Adwords is the name for Google’s pay-per-click (PPC) advertising program. It creates a way for companies to post their web site’s link along with a short pitch on the search engine’s results page. There are basically two ways to get your site ranked on the first page of a search engine query: use Google Adwords and/or search engine optimization (SEO) techniques. How do Google Adwords work and how do you use their tools to set up a targeted advertising campaign? Here’s how:

Understand the process before you use Google Adwords. The first step is to sign up for an Adwords account. You pick keywords which are words that are used to refer to your business. When someone visits Google to do a search and enters the keywords associated with your business, your ad displays in the far right column of the search engine’s results page. When a user clicks your advertisement and goes to your web site, you are charged a pre-determined amount for that click.

The benefit of Google Adwords is obvious. To get your web site ranked in the top 10 search results for your keywords using SEO takes weeks and even months. During that lag time, very few if any are finding your web site. Just getting quality backlinks through a standard SEO process is a long and tedious process. You don’t have that with Google Adwords because you are paying for the right to advertise whereas SEO is more competitive because it is free.

How do you choose your keywords? Google provides a free keyword tool where you either enter the URL to your web page containing your product copy or you enter a phrase with your keywords. When you submit the information, the keyword tool returns a listing of keyword and phrase suggestions that you can use in your targeted ad campaign.

How much are you going to pay? If you are a user to Adwords, you are going to pay an initial one-time $5.00 USD signup fee. Google Adwords uses a bidding system in determining how much you will be charged when a user clicks on one of your ads. You will bid on what you think your ad is worth per click and your competitors will place their bids as well. Google uses other factors such as the quality of ads to determine the weight of your bid price. New users to the Google Adwords program can use the Adwords Budget Optimizer to set their bids in a way to optimize for getting the most clicks as determined by the user budget. Whatever method you use, you never pay more than your budgeted amount per day. Keep in mind that if you set a low budget for a highly-competitive keyword (a high-priced keyword) then there are fewer chances that your ad will display as often. The thing to remember is that when a keyword is popular and competitive, it will naturally command higher PPC rates.

What about click fraud? The first reservation anyone new to Google Adwords has is in the area of click fraud. Specifically the concern one has before using Adwords is that a competitor will click their ad and prematurely force the daily budget threshold to be met. After the daily budget threshold is met, the ad will not be displayed again until the next day. Google Adwords has processes in place that weigh click activity with known fraudulent clicking behavior so as to do their best to protect you and minimize the risk of click fraud.

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