Handling Product Variations
The question of how to handle product variations is common. In short, the most popular variation is the one that should be advertised. For example, if you have a product that comes in different colors, you should advertise the most popular color. If you have a product that comes in different sizes, you should advertise the most popular size.
There are some notable exceptions to this rule.
Significant Feature Difference
A product with a significant feature difference should be advertised separately. In fact it should be treated as a seperate product and have it's own campaign for several reasons.
A significant feature difference will likely have a different set of relevant targets (keywords etc), and negative targets.
A significant feature difference will likely a seperate product page with relevant ad copy.
See Campaign Strategies > Product Variant Targeting for more information.
Significant Price Difference
A product with a significant price difference should be advertised separately for several reasons.
A significant price difference likely indicates a different set of features (see above).
It is easier to calculate profit for campaigns when all products in a campaign have the same price.