AdWords is the market leader in pay per click networks. One of the reasons for this is that AdWords rewards relevance and writing skills with higher position and lower cost per click. This allows the small business to compete on a level playing field with any mega-corporation.



The problem with AdWords is the learning curve. The system itself is deceptively simple. However, running an AdWords campaign is full of hidden challenges. When I started using AdWords I lost hundreds of dollars trying to figure out how to use it effectively. If you have used AdWords, you probably know the routine. Set up an ad campaign and expect to lose money until you see which keywords convert and get rid of the ones that don't.

Consumers are "fickle clickers." What works in one market, may be unsuccessful in another. Over time, you begin to get an intuitive feel for what will probably work, but it is not a science. The primary lesson I learned, and want to share with you is that there is no secret formula for knowing which keywords convert successfully.

The good news is that there is a way to stack the deck in your favor and increase your odds of achieving a positive return from the very start. Once your product or service is ready to roll out, follow these 4 steps to AdWords success:

First, research the competition. Make a list of the sites that compete directly with yours Also, look for an industry association site and add that to your list.

Second, build a keyword list. Use your favorite keyword tool to develop a list of relevant keywords. While bigger is better in this case, it is important to remember that AdWords will penalize you for using keywords that are not relevant to your product or service.

Here is a trick that will help you to increase your list of targeted phrases. Open your AdWords account, go to the tools section, choose the Keyword Tool and click on the "Site-Related Keywords" tab. Take that list of competitor's sites, and plug them into the keyword tool one by one.

Before you click the "get keywords" button, make sure you check the box that says "Include other pages on my site linked from this URL." The Keyword tool will return a list of keywords by group. Choose the ones that are relevant to your product or service and add them to your list.

This is where that industry association site becomes so valuable. These sites are usually filled with industry specific, relevant keywords that educated customers will be using to find products and services.

Third, now that you've got a large, targeted keyword list, it's time to do some competitive intelligence gathering. I like GoogSpy for introductory research because it's a free service.

Go to www.googspy.com and type a keyword in the search box. If the term is in their database, it will return a list of companies bidding on it, as well as similar terms. When you click on the keyword, it will list the first page of ad results, including the company, ad title, and body text.

One caveat with GoogSpy is that they are still building their database, so some words may not return any information. But when they do, the information is accurate.

Fourth, track the keywords over the course of two weeks. If the same companies keep showing up, you can be certain that it's because those keywords are converting for them.

Armed with this knowledge you can start your AdWords campaign by bidding keywords that have proven to convert.

While this method of tracking is free, it is time intensive, because you have to perform a manual search for each term. Although it is not a necessity, software is available that will automate the process for you and save lots of time and effort.