How to Make the Most of Google AdWords

Derek Vaughan

Are you one of the 150,000 Webmasters and advertisers using Google’s AdWords Select keyword targeted text advertising to drive traffic to your Website? If so, you may be able to save a bundle by cheating Google! Okay, so it’s not exactly cheating per se, but if you’re not using all the tools and tricks that AdWords provides, then you’re definitely leaving money on the table. And, when your competitors see your results, they’ll think you’ve somehow cheated the AdWords system.

This series of articles will systematically show you how to:

  • Generate the absolute best keyword list for your target market
  • Use simple techniques to vastly expand your productive keyword list
  • Create highly clickable copy for your ad
  • Precisely limit the distribution of your ad to only those prospects who are most interested
  • Beat the competition with creative bidding strategies
  • Dramatically reduce costs of your campaigns while increasing clickthroughs

The series has five parts:

  1. Part 1 – Keywords (starts below)
  2. Part 2 – Create your Google AdWords Ad
  3. Part 3 – Ad Distribution and Bid Strategies
  4. Part 4 – Results Tracking and ROI Reports

Let’s get started!

Generating Your Keyword List in 5 Easy Steps

In order to get the most out of the AdWords Select program, you simply must have a great keyword list. If your keyword list is not deep enough, you will be doomed to pay top dollar on only a few highly-trafficked phrases that garner top dollar bids. So, what are the steps to developing a great keyword list?

First things first: you need your core list of targeted keywords and search phrases. These are the terms that your customers will type in to find your goods and services. Let’s say you have an online store that sells handheld organizers like the Palm Pilot. Take a minute and think about how you would go about searching for a personal digital assistant (PDA) online. Would you search on the term ‘digital device’? How about ‘PDA’? Maybe ‘Palm Pilot’ or ‘Palm V’? Would you try ‘personal electronics’? My point is that there are many, many different and distinct search terms that will get you where you want to go.

So, how can you determine which search terms to use when advertising your goods and services? Follow these instructions:

  1. Write down the top search terms that you can think of that describe your business or service. I suggest keeping this list on a spreadsheet if at all possible — this will make it easier to organize and submit later.
  • Use the Overture ‘Search Suggestion Tool’ to get an idea of the popularity of each search term and enter this number under a ‘monthly impressions’ column in your spreadsheet. The tool is located here.
  • When I searched on our example keywords, I found that those search terms were recently searched as follows:

    • Pda – 420,800
    • palm pilot – 75,982
    • palm V – 3,899
    • digital device – 376
    • personal electronics – 250
  • Use the Search Suggestion Tool to lengthen your list of search terms. Not only does the Search Suggestion Tool reveal the number of searches for any given search phrase, it also displays any closely related search terms.
  • Another excellent resource is found at At $199 for an annual membership, this service will reveal which terms are the most searched on the Web, and also give suggestions for alternative search phrases. Typing ‘palm pilot’ into Word Tracker also shows a list of search terms (suggestions), and the number of times the associated terms were searched at Overture in the previous month:

    • palm pilot software – 6,960
    • palm pilot game – 5,486
    • palm pilot free game – 5,478
    • palm pilot free ware – 2,315
    • palm pilot free software – 2,203
    • palm pilot downloads – 1,995
    • free palm pilot downloads – 1,931
    • palm pilot accessory – 1,291
    • palm pilot share ware – 985

    Add all the new relevant terms and monthly impressions to your spreadsheet list. Be creative! Type in any series of words that you think might lead someone to your product or service. Use a thesaurus and a dictionary to assist you.

  • Go back to your list -– it should be pretty lengthy by now –- and add modifying words that are relevant to your product or service, such as: cheap, discount, low cost, free, premium, authentic, etc. Check the Search Suggestion Tool to assess the number of searches conducted for those terms in the previous month. Enter the terms and data into your spreadsheet under ‘monthly impressions’.
  • In our example, if you use the keyword ‘Palm Pilot’, why not consider using ‘discount Palm Pilot’, ‘cheap Palm Pilot’, or ‘low cost Palm Pilot’ if they apply to your business? The purpose of these activities is to generate the longest possible list of relevant search terms possible. Why? Remember, you only pay when someone actually clicks on your message. You pay nothing extra to simply list more keywords. Additionally, the more keywords you have, and the more specific the search phrases are, the more likely that your visitor will be truly interested in your product or service. For example: ‘pda’ is a very general search term. Anyone interested in handheld organizers might search using this term. However, ‘Palm V’ is a more targeted search term. These customers are narrowed to a particular brand and model. The search phrase ‘discount Palm V’ is even more targeted, and will attract price conscious Palm V shoppers.

    A longer list of relevant search phrases also increases the likelihood that you will attract visitors to your site at a lower cost. That is because it is often possible to bid less for a click if the search term is less popular. More search terms, bid at a lower cost, mean more traffic to your site for fewer advertising dollars.

  • At this point in the process, you should have a fairly comprehensive list of targeted search terms and phrases. I suggest you sort the terms on your spreadsheet by ‘monthly impressions’ to get a sense of which terms are most popular. These are the terms that can end up costing you the most advertising dollars if you choose to bid for a high ranking.
  • Congratulations! You have now generated a comprehensive keyword list that will get you ahead of your competitors. In the next installment, we’ll look at some rarely used techniques to ensure that your clickthrough rates are among the highest in your category.

    In Part 1 of this series, we learned how to create a comprehensive and targeted keyword list specific to our business. In this installment, we’ll learn how to:

    • Create copy that compels your prospects to click on your ad
    • Land your prospects on a page that will maximize your investment
    More on How to Maximize Google AdWords

    Now that you’ve generated a comprehensive list of targeted keywords and phrases with which to attract your customers, you must create an advertisement which will entice them to visit your site. Google adheres to a strict advertising format: all listings are text only, with a title line of 25 characters and a product or service description with 2 lines of up to 35 characters each. Your URL is also limited to 35 characters.

    It is critical that this message be effective, concise and descriptive, and that sales are driven for best results.

    Title Lines

    The title line is the first aspect of your Google ad that a potential visitor to your site will see. Google also has an affiliate network that displays their search results, and some of these distribution partners display only the title line of your advertisement. At these distribution sites, the only indication of your site’s value proposition will be the title description. But even when the full description accompanies your title line in a listing, it is the title line’s job to catch the attention and interest of a prospective customer — and to fluidly transition them into reading your full description and clicking through to your site. No sweat, right? Oh wait…you have to accomplish this using only 25 characters in total!

    My process for creation of a title line is fairly straightforward. I open a new document in Microsoft Word, pick the first (most popular) search phrase on my spreadsheet list, and then write a description that really sells my product or service relevant to that keyword or phrase. Initially, I don’t really worry about the exact length. I just try to get the most sales driven message I can. After constructing something I like, I highlight the phrase and use the ‘Word Count’ function under the ‘Tools’ menu in Word to ascertain its exact length. One caveat! Experience has proven one extremely powerful rule of a search phrase description: your description should contain the search phrase or a derivation of it if at all possible. This will increase the effectiveness of your title. Experience has also shown that if you are offering a compelling value proposition, listing a price will increase clicks. I also like to use capitalize letters in the title. Obviously the word ‘free’ increases clicks.

    For example, if you are writing a title for the search term ‘Palm V’, your title should include the term ‘Palm V’. Here are two 25-character-or-less examples:

    Lowest Cost Palm V – $100
    Palm V’s From Just $99

    One great thing about AdWords is that it’s pretty easy to change your message. I recommend testing several different approaches and finding the words and phrases that generate the most clicks. It’s also smart to review the titles of your competitors in each category. I will type in the keyword or phrase and scan the title line to get a feel for what the main points of competition are. Some categories are very price driven, while others are service focused. There are no hard and fast rules as to what will work best, so continuous testing and refinement should be employed for all important keywords.


    Descriptions are the heart and soul of your sales pitch. You’ve managed to get the attention of your potential customer — maybe for only a millisecond. Now, you’ve got to deliver on the promise of your title. Finally, you’ve got to convince your potential customer that if they click on your link, they will be rewarded with the all the benefits described in your message.

    A great description gives as much relevant information as possible to the potential customer. This serves 2 purposes:

    • It will encourage qualified prospects to continue on to your site in search of further information, or to purchase your offerings.
    • It will discourage random clicks by unqualified prospects who are not firmly in your target demographic.

    Your description should include any factors that clearly add value to the customer above and beyond your competition. Do you offer special products or services? A wider selection? Better credit terms? More flexible payment options? Hard to find inventory? These are the kinds of trigger points that can lead to higher clickthroughs.

    Another Trick – Where to Direct Your Link

    The final step in the customer’s journey is to successfully land on your site — piece of cake, right? It is if you know that you need to land the customer on the portion of your site that is most relevant to the search term. Always link the customer to a page that contains the exact information, product or service that they were searching for. In our example, don’t just land the customer on your home page. Land them on the exact page within your site that describes and offers for sale the Palm V!

    Never create a disconnection between the original search term and your landing page. Evaluate every keyword and search phrase to identify the best area of your site on which customers should be delivered. Use your spreadsheet to keep track of where you want each search phrase linked. Go to your site, find the correct page, then cut and paste the proper URL into your spreadsheet. This is absolutely necessary to maximize your conversion to sale.

    One final note on landing pages and your links: Google will bill you for a click once a customer has clicked on your link. You will be billed for this charge regardless of whether or not your site is functioning properly, or if the customer abandons the process prematurely because your site takes too long to load. Make sure that your site loads quickly, and that the links you deliver are active. If your site goes down, remember to reduce your bids to the minimum amount to prevent spending money driving potential customers to a dead link.

    Great! You now have titles and descriptions that stand out from the competition. You also know the power of a targeted landing environment. In the next installment, we’ll look at some often overlooked techniques to further narrow your target demographic, and reduce “junk” clicks.

    In Part 2 of this series, we learned how to create copy that compels your prospects to click on your ad, and discussed the importance of landing your prospects on a page that maximizes your investment in their click. In this installment, we’ll learn how to:

    • Precisely limit the distribution of your ad to only those prospects that are most interested
    • Beat the competition with creative bidding strategies
    Limiting Your Distribution – The Key to Success

    If there is one component of AdWords that’s most often neglected, it’s controlling the distribution of your ad impressions to only those prospects who are most targeted. According to the Google AdWords Website:

    Each account is evaluated after every 1,000 ad impressions are delivered on Google. If the CTR for your account falls below a minimum required CTR (which varies by ad position, but is 0.5% for the top spot and slightly reduced for each subsequent position), we’ll only show your ads occasionally on your underperforming keywords. (The status of each of your keywords will be clearly indicated in your keyword reports.) If your keywords don’t improve, we may disable them. You’ll then need to refine your campaign to improve its performance and effectiveness. After editing your campaign, you may restore full ad delivery to your account.

    In short, if your ads don’t get a decent clickthrough rate (CTR) they will be disabled — your ads won’t be shown. Conversely, if you achieve a high clickthrough rate for a very general term, you will potentially be spending a huge amount of money. So, how do you get your ads more closely targeted to your audience? Here’s the secret — use the built-in tools that Google provides:

    • Phrase Match
    • Exact Match
    • Negative Keywords

    Remember, the default setting for AdWords is “Broad Match”. This will see your ad displayed when any keyword from your search phrase is typed in any order. So, if you target ‘Palm Pilot’, under Broad Match, your ad will be shown when someone searches for: airline pilot, auto-pilot, pilot light, palm reader, palm trees, etc. None of these search terms are in the least bit targeted!

    Getting Your Ad Targeted

    The first step in narrowing the audience to which your ad is displayed is to use the ‘Phrase Match’ feature in AdWords. This limits your ad to those searches that include your search phrases in order. To activate the ‘Phrase Match’ feature, simply enclose your search terms in quotation marks, for example, “Palm Pilot”. Now, only those terms that include both Palm and Pilot in that order will be shown your ad, such as: free palm pilot, palm pilot software, and palm pilot V.

    This may be a good first step for some, but I’ve found that it’s necessary to refine the distribution of my ads even further by using the ‘Exact Match’ feature. This is particularly useful for increasing the clickthrough rates of poorly performing ads. The ‘Exact Match’ feature will only display your ads when the exact search phrase is entered. The ‘Exact Match’ feature is activated once you place parentheses around your search term. In our example, we’d use the term [Palm Pilot]. Now, only the exact search term ‘Palm Pilot’ will cause our AdWords ad to be displayed.

    The third tool is ‘Negative Keywords’. This feature simply excludes your ad from displaying along side the search results of any keywords you choose. If you’re selling a product or service, you may want to use ‘free’ as a negative keyword, thus preventing your ad from displaying when the word ‘free’ is part of the search phrase. To enable negative keywords you simply place a minus sign in front of your search term. If, in our example, we wanted to exclude all searches for ‘free palm pilot’ and ‘palm pilot software’, our keyword list would include the following entries:

    • free
    • software

    Use of these targeting features will instantly place you into an elite category of Google AdWords users who have clickthrough and conversion rates at the top of their categories. Now, let’s look at how to set your bid.

    Creative Strategies for Successful Bidding

    There are many different approaches to the process of bidding for position within AdWords. A $5.00 minimum deposit is required to set up any AdWords account, but once it’s set up, any of the listed bidding options are available to you.

    The ‘Always be #1, No Matter What it Takes’ Strategy

    This strategy espouses the view that being #1 is everything. It is true that the top listing gets the most traffic. In some cases, the top listing can generate much more traffic than the lower listings — even the second listing. The top listing will also always be the most expensive spot for any given keyword or phrase, and, depending on the popularity of the search term and the bid required to secure it, the top listing may become very expensive to maintain.

    Also, as AdWords uses the clickthrough rate to weight your listing, it may simply be impossible to sustain the number one position at any bid price. Remember, too, that Google currently has a $50 per click maximum bid limit. The ‘Always be #1’ strategy is also prone to bidding wars.

    The ‘Never Bid More Than the Minimum Bid’ Strategy

    This strategy focuses on cost containment. Given a vast assortment of search terms, it is likely that some top bids will be only as high as the minimum bid. These terms will most likely be less popular terms that don’t generate a significant amount of clicks.

    This strategy assumes that even where the top bids are $1 or more, some visitors will read through the entire list of advertisements, and click on much lower bids. As of the writing of this article, Google AdWords bids can range in price from 5 cents, to $50.

    The ‘Position Yourself Next to a Weaker Competitor’ Strategy

    The thrust of this strategy is to position your listing as high as possible, while looking critically at competitor’s listings and offers. You then position yourself next to a competitor whose price is much higher than yours for the same item, or whose offering is in some other way uncompetitive with yours, thereby making your offering seem even more attractive.

    For example, if you mention a sales price of $149 for a Palm V in your listing, and the listing directly above or below yours displays a price of $99 for a Palm V, your offer appears overpriced. However, if there is a listing that offers the Palm V at $199, positioning your listing directly above or below the $199 price can make your price of $149 look more attractive.

    The ‘Steady State’ Strategy

    This strategy is similar to the ‘Never Bid More Than the Minimum Bid’ strategy, but with a twist. You calculate the amount that you are willing to pay for each qualified customer that lands on your site, and always bid exactly that amount. For example, let’s say that you calculate that you are more than willing to spend $1.35 for each qualified customer who lands on your site. You simply bid $1.35 on your best keywords, regardless of what others around you bid.

    This strategy is often employed by bidders who take a “hands off” approach to their bids. They simply want to set the account up once, and let it run on ‘autopilot’, without much (if any) maintenance.

    Of course, you can access your AdWords account as frequently as you like, and adjust your maximum bid to give the return on investment (ROI) you require. Measuring and maximizing your ROI will be the topic of the forth and final installment of this series.

    In Part 3 of this series, we learned how to precisely limit the distribution of your Google AdWords ad to only those prospects who are most interested, and how to beat the competition with creative bidding strategies. In this installment, we’ll learn how to:

    • Track the results of your ads and campaigns
    • Create a Return on Investment (ROI) report
    Tracking and Results

    From the moment your AdWords account becomes active, it begins to generate valuable data that will help you optimize and fine-tune your marketing activities. In order to bill you correctly, Google must carefully monitor the number of clicks that each and every one of your keywords and search phrases generates. Not only that, they also have to report on what your active bid was at the precise moment that each click was generated.

    It is important that you familiarize yourself with the reporting data that Google provides. Experience has shown that, although one may generate a vast list of search terms, keywords and phrases, it is invariably a very small subset of these search terms that generate the lion’s share of cost and clicks. The click reports will alert you to this, and help you optimize your activities.

    Some advertisers may have the capacity to track a click directly from a particular site and keyword back to the sale of an item at their site through the use of ‘cookies’ or other online tracking methods. If you have the ability and resources to create unique tracking URLs for each keyword or search phrase, I highly recommend doing this. The ideal situation for a any advertiser is to know which specific keywords, titles, descriptions, and products are driving the highest return on investment (ROI). Even if you are not capable of tracking a click through to sale, I recommend maintaining an ongoing ROI report as described below.

    Closing the Loop – ROI Reports

    Below is an example of a general Return on Investment (ROI) report similar to one that I’ve used extensively to manage cost per click sites, and to optimize our advertising dollars spent there. While it can be somewhat time consuming and resource intensive to generate a report such as this from your actual results, it is well worth the effort if you reveal information that saves you money on bids, or dramatically increases sales.

    Please glance through the following report format. Each element is described below.


    • Site: The cost per click site that generated the clicks for this reporting period for this keyword.
    • Keyword: The keyword or search phrase that generated the click and cost data.
    • Total Cost: The total dollar cost for all clicks associated with this keyword over the reporting period.
    • Estimated Impressions: An estimate of how many times the ad listing was actually viewed whether it was clicked on or not — this data is available from your AdWords reporting.
    • Clicks: The total number of times the ad listing was clicked during the reporting period.
    • Average Cost Per Click: The average cost per click during the reporting period.
    • Clickthrough Percent: The number of clicks divided by the number of estimated impressions for the reporting period.
    • Sales: The total number of sales generated by this keyword during the reporting period.
    • Cost Per Sale: The total cost divided by sales for the reporting period.

    The key to successful ROI is to manage your campaigns by sales. The optimum campaigns are driving the highest volume of sales for the lowest possible cost per sale. If you’re optimizing your listings according to how many sales they make and the cost of those sales, you have mastered the secret of the ROI report.


    The purpose of this series is to get you started with a solid foundation of great information learned through years of day-to-day experience with cost per click sites. The tips included in this series should place you well ahead of your competition in the quest for more sales and lower costs in Google AdWords. This is only a beginning, and you will develop your own style, methodologies and secrets as you become more familiar with the Google AdWords product. I wish you well in your online endeavors!