Most businesses want a cost-effective way to bring in more customers. The challenge is to find prospects who are thinking about your products at the exact time that you reach them.

With Google AdWords, it is possible to target prospects at the very moment they are thinking about buying your products or services. Most of you know how it works: If someone does a Google search on digital cameras, for example, she sees ads for digital cameras. If someone does a search on organically grown coffee beans, he sees ads for organically grown coffee. Google AdWords enables you to implement precisely targeted advertising.

Here’s how to maximize your success with Google AdWords. With proper preparation and execution, starting Google AdWords can be like planting a money tree that will provide your business with a steady stream of revenue.

What Is Google AdWords?

Open up a Web browser and go to the Google Web site. Type in the search term coffee and click search.

Essentially, two types of search results come up: on the left and below are the organic search results that no-one has sponsored. On the right side of your browser window and sometimes above the organic results are the Sponsored Links. The Sponsored Links are paid advertisements—they are always identified as such by the heading Sponsored Links.

As participants in this automated auction, each of these advertisers is bidding for the keyword coffee. They pay only if someone is interested enough to click on the advertisement; if nobody clicks on the ad, the cost is zero. The higher the advertiser bids on a keyword, the higher in the rankings the ad appears and the more likely Web searchers will see it.

Ranking means visibility, though you do not have to be at the top of the rankings or bid the highest amount for prospects to see your ad and click on it. Your goal is to get the lowest cost per click (CPC) and the highest quality clicks (sales and leads) for your budget.

Finding Your Niche

Sometimes with popular keywords (like coffee), there are many companies competing. On the other hand, popular keywords get millions of searches, so there might be enough clicks to go around.The only way to find out if a particular keyword will work for you is to try it. The problem is that many other advertisers are bidding for the popular keywords, so your CPC is likely to be high. You are more likely to get a low CPC with more obscure, highly targeted keywords. It will take some thought to come up with the right keywords.

Our coffee roaster would probably want to try the keyword coffee, and watch it like a hawk as it could result in many low-quality clicks (not many conversions to leads or sales). If a keyword does not produce high-quality clicks after a reasonable trial period (a couple of weeks), then remove it; it may even be obvious sooner that a keyword is costing money but not producing results.

Perhaps our coffee roaster sells shade-grown coffee that protects Central American songbird habitat. While far fewer people are searching for shade-grown coffee than just coffee, it is likely to yield a lower CPC and higher quality clicks.

Do some brainstorming and write down an initial list of keywords that match your market niche. This process of finding targeted keywords will be a useful exercise to help you focus your campaigns and maximize your return on investment.

Getting Started

The first thing you need to get started with AdWords is a goal. Is your goal to make direct sales via e-commerce on your Web site? Is your goal to capture sales leads that you can follow-up with and make the sale? Alternatively, is your goal a combination of both? Once you have determined a goal, you need a Web site that helps you achieve that goal.

Your site should be eye-catching and well-organized and should include landing pages for your products or services. To see some examples of landing pages, do a search for your services, and look at what other companies in your market are doing.

The landing page can be your homepage if your site tightly focuses on one product or service you are advertising (e.g., this permission-based email marketing site). Otherwise, the landing page should be within your larger site and should focus on the specific product or service you are advertising.

If you are selling directly from your Web site, it should include a secure e-commerce system. Any good, technically competent Web design firm can set this up for you.If you want sales leads, then your site should include a call to action to persuade people to request more information. The way they submit a lead is to click on a link to a lead-capture form.

You need a form that, at the very least, sends you—or the appropriate sales staff—an email, but ideally it should also create a lead for you in a customer relationship management (CRM) system such as SalesForce or SugarCRM.

Whether you are selling directly from your site or capturing leads, your site should always have obvious ways to contact you using whatever method the prospect feels most comfortable using: a contact form, email, or telephone. Some company sites make it hard to figure out how to contact them for more information.

It is important to have a number of people—both inside and outside of your company—test your Web site for usability and ease of use. Prospects should never have to wonder how to buy from you or how to contact you to ask a question about your products or services.

Signing up for Google AdWords

Once you have a goal, Web site, and landing page, you are ready to sign up for Google AdWords. Learn by doing. It is easier to write the advertisement and select keywords using the tools that Google provides during the sign up process.

If you plan to spend at least $30/day on AdWords, Google offers a JumpStart program to help you get started using AdWords. Google JumpStart specialists will help you create a campaign. The cost of the program is $299, but Google will apply that as a credit toward the cost of your initial clicks.

Campaigns and Ad Groups

The Campaign level is where you set your daily budget, language targeting, location targeting, ad distribution preferences, and the start and end dates for your campaigns (if applicable).The Ad Group level is where enter your keywords and the advertisements themselves. Each Ad Group has one or more ads. Write at least two ads for each ad group so you can try different approaches and compare the results.

In my experience, it has been beneficial to create multiple campaigns so I can experiment with different parameters and compare the results.

Targeting

Choose the language you want to target, and then the countries or territories. This requires some thought. Can you offer your product or service globally, in just the United States, or in just your city or region? You can target your campaign to the world or to specific countries, regions, states, or cities.

For even more precise targeting, you can even target your campaign to a certain number of miles from your business or even an area bounded by coordinates.

Writing Your Advertisements

You have just a 25-character ‘headline’ to get surfers’ attention, and a 70-character ad to get people interested enough to want to click on your ad. It is not a lot of text, so make it pithy.

Write the Headline, the text of the ad, and enter the Display Link (always link to main page of your Web site), and then enter the Destination URL (your landing page). The Destination URL might be your main page or a page within your main site dedicated just to selling the product at hand.

Here’s a fictional ad example:

Headline: Shade Grown Coffee Beans

Description line 1: Shade grown coffee tastes

Description line 2: better & saves valuable rainforest.

Display URL: www.goodshadegrowncoffee.com

Destination URL: www.goodshadegrowncoffee.com?&utm_id=coff1

Another example…

Headline: Shade Grown Coffee Beans

Description line 1: Coffee that tastes better &

Description line 2: protects valuable rainforest.

Display URL: www.goodshadegrowncoffee.com/

Destination URL: www.goodshadegrowncoffee.com?&utm_id=coff2

Conversion Tracking

To track the conversion rate of your campaigns—i.e., how many sales or leads you get for your investment—requires a little preparation. You will need to have your webmaster embed snippets of code to the appropriate pages on your Web site. Google explains how to set up and implement your conversion tracking code here, including example code.

Google Analytics

In the fictional advertisement examples I gave, you may have noticed codes in the destination URLs: “coff1″ and “coff2″. These are tracking codes that facilitate the tracking of a wealth of information by Google Analytics.

Google Analytics, which Google has integrated with AdWords, is a very powerful service for tracking the success of both your organic and paid search results for your site. It will help you better understand your site visitors’ experience in detail. In addition, you can learn what keywords bring in the best prospects, and which of your campaigns are delivering the best return on investment. You can use Google Analytics to track marketing campaigns other than AdWords as well.Google Analytics is too big a topic to cover much here, but I will devote a future article entirely to this powerful marketing tracking service.

Choosing Your Keywords

As I mentioned earlier, it is important to pick good keywords. Initially, choose both general keywords and narrowly targeted keywords, and carefully evaluate the results. Keep keywords that are getting you results, and remove keywords that are not working for you. You will probably need to run your campaigns for a while before you will have enough information to determine which keywords are succeeding for you.

In the keyword space provided in the setup process, list the keywords or keyword phrases you would like to use. Because people tend to type fast when they search the web, be sure to include common misspellings of your keywords.

Here are some example keywords that our fictional coffee roaster might use:

• * coffee
• * coffe
• * shade grown coffee
• * shade grown coffe
• * shade grown
• * shade coffee
• * coffee shade grown
• * shade grown coffee migratory birds
• * benefits of shade grown coffee
• * gourmet coffee
• * gourmet coffee beans
• * gourmet coffees
• * coffee beans
• * gourmet coffee beans
• * organic coffee
• * organic coffee beans
• * certified organic coffee
• * coffee beans organic
• * mail order organic coffee
• * bulk coffee

To get more keywords, enter a keyword into the Keyword Tool Box and click on Get More Keywords. This will generate additional keywords, some of which will be relevant to you and some of which will not be relevant. Keep the relevant keywords and toss the rest.

Now, you have a good starting list. Later, you will want to add new keywords and remove non-performing keywords. A good keyword is one that yields conversions: customers or good leads.

Google Search vs. Google Content Network

Google AdWords can place your add in essentially two places: Google search and the content network. Google search are results from searches that prospective customers do directly using www.google.com. The content network consists of Google partner sites and sites that run advertisements through Google’s AdSense program.

In my experience, Google search has yielded much more quality clicks than the content network. The content network is worth trying, but I recommend putting it into a separate campaign so you can measure its results against your Google search campaign.

The content network is opt-out, and it is not possible to opt out during the setup process. However, to opt out of the content network for a specific campaign, you can go back to campaign settings and uncheck the checkbox for content network.

Then setup a separate campaign where you focus on the content network and opt out of the search network. Compare the results between the two campaigns. It is possible that you will find Google search is more productive than the content network, but of course your results may be different from mine.

If you want to keep it simple until you are more comfortable with AdWords, I recommend starting with just the search network. Then come back in a few weeks and set up a separate campaign to try the content network, then compare the results with what you are getting with the search network.

Your Daily Budget

Your daily budget for your campaign is the ceiling on your daily spending. You can set this number at whatever you want. It is a good idea to start out with a relatively low daily budget while you refine your AdWords effectiveness. As your ad campaigns succeed and bring you more business, you will likely want to increase your budget.Start with a daily budget of about $10-$15 per day and gradually increase that amount as you fine-tune your approach.

Your Bid

In addition to your daily budget, you will need to set a maximum bid that you are willing to pay as a cost per click (CPC). This requires some trial and error to get right. Being the highest bidder is not really what that you want. Instead, you want to get the most quality clicks you can for your budget. If you bid too high, your CPC will be too high and will eat up your budget too fast; if you bid to low you will not get enough clicks and hence enough sales.

You might try starting with a bid of $2.50, and see what happens for a day or two. Then gradually raise or lower the bid, depending on results. If clicks consume your daily budget in a couple of hours, then lower your bid. If the advertisements are not getting many clicks, then raise your bid. Continue this process until you find the optimal bid.

Leads and Sales

What if visitors are clicking on your ad but are not buying or contacting you? That likely means your ad is working but your site or landing page is not persuading prospective customers to take the next step. It can also mean that your product or service needs some work to become more competitive. Compare what you are offering to what your competitors are offering.

The simplest things can make a dramatic difference. When your landing page is not getting you conversions, change one thing and see what happens over the next day or two. That way, you can determine which changes work. Do not be afraid to try possible solutions, knowing that some changes will fail and some will work well.

Recently, one of our landing pages was not getting enough conversions, so I made some minor changes to the wording on the page and conversions started going up the next day. On another page, we replaced our very simple order form with a much more elaborate version. Our sales for that service immediately plummeted. We simply changed the order form back to the simpler version and sales picked up again immediately.

Harvesting From the Money Tree

The Google AdWords money tree is now planted, optimized, and working to bring you leads and sales. What do you do now? Harvest it, of course, by solid follow-through and providing the best possible service for your clients.Go back from time to time and take a look at your results. Make adjustments to your budget and bids as needed. Write another advertisement that takes a slightly different tack. Remove an ad that is not producing high quality clicks for you. Make some improvements to your Web site to see whether you can increase your conversion rate.

Practice Kaizen—a Japanese word for continuous, incremental improvement. Even if your Google AdWords money tree is providing good yields, there are always ways to improve its performance.

So pour yourself a cup of good coffee, and get started using Google AdWords today!

Google AdWords Ad Positioning

Although the profit margin on the product or service offered is a large factor, tests have proved that the first ad position on the first page is, generally, not the most profitable. Yes, it gets the most clicks, but it’s often a spontaneous action by the surfer before studying the ad. Sometimes the surfer is merely browsing the subject and is not ready to buy (commonly known as “tyre-kickers”).

Tests show that the further down the page an ad is, or, occasionally, even on the second page, the greater is its conversion rate. The surfer has taken the time to read the ad carefully because he is ready to buy. Furthermore, the clicks are fewer; so, your overall pay-per-click bill is less than for a higher-positioned ad. The downside is that the click-through rate (CTR) of the lower-positioned ads is lower, which affects your Quality Score adversely and raises your cost per click.

A happy medium is to aim for positions 4 to 6 on Google’s first page. (You can use the “Show Estimated Ad Position” and “Estimated Avg CPC” columns in the on-line Google AdWords Keyword Tool to determine the cost-per-click to bid for each of of your exact match keyword phrases, and then you can set those bids accordingly. These figures can, however, be notoriously inaccurate. Always check your keyword phrases’ positions afterwards in the ‘Avg Pos’ column on the Ad Group’s ‘Keywords’ index tab or by testing with a search on the main keyword phrases.)

“Google Search” ads, “Content Network” ads, “Search Network”/”Search Partners” ads, “Placement” ads

You can specify different maximum bid amounts for these various types of advertising. Because the quality of their traffic tends to be lower, bids for the Content Network (”entire network” option) and Search Network (Search Partners) (see Tactics > Search Network) should be kept lower and be more tightly controlled than those for Google Search traffic and the Content Network (”Placement ads” option).

In the early stages of a new Google AdWords campaign, it is advisable to go with only Google Search traffic and switch other options off, to help you to control costs. Once you’ve discovered the keywords that produce the highest return on investment (ROI), you can enable other options for those keywords to see what results they produce.

If you find that a Google Search traffic campaign is too competitive, don’t just abandon Google AdWords altogether; try a Content Network Placement ad (see Tactics > Placement Ads), bidding either CPC or CPM (q.v.).

Testing and Tracking

Ad Variations

Despite what you may think of your copywriting prowess, you will not write the perfect ad at the first attempt. You may need ten attempts before you find the best formula. Although you may hazard a reasonable guess at the advertisement text that would attract visitors, the ONLY way to KNOW what ad text achieves the highest click-through rate (CTR) is split-test two ads simultaneously.

Although changing just a single word can make a difference, do not split-test two ads that resemble each other that closely; Split-test two radically different ads. (Switch off Google’s option to show the better-performing ad more often than the other, as that would distort the test results.) After between 20 and 50 clicks it should become apparent which of the two ads is out-performing the other. Then replace the inferior ad with another and split-test again. Repeat this process again and again, each time reducing the textual differences between the two ads until you arrive at the one that performs best of all.

To track the click-through rate (CTR) of your ads, go to your Google AdWords campaign web page, click on the Campaign name; click on the Ad Group name; click the ‘Ad Variations’ index tab; check the ‘CTR’ column.

Always keep all the Ad Variations that you create, to check that you don’t repeat any inadvertently.

Landing Pages

Split-test your landing pages in a similar way, to discover which style, layout, text, call to action, etc. achieves the highest conversion rate. To track the conversion rates of your web pages for various keywords, go to your Google AdWords campaign web page and click on the ‘Conversion Tracking’ item on the ‘Campaign Management’ index tab.

Always save all the landing pages that you create, to check that you don’t repeat any inadvertently.

Keywords

After a new campaign has been running for about a month, check the click-through rate (CTR) of all the keyword phrases in each Ad Group on its ‘Keywords’ index tab. Click the ‘CTR’ column header to sort the keyword phrases, mark the checkbox of all keyword phrases with a CTR of less than 0.5% and either ‘Pause’ or ‘Delete’ them. (If you have many keywords, it’d probably be quicker to do this in your specialist AdWords software tool and upload the keyword list to your Google AdWords campaign again.)

0.5% is considered the benchmark of a poorly performing keyword. Such keywords cause your ad to be displayed but, for some reason, the people using the keyword in their search terms don’t connect it mentally with your ad, and don’t click on it. If several keywords have a low click-through rate (CTR), the overall click-through rate (CTR) of your whole Ad Group is reduced and its Quality Score will be affected adversely. Eventually, this Ad Group’s lower Quality Score will also affect the Quality Score of your entire Google AdWords campaign.

This check should be performed weekly thereafter.

If you really want to use those poorly performing keywords, remove them from the Ad Group and create a new Ad Group for them, or even a new campaign, so that they don’t affect your overall Quality Score.

The Bottom Line

Great importance is attached to the click-through rate (CTR), but, to put it in perspective, it is only a means to an end. A high click-through rate (CTR) does not make you a millionaire in itself; It’s revenue that counts. Your revenue is determined by the successful interaction between keywords, Ad Variation and landing page, all three working in harmony together.

Maximum CPC Bid

Don’t be afraid to bid higher than necessary for keywords in a new Google AdWords campaign during the first few days. This will establish your campaign with Google and, as your click-through rate (CTR) rises, your maximum CPC bid amount to achieve the same ad position will fall dramatically. Then you lower your bids and check again the next day. Repeat this process until your bids are minimized. You do this for all the keyword phrases in the Ad Group. If there are too many keywords to deal with manually, invest in specialist software to calculate the bids for you.

CPC or CPM?

Google ‘Content Network’ advertising (see Tactics > Content Network) gives you the option to specify your keywords’ maximum bids as cost-per-click (CPC) or cost-per-thousand-impressions (CPM) (”M” is the Roman numeral for 1,000, “mille” in Latin). CPM can be useful if the Quality Score is low or the cost per click (CPC) is high. If you opt to pay for impressions rather than for clicks, Google couldn’t care less about Quality Score or click-through rate (CTR) or even relevance; You simply pay each time your ad appears. Of course, it’s still in your interest to ensure that you follow the advice about relevance already given.

It’s your responsibility to track the performance of your CPM ads, because Google doesn’t do it for you. Obviously, you won’t want to keep paying for ads that don’t convert. Moreover, you’ll still have to bid high enough to get your ad to be displayed in the desired position within an ad unit on an AdSense publisher’s web page, or even at all, and that cost could be quite high on a good-quality, popular web site that you choose for a ‘Placement’ ad (see Tactics > Placement Ads).

Keywords

Unless you have a six-figure annual budget and would be happy with a mere 10% return on investment (ROI), don’t bother bidding for popular 1-word keywords, such as “mortgage”. The competition for most single-word keywords is fierce, unless the niche is very esoteric. Moreover, searches on single words are made most frequently by people who are simply not ready to spend their money; they are merely investigating the market, gathering information; in other words, they are “tyre-kickers”. 1-word keywords would probably bankrupt you very quickly.

2-word keywords are a better bet, but they can still command a high cost per click in competitive markets, surfers who search on them may still not be ready to buy, although they’re getting there.

Keyword phrases of three words and up are known as “long-tail” keywords. (Note that the word “keyword” in pay-per-click advertising can mean a phrase of more than one actual word, e.g., “New York”. A “keyword phrase” consists of more than one “keyword”.)

3-word keyword phrases have the highest conversion rate, according to tests. People who type three words as a search term have usually done their investigations, know exactly what they want, and are now ready to buy.

4-word keyword phrases fare slightly less well, perhaps because the searcher may indeed be ready to buy, but is comparing prices for a very specific item, or is doing some academic research.

Don’t understimate the power of negative keywords! If you sell tulips, you don’t want your ad to appear when someone searches on the term “grow tulips”. Although they may not click on your ad, it’d be an unnecessary impression, and its click-through rate (CTR) would suffer. Specify “grow” as a negative keyword. (Of course, if your Ad Group contains only exact match keyword phrases, there’s no point in specifying negative keywords.)

Landing Page

Relevance is covered above, and is by far the most important attribute of a landing page. Here is some advice about other ways to encourage Google to enhance your Ad Group’s Quality Score.

Google values “real” web sites more highly than mere single-page “mini-sites”. The robot checks for links to other web pages, particularly a ’site map’ page and ‘privacy policy’ and ‘contact us’ pages. A ‘terms of use’ and an ‘about us’ page may also help. Hyphenate these page names as the file names, e.g., ‘privacy-policy.html’. Place the links to these pages at the very bottom of your landing page, in the footer, using as small a font as a human would consider reasonable. You want to reduce the risk as much as possible that your visitor will click away from your landing page.

Minimize the landing page’s load time. It is believed that Google uses this as an element in its Quality Score algorithm. Keep images and JavaScript to a minimum. They weigh the page down. (Google cannot follow JavaScript links anyway.)

How to Attract Visitors

What makes a person click on your ad instead of someone else’s? The answer is the same as to the question why a person clicks the ‘Buy’ button on your sales page: good copywriting. That’s a separate subject, but, suffice it to say here that your ad must be not only relevant, but also compelling. Imagine that you are the searcher, looking to buy a product or service like yours. Look at other ads offering something similar. What attracts you to one and not another?

Ask your friends and colleagues what they think.

You have only a 25-character headline and two description lines of 35 characters each. Don’t squander them on waffling about your company. The consumer couldn’t care less about you or your company. The consumer has a problem to be solved, a need to be satisfied, a desire to be fulfilled. So, mention the problem, the need, the desire. And, most important, tell the consumer that the solution, what he needs, what he wants is only a click away. Tell him to “Get Help Now” or to “Find It Here”. That’s the ‘call to action’.