meaning is implied. Word order still matters when it changes the meaning (for example, reversing locations or flipping who does what to whom), but you should expect phrase match to reach a wider set of searches than many advertisers assume.

From an ROI standpoint, that expanded reach is a double-edged sword. It can uncover profitable long-tail queries you would never think to add, but it can also spend on “close enough” searches that look relevant on the surface yet convert poorly because the intent is slightly off.

Exact match is “same intent,” not “exact wording”

Exact match is still the tightest option, but it’s not strictly literal. Exact match can show on searches with the same meaning or same intent as your keyword, including close variations such as misspellings, singular/plural, reordered words with the same meaning, function words added/removed, implied terms, and (in many cases) synonyms or paraphrases when the intent stays aligned.

This matters for ROI because the biggest mistake I see is expecting exact match to behave like a hard filter. It’s better to think of exact match as your “highest control lane,” not a guarantee of perfect query precision.

One more wrinkle: which keyword actually serves when multiple could match

If you have overlapping keywords (common when you run both match types), identical exact match keywords get priority over other matches for that same identical search. After that, relevance and Ad Rank decide what serves. In practical terms, you can use exact match to “protect” your most valuable searches, while phrase match explores beyond them—but only if your structure and negatives are set up intentionally.

So… should you use phrase match or exact match for better ROI?

When exact match usually produces better ROI

If you define ROI as “most efficient cost per acquisition” or “best return on ad spend,” exact match tends to win when you already know what converts. It’s ideal for branded terms, high-intent service terms, and bottom-of-funnel product queries where the user’s goal is clear and you don’t want to pay to educate them.

Exact match is also your friend when you have limited budget, limited conversion volume, or a sales process where a small shift in intent drastically changes lead quality (think legal, B2B with strict ICP, medical aesthetics, high-ticket home services, enterprise software, etc.). In these cases, even a modest amount of “nearly relevant” traffic can tank ROI.

When phrase match often produces better ROI (yes, really)

Phrase match can outperform exact match on ROI when your market has lots of ways to describe the same problem, product, or service—and your account is mature enough to police query quality. Phrase match is often where you find the “hidden winners”: the converting search terms that you didn’t put in your keyword list because customers don’t talk like advertisers.

Phrase match also tends to do well when you have strong conversion tracking (including meaningful conversion values when applicable) and you’re using an automated bidding approach that optimizes to your actual business outcome, not just clicks. In that setup, phrase match becomes a controlled expansion lever: it brings in additional demand while bidding technology downweights auctions that historically don’t pay back.

The honest answer: ROI is rarely “phrase vs exact,” it’s “how you run each”

Two advertisers can run the same phrase match keyword and get opposite results. The difference is usually (1) how tight the ad group theme is, (2) how aligned the landing page is, (3) how quickly they mine the search terms report and add negatives, and (4) whether their bidding and measurement are set up to optimize for the right goal.

If you’re choosing only one match type because you want simplicity, exact match is the safer bet for ROI in most accounts. But if you’re choosing because you want maximum ROI over time, the best-performing accounts nearly always use both: exact to harvest and protect, phrase to discover and scale.

An ROI-first strategy that works in most accounts: protect with exact, expand with phrase

Build a “two-lane” keyword system (without drowning in duplicates)

Start by separating intent first, not match type. One ad group should represent one clear intent (for example, “emergency plumber,” “water heater installation,” “tankless water heater repair,” etc.). Then, within that intent, use match types to control risk.

A practical approach is to run your proven, highest-value queries on exact match and your exploratory coverage on phrase match. Phrase match is where you’ll see new profitable wording patterns; exact match is where you lock them in once they’ve earned their place.

Use the search terms report as your ROI control panel

Your search terms report shows the actual searches that triggered your ads, and it also indicates how closely those searches were related to your keywords via the “match type” classification in the report. A key nuance: that “match type” label in the report can reflect how the search term related to the keyword that triggered the ad, and it may not mirror the match type setting you chose for the keyword. This is one reason advertisers get confused when they think, “But I’m using exact match!”

For ROI, the workflow is simple: promote winners and block losers. When you find a search term that converts profitably, add it as an exact match keyword (so you can bid, message, and budget around it). When you find a search term that spends without converting—or converts but with poor lead quality—add it as a negative keyword at the right level (ad group, campaign, or account-level) so you stop paying for it.

Critical guardrails to keep phrase match profitable

Phrase match becomes an ROI engine only when you actively shape it. These are the few “non-negotiables” I’d implement in nearly every account where phrase match is expected to perform:

• Tight ad groups by intent: If your phrase match keywords span multiple intents, you’ll attract mixed-quality searches and your ads/landing pages won’t align tightly enough to convert consistently.
• A negative keyword system you actually maintain: Add negatives based on real spend, real queries, and real conversion quality—not gut feel. Use phrase and exact negatives intentionally so you don’t over-block.
• Budget protection: If phrase match can consume budget early in the day, it can starve your exact match “profit lane.” If you see that happening, separate campaigns (or use shared budgets cautiously) so your best ROI traffic always has room to serve.
• Conversion quality feedback loop: If you generate leads, optimize to qualified leads (offline conversion import or enhanced measurement where possible). If you optimize to raw form fills, phrase match will often “find” cheap leads that don’t turn into revenue.

A simple decision framework you can apply this week

If you want a fast, practical way to choose, use this: run exact match when you need maximum control and you already know what converts; run phrase match when you want to grow beyond your current keyword list and you’re prepared to manage queries actively.

As a starting point, I generally recommend launching with both in the same intent bucket: exact match for the obvious, highest-intent terms and phrase match for controlled expansion. Then, every 1–2 weeks, move profitable search terms from phrase into exact, and add negatives to keep phrase from drifting. That’s how you get the best of both worlds: exact match efficiency plus phrase match growth—without sacrificing ROI.

For ROI, it usually isn’t “phrase match or exact match,” but how you combine them: use exact match as your precision lane for queries you already know convert (it prioritizes tight intent control, even though it still matches close variants), and use phrase match as a controlled expansion lane to uncover profitable long-tail searches—then rely on regular search terms reviews and a strong negative keyword system to prevent spend drifting to “close enough” intent. If you want help running that two-lane setup consistently, Blobr plugs into your Google Ads and deploys specialized AI agents like the Keyword Ideas Finder (to expand around proven winners) and the Negative Keywords Brainstormer (to reduce wasted spend), turning search-term learnings into clear, prioritized actions while keeping you fully in control.