I just wrote an article about Ad Words which may help:
Failing to use Ad Words properly can make you broke very quickly, so here are some simple steps to creating a successful Ad Words campaign.
1) Don't use to many keywords
This is a common mistake many marketers make when starting an Ad Words campaign. Ads should be closely be related to search query and use no more than 15 keywords per ad group. If you are advertising different products, take laptops and internet security for instance, use one ad group for each product.
2) Use the right keywords
Google Ad Words lets you use three different types of keywords:
a) exact match
b) broad match
c) phrase match
Using the right types of keywords depends on what you want from your ad campaign. Exact match will only show ads when someone searches for the exact keyword, this will have fewer impressions but has the highest conversion rate. Broad match will show ads if your keywords are searched in any particular order, this will yield more impressions but will show ads in areas not as specific as exact match keywords. Phrase match will only show up specific phrases. like exact match, phrase match will have a higher conversion rate than broad match.
3) Spy on your competitors
In addition to using the right keywords you also need to find out what your competitors are doing to attract customers. These include the anchor text they use, the text written on their ads, their landing page and where their ads are placed. You can use lots of free tools to help find this information. With this information you can then aim at where your own ad should be placed and what you can write on your ad. Ideally you want your ad placed just below your competitors, this way you don't have to bid as much on key words thus saving you money but also showing your potential competitors customers you exist.
4) Don't start a bidding war
When using Ad Words you are effectively bidding against your competitors for keywords, unless you are very well financed avoid bidding to high because a lot of big businesses like their ads to stay at the top and will pour money into their advertising to make sure they stay there.
5) Have a good sales page
The sales page is the first thing a visitor to your website will see. This is very important because a well laid out landing or sales page will increase conversions and reduce bounce rate.
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