1. Tip #1 Start at the lowest bid possible, which for US customers is one cent per click. Load up a nice long keyword list and click on the traffic estimator button. Also in this testing phase, keep your daily budget very low. I suggest that it should never be for more than $20 per day, till you have completed the next two phases.



If your bid is too low for the sector, Google will show a whole load of your keywords as suspended and suggest a higher bid on those ones. If all your words are suspended, then you will have to increase your bid, but for the moment, I suggest you only increase your overall bid by one cent at a time and keep running the estimator again, till you have, say half of your words active.

2. Tip #2 Write at least three advert variations. Google have gone to the trouble of creating this powerful capability for you, so you would be crazy not to take advantage of it.

Professional advertisers always test different campaigns because they never know which will get the best results. If one of your ads turns out to pull twice as much as the other, then again, you would be crazy not to use it, right?

Now leave your campaign to run for as long as it takes to get between 50 and 75 clicks. How fast this happens will depend on your budget, your keywords and your adverts.

3. Tip #3 Once you have enough clicks, you can start to get really smart. Analyse the keyword list and see which keywords pulled the best response and what position they were in. Now look at the average price you paid per click on those keywords. It will probably be a cent or two below your maximum bid.

My advice is to now lower your bid on those words to the same figure as the average click price you have been paying. You will lose a few clicks, but not many and this will even out as your general click score improves, for which Google will reward you with a higher position.

Any keywords that have an average position of more than 8 are not working for you, because they are not appearing on the front page. If they have any clicks at all it is a miracle.

Now, as you have a shaved a little off the cost of some of your words, you can consider adding a little more on to some of the suspended keywords and bringing them into play, unless that means bidding at a much higher rate.

4. Tip #4 Keep testing and tweaking the three key Adwords variables; the bid price on each word, your headlines and your body copy. Make a change or two, test and measure; make another change and so on. Every time a change causes a fall in clicks or impressions, change it back and try something else.

Keep doing this and you will see your click throughs rise, your average cost per click fall and your traffic increase. Once you are happy with your results, you can then increase your daily budget.

And that is how to make Google Adwords a cost effective marketing tool instead of a cash drain.