Agentmail,
Think of it as a competition, in some ways its kinda like
SEO.
If your competitors are bidding specifically on an exact long tail keyword then they will likely have their ads served in preference to yours (if you only have a broad match keyword that might be suitable).
There's a bit more to it than that as other factors, particularly quality score and keyword bid, will also come into play but that probably answers the question you had on setting keywords up.
As for setting up your campaigns and adgroups, use seperate
campaigns if you are looking to seperately target geographical areas, the display network or device types (i.e mobiles, tablets) or if you need to set a budget, or schedule ad showing to specific days or times.
Use
adgroups to target related search terms with their own ads. Have two ads per adgroup so you can test and compare the results and see what types of messages are attracting clickthrough and conversions.
If you are using broad match and getting too many mismatches then try using modified broad rather than the original expanded broad, it can save a truckload of work on building a negative match list. It still allows Google some rope for picking up matches that are misspellings and plurals and some other very close matches but stops the very broad matches that the original broad match allows.
To use the modified form of broad simply put a + sign immediately before your keyword (+keyword)
Hope that helps