Your ad is ranked on search results and content pages based on various performance factors, including maximum cost-per-click (CPC), clickthrough rate (CTR), and the relevance of your ad text to the keyword you have chosen to sponsor. The name of the game is to write relevant ad text, have a high CPC and a strong CTR.

How do you achieve all this? The answer is structure. The Adwords service has a strict hierarchy. First up you will need to set up an account, each account can be divided into campaigns and each campaign has at least one Ad Group. The Ad Group contains the keywords and is associated with the actual advertising placement.

The maximum CPC is similar to the bid on Overture and it is directly related to your available budget and can be set for individual keywords or automatically budget optimised across a whole campaign.

The CTR of your ads depends entirely on how well you write the ad copy. Using the keyword prominently is a good idea. If you're looking for “blue widgets” then you're more likely to click an ad with “blue widgets” in the title and ad copy than one mentioning “red widgets”. Having a strong call to action is also a good idea so go for words like “get”, “buy”, “order” and “purchase”. The third part of the equation is relevancy which means that your copy needs to relevant to the keyword and here's where the structure comes in.

You need to group your keywords in closely themed ad groups so that you can write relevant text. It would be difficult to write relevant text for blue widgets and red widgets so set up different ad groups one for blue widgets and one for red ones. If you end up with 50 Ad Groups with one or two keywords only don't worry. This might seem like a lot of work to start with but it will make you life a whole lot easier in the long run because the structure gives you control.

At campaign level you can target Ad Groups to geographical regions so if you're products are called widgets in the UK and something else in the US. Don't panic! You can set up a campaign called “Widgets US” and create Ad Groups based around US terminology.

You should also take a look at keyword matching. If you want to advertise on the phrase “French lessons” you probably don't want to display ads or get click throughs from people looking for “French polishing lessons”. You can handle this by adding negative matching on the word “polishing” so you ad group would contain the keywords “French lessons” and “-polishing”. This action will reduce your ad impressions but increase your CTR and ranking and save you cash. Use the Google Keyword Tool to identify possible negative keywords they'll always be pretty obvious and sometimes surprising too!

Now with the structure in place you can activate the campaign and see what happens. You're going to have to manage the campaign quite closely at first but pretty quickly you'll see which ad groups are performing. When you find an ad group that has low CTR change the text or even better create a new ad group containing the same keywords. Then write some new text taking a look at your competition for tips,. Running two parallel ad groups will allow you to objectively identify the ad placements that work best for your campaign.