How content keyword targeting works
On the Display Network there is no search box. Nobody has typed anything, so there is nothing to match a keyword against except the page itself. Content keyword targeting reads your keywords as a description of subject matter and looks for pages whose content covers the same ground.
Because of that, match types do not apply. There is no exact, phrase or broad distinction here; the keywords are treated as a theme, taken together. A tight group of related words tells Google clearly what kind of page you mean. A scattered group covering several unrelated subjects tells it nothing useful, and the campaign drifts.
You also get no report of what somebody searched for, because nobody searched. The equivalent feedback is the placement report, which names the sites, apps and channels the theme actually resolved to. That report is the only real check on whether your keywords meant what you thought they meant.
Why content keyword targeting matters
It gives display a level of precision that subject categories cannot. A topic branch is a fixed list drawn up by Google; your keywords describe exactly the niche you care about, including narrow product areas and industry language that no category covers.
It is also cheap to set up honestly. You do not need audience lists, historical data or a placement research project. If you can describe in words what your customer reads about, you can start, and the placement report will tell you within a short run whether the description was accurate.
Common mistakes with content keyword targeting
Reusing search keywords verbatim is the big one. Search keywords are written as intent phrases, complete with buying language and location words. Those make poor descriptions of an article, so the campaign either fails to find pages or finds the wrong ones. Contextual keywords should read like the subject of a page, not like something a customer would type.
The second is treating this as search on another surface. Someone reading is not someone looking to buy, and holding display to search conversion expectations produces the wrong verdict every time. The third is scale. Too few keywords give an unclear theme; too many pull in several themes at once and the campaign serves against the loosest of them. It is closer in spirit to topic targeting than to anything in a search campaign.
How to act on it
Write the keywords as if you were describing the article you want your ad beside. Keep each ad group to a single subject, with a handful of closely related words, and build separate ad groups for separate subjects rather than piling everything into one.
Then read the placement report early, and keep reading it. Where the campaign lands on pages that clearly do not belong, tighten the keyword set and add the offenders to your placement exclusions. Judge the results on the measures display can actually deliver, such as qualified visits, remarketing audience growth and later assisted conversions, rather than on a direct last-click comparison with search.