Degree of Match between Keyword Target & Customer Search Terms
Whether or not your sponsored product appears for a customer's search term on Amazon will often depend on your keyword's match type:
Exact: search terms that match your keyword word by word (same word order + same components).
Phrase: search terms that contain all components of your keyword in the same order.
Broad: search terms that contain all components of your keyword in any order.
Different Search Term Diversity -> Different Outreach & Relevance
When selecting your keywords for a manual Sponsored Products campaign, you have to give each keyword a match type. Each match type will differ by the amounts of different search terms it can reach, as shown in the following example from this PPC Basics blog:
Each Match Type with own Strenghts (& Weaknesses)
There is no "best" match type - each match type has its own advantages and respective use cases.
Exact - get the most out of proven search terms
In the above example of targeting "leather wallet" as an exact keyword only, your outreach will be very small and search term relevance very high, as your Sponsored Product will only appear to customers entering that exact word combination.
On the one hand you therefore really know the audience you are targeting and are able to finetune your bid to match the performance of that exact search term.
On the other hand it will take you longer to get relevant data for that keyword. If you want to test multiple search terms using exact, you would have to run multiple exact keywords whereby each one of them has to reach their own click thresholds.
Broad - discover new relevant search terms
On the contrary, broad keywords are especially useful to find more relevant search terms.
They will not only have your sponsored product appear when customers enter your (exact) keyword, but also when they enter broadly related search terms that include all of the keyword's word components.
However, this also means your search term relevance might be very low, as you could be appearing for various search terms that are not relevant to your product.
Campaigns with broad keywords are therefore generally expected to be less efficient than the other match types, but necessary to find new search terms.
Phrase - test new keywords
Phrase offers a good medium option, ie. medium keyword relevance and medium outreach.
It's therefore a good match type to test newly found keywords, as they will assemble data for each keyword quicker than exact keywords, while not being too "broad" in the search term outreach.