Google Adwords when properly utilized and managed can drive business to your website. You may not know it, but you are already familiar with the Adwords program. The advertisements that appear on the right hand side of your Google Search results, in your GMail, on Google Maps, and on the massive and ever growing Google affiliate network are the end product of a Google Adwords campaign.

The idea is simple enough. You pick keywords that you want your ad to show up near. If someone clicks on your ad you are charged a fee. This is called CPC (Cost per click) advertising. Popular keywords cost more when someone clicks through your ad. Maximum bids can be setup for the campaign on the whole and for specific keywords. While the fundamentals are simple, a successful Adwords campaign hinges on several key factors.

Balancing your Keyword Costs is the first step. You can compile a huge list of keywords that your ads will show up near, and generate a great deal of clicks, but that will not guarantee any of those clicks turning into sales. All a huge list of keywords will accomplish is costing you money. A great deal of thought must go into keyword selection. Adwords is not something you want to just setup, forget about, and hope it’s working. It must be monitored on a regular basis. Your campaign needs to be fine tuned until your find the perfect balance of cost to conversion ratio. This can take weeks, even months, and fluctuate (depending on the business) based on the month, time of year, or economic climate.

Keywords that are generating a large amount of impressions but very few clicks should be discarded. Bids should be increased on keywords that generate a large amount of clicks. If you notice a good deal of clicks, but very few conversions (a conversion being a visitor to your site that ends up purchasing a product or service) the bids on those keywords should be reduced or the keyword should be removed altogether.

Seasonal keywords should be added and removed based on the time of year. Keywords relating to breaking news that relates to your business should be added, and removed as click through ratios fall.

Common misspellings of keywords that relate to your business should be added. These keywords will usually have a low impression count, but they also have a low cost per click.

If you only do business in one part of a country, or in one city, your campaign should only be serving up ads in those areas. Don’t waste you money having your ads displayed in parts of the country, or world, if you have no intention of converting those clicks into sales.

A properly managed Google Adwords campaign can be both effective and cost effective. Small businesses with a tiny advertising budget can get by with a budget of $1-5 dollars a day if they focus on cheaper keywords. Larger businesses can generate great leads with a bigger budget. However, beware, a large budget and hundreds of clicks does not necessarily mean you will convert a large amount of clicks into sales. Your campaign needs to be properly managed, maintained and monitored.

If you do not have the time to setup and maintain your Google Adwords campaign you should hire a professional to maintain it for you.

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