In this video we’ll be looking at what it takes for the do-it-yourself advertiser to build a successful pay-per-click campaign using the AdWords program. We’ll start by looking at why you should consider advertising with AdWords; and I’ll show you how to set up your account and place your first ad.

After the basics we’ll go into detail on how to structure your campaign, how to research, select and target keywords; how to analyse performance and track results. We’ll cover it all. And y the time we get to the end you’ll know exactly what it takes to do well with AdWords. We’ve got a lot to cover but before we get started I need to address one quick point. Paid search marketing is one of the hottest topics in business today and competition amongst the leading providers for your advertising dollar is fierce. That said, let’s get started by taking a look at the basic concept of AdWords and why it’s proven so popular with advertisers.

Why advertise with Google AdWords?

World wide people use the internet to search almost 200 million times a day every day of the year. And research in the United States indicates that more than one thirds of those searches the user is actively looking for a product or service to buy. Some 70% of American households now use the internet as an information source when shopping locally for products and services, and 85% of Google users in the U.S. have made an on-line purchase in the last 6 months.

Stats like those have suddenly made good exposure on the world’s number 1 search engine a business necessity in more and more industries but, as you are no doubt aware, achieving a top position amongst the natural search results on Google is like a mirage in the desert for many companies.

It’s no wonder then that over 450,000 businesses around the world so far have decided that the answer, in part at least, is Google’s pay-per-click program. Google pay-per-click ads have traditionally been small text ads that are triggered when users search anywhere on the Google network using keywords that match those that the advertiser has specified for their campaign.

Ads are displayed beside and sometimes above the natural search results, but only incur a cost when somebody clicks on the ad. Pay-per-click advertising is not a cure-all for companies having trouble achieving good search engine rankings. Indeed any marketing consultant worth his salt will tell you that paid search marketing should be carried out in conjunction with optimization of your web site for the natural search results, not as a substitute. But as I said it’s hardly surprising that advertisers jumped at the chance when Google offered that AdWords program. Here’s why.

With AdWords you can drive targeted traffic to your website with performance-based control; you choose your own keywords that tell Google when and where to show your ads, and you only pay when users click those ads. Set a daily budget and a maximum cost per click, and you’ll never spend more than you want to.

Search marketing is cost effective. Leading researcher Piper Jaffray has estimated the cost of search marketing generated sales leads to be the cheapest of all the major marketing methods commonly in use today; and while click costs have certainly risen since that study was released the fact is it is still possible to generate AdWords traffic for less than 10 cents per click on some keywords: targeted prospects just don’t come any cheaper than that.

It costs only five dollars to activate an AdWords account, and there is no minimum spending or time commitment. AdWords is do-it-yourself advertising in minutes with just a credit card. Simple text-based ads mean there’s no need for graphic artists or agencies to create ads for you; you can change your ad copy as often as you like and the changes show up immediately; AdWords ads show up on thousands of Google network partner sites across the internet including some of the web’s biggest names like AOL and MySpace. AdWords geographical targeting options allow advertisers to target customers in specific countries or cities right down to a radius around individual business addresses if required.

And unlike other forms of advertising, tracking your return on investment (ROI) is fast and easy with AdWords. You can spend a thousand dollars on an AdWords campaign and know your return on that spend in a matter of hours.

So, can all businesses benefit from advertising with AdWords? Well, the short answer is no: some industries are just not well-suited to it. Businesses that trade in wholesale commodities would be one example. However, AdWords has proven effective across a remarkably wide range of industries including the service sector. The bottom line is if people are searching on-line for your product or service then there’s an opportunity to reach them via pay-per-click advertising. And using the tools and techniques we’ll discuss in this video, it’s never been easier or as cost effective to establish whether that’s the case for your business as it is today.

Of course, not everyone will click on your AdWords ad, in fact only a very small percentage will; typically, anywhere from zero to about 3 or 4% of all the people who view pages displaying your ad. But it's a numbers game since Google handles over 5 billion searches a month and as long as your product or service is in demand of the numbers are definitely there. Of course, some advertisers do much better than that. Advertisers like hospitalgowns.com. That’s a small Los Angeles company getting a click through rate of 6% and 5000 visitors a month from just 10 keywords. And profilerelocation.com, a Michigan-based business that gets up to 70% click through on some of their keywords; that translates to 16,000 visitors a month for them, a far cry from the 1200 a month they were getting before they started with AdWords. You can read more about these and other AdWord success stories at the address on your screen now but in the meantime we need to prepare the groundwork for your own campaign and that starts with the next segment.

Terminology

Welcome back. As I said earlier we’ve got a lot to cover but before we launch into it, I need to tell you about the approach I’ll be taking and clarify some terminology. Firstly, aside from the small text ads we normally associate with AdWords, Google now offers a number of other ad formats and payment models with more arriving all the time. However, for reasons that I’ll explain later those simple text ads look set to continue as the most commonly used format for sometime to come. Now that’s good news for our purpose here because it means we can show you the whole AdWords process end-to-end as it applies to text ads without confusing the issue with the complexity introduced by other options. I think you’ll find there’s more than enough content in this workshop to keep new users off the street for sometime to come as it is.

So, that’s the first point. We’ll be looking exclusively at pay-per-click text ads. If you are keen to explore other formats like image ads, video, click-to-call, mobile ads and alternative pricing models like CPM based site targeting then you’ll want to get yourself a copy of Volume 2 in this series. Likewise, we don’t cover Google Analytics in this edition. Google Analytics is a full noise web site traffic analysis package that is integrated into the AdWords control panel but doing it justice would require a stand alone workshop on its own. AdWords has basic tracking functionality that we do cover, however.

Next, a word about the challenge faced by smaller advertisers: AdWords offers exciting opportunities for advertisers of all sizes but like any genuine business activity it requires work and commitment to achieve long-term success. The commitment required in time alone frightens some people but try to keep in mind that the practices I talk about during this workshop are intended to address the needs of companies with up to 100 employees.

Smaller advertisers with limited resources would be well advised to start with just one or two of their most profitable products and then ramp things up later on down the track. I also need to mention that for the most part the approach and practices I’ll present are based on the assumption that you are operating with the default tools available to advertisers in the AdWords control panel. However, I will make reference to various 3^rd party tools where relevant. Finally, I’d like to cover some terminology you’ll need to know as we move forward.

First up is the distinction between Google’s traditional keyword targeted advertising format and one of the new options I mentioned a minute ago called site targeting. Keyword targeted ads are what we’ve talked about so far: ads that are triggered when users search on Google using keywords that match those you’ve specified for your campaign. Keyword ads only incur a cost when someone clicks on the ad. Site targeted ads, on the other hand, only run on selected partner sites and are also billed based on the number of impressions; the price paid is the same regardless of whether users click on the ad or not. I’m making the distinction here because you’ll see references to site targeting in the AdWords control panel and elsewhere but, as I said earlier, the focus of this workshop is keyword targeted text ads.

So, unless I say otherwise, anytime I use the generic terms ad or advertising I’ll be talking about keyword ads. At various times you’ll hear me refer to keywords as key phrases, search terms and search queries, both in the singular and plural; I’ll use those terms interchangeably to refer to the same thing: the words and phrases that users type into the search box on Google or a Google partner site. Okay, there are numerous other terms that will require explanation as well but I’ll do that as we go. After the break we’ll get cracking with a discussion about how to define some goals for your AdWords campaign. Let’s take a look at that.

Defining goals and key performance indicators

The first step in any advertising campaign should be to ask yourself what it is that you are trying to achieve. When you know that you can define campaign goals and plan accordingly. For some advertisers, particularly those in the service sector the most appropriate goal will be to generate new sales leads. Marketing professionals will often express that objective in terms of generating a specified number of leads during a given period at a target cost per lead.

In this context the cost component is the cost is the cost of advertising with AdWords; the mechanics of generating leads on-line might be as simple as encouraging asking visitors to pick up the phone, or send you an email but it’s also common to ask visitors to fill in a form to receive a free report, request a call-back or sign up for a newsletter. In the world of direct response advertising each of those actions is called a conversion event. A visitor converts when they take the action you are trying to encourage; to complete that registration form, for example. For other advertisers the goal will be to generate direct sales and that can be expressed in a similar format. To generate a specified number of orders during a given period at a target cost per order

The conversion event in the sales scenario is obviously the placement of an order; the number, value and unit cost of these conversion events become what are known as key performance indicators which can be tracked and measured against budgets established for that purpose. Other key performance indictors that you want to track include the number of ad impressions, the click through rate and the rate of conversion.

The number of impressions is the number of times your ad is displayed. The term click through rate refers to the number of clicks your ad receives as a proportion of the number of impressions. Now that’s obviously an important number in any pay-per-click campaign but as we’ll see later this matrix takes on extra significance with AdWords because of the way Google uses it to rank and position ads. If you are tracking purchases, the conversion rates is the number of sales you make expressed as a percentage of the total number of visitors that click through to your site via an AdWords ad. Again this step will become a crucial indicator of your ability to reach your goals.

Aside from the objectives I’ve just mentioned, your AdWords campaign can also be used to pursue other more general marketing goals as well. For example you may want to protect market share by making sure your competitors don’t have free reign in the pay-per-click channel; you may have branding objectives such as exposure to searchers in the research phase of the buying cycle, not just when they are ready to buy. Or perhaps you need to drive sales leads to reseller distribution channels. Goals like these can be harder to quantify and measure, but that doesn’t mean they aren’t valid objectives.

I’ll talk more about campaign objectives and key performance indicators in later segments but after a short break we’ll continue the planning and preparation phase by talking about how an AdWords account is structured, the best way to organize your campaigns.

Campaign Structure

In this segment we’re looking at how an AdWords account is structured and the best way to organize your advertising campaigns within that framework. AdWords are structured on three levels: account, campaign and Adgroup. As you might expect, the Account level deals with administration issues, email address, password and billing information.

A single account can house up to 25 different AdWords campaigns, and those campaigns can be a mixture of keyword targeted and site targeted campaign. Regardless of the campaign type the ads in each campaign are governed by unique settings for geographic and language targeting, daily budget, campaign duration and ad distribution preferences. We’ll cover all those settings in later segments.

There are no hard and fast rules about how to structure your campaigns. What’s best for you will depend on the size and nature of your business. For example if you carry numerous product lines you might start by having separate campaigns for each of your product categories. A restaurant chain, on the other hand, might run separate campaigns for each branch in the chain or, perhaps, each state that the company operates in. To assist with this, you can name campaigns in a way that reflects the way you want things organized. Each campaign can contain up to 100 Adgroups. For each Adgroup you create one or more ads and select a set of keywords to trigger those ads. The flexibility of this structure is designed to allow you to cluster keywords into logical groups organized around common themes, and then write ads specifically for those themes. Doing that improves ad relevance and, therefore, the click-through-rate. A keyword theme might be a product or it might be a concept - whatever makes sense for your particular business or campaign.

For example a mountain bike retailer might start with three campaigns: bikes, parts and accessories and those campaigns might be sub-categorised into Adgroups named to represent several different product lines. Each Adgroup will house keywords directly related to the Adgroup theme. For example the helmets Adgroup in the accessories campaign might start with 4 keyword phrases and the ad written for that Adgroup would specifically target a Google user who searches using any one of those 4 keyword phrases. If the retailer had not structured his campaigns this way and instead deposited all his key words into a single Adgroup he’d be forced to run all-purpose ads like this one.

Ads like that one tend to have mediocre results at best. The flexibility of the AdWords system is such that if he wanted to the retailer could break the helmets Adgroup down further to a number of sub-categories for even better targeting. For example, he might have individual Adgroups for each brand and size that he stocks. Doing that would make it even easier to write ads that offer an even closer match for the keywords customers are likely to use when they search for one of those particular products.

How many keywords should there be in any Adgroup? It depends. In some situations 10-15 keywords might be appropriate, whereas in others it might be 40, 50 or more. It comes down to the number of keywords that can effectively be represented by a single ad in any particular situation.

The most common approach to designing a new campaign structure is probably to start out by naming Adgroups on the basis of the products and services you offer and let that drive the organization of campaigns. Use that as a draft plan to guide the initial stages of your keyword research and list development.

A site map of your web site can be a good way to kick start the process for larger organizations. Keyword research is often a voyage of discovery, as you learn of new ways that customers can and do find your business. As a result, you will almost certainly want to refine whatever structure you start out with as work proceeds on developing a keyword list using the tools and techniques I’ll show you later. That’s okay, even experienced advertisers designers find that designing a new campaign structure is often an incremental process, that comes together in steps but for that reason, it pays not to do any data entry in the AdWords control panel until after your keyword list is completed and you’ve settled on a new plan of how the structure will be laid out.

The mountain bike retailer in the example I used earlier provided a glimpse of the capacity of the AdWords system to accommodate complex campaign structures. And there’s various other ways that a company can utilize campaigns, Adgroups, and keyword themes that will become apparent as we progress through the workshop. For example, a more sophisticated structure might reflect the classic buying cycle common to many industries, or geographical targeting requirements of a company that operates in many different markets. But be careful not to bury yourself under too much detail. Just because you can break Adgroups down into ever smaller units doesn’t mean that you should.

The number of Adgroups appropriate to a retailer that stocks hundreds of products will be quite different to the much simpler requirements of a small bed and breakfast hotel. At the end of the day you need to find a compromise that effectively targets your most important keyword themes but doesn’t over complicating campaign management. Okay.

Understanding the role of Adgroups, will be one of the most important things you can do toward achieving success with AdWords; that and understanding how Adgroup targeting fits in with the subject of the next segment: the AdWords quality score system. Let’s take a look at that.

The quality score ad ranking system

In this segment I’ll be explaining the quality score system Google uses to evaluate your keywords and regulate the display of your ads. Like campaign structure, understanding the quality scores system will be crucial to your chances of success with AdWords so it might pay to review this section if you don’t quite get it the first time through. Here’s how it works.

You’ll recall that in the last segment I described how each AdWords campaign consists of one or more Adgroups. For each of those Adgroups you create one or more ads and select a set of keywords to trigger those ads.

The set up procedure requires you to set a maximum cost per click for the AdGroup as a whole, but you can also nominate cost per click settings for individual keywords which differ from the Adgroup setting. Any keyword that doesn't have an individual cost per click will default to the amount set for the Adgroup.

Ad position on Google’s search results page is sold on option basis. So your cost per click settings constitute bids in that option: the higher you bid, the higher your likely position on the results page amongst competing ads from other advertisers. The higher an ad’s position, the more likely it is to attract user attention and clicks.

However, bid amount is not the only factor that determines ad position. The Google brand was built on the fact that their search results were usually more relevant to users than results from other search engines. So relevancy is prized by Google, and they figure that if a user clicks on an AdWords ad a must then the user must have found that ad to be relevant. Therefore they equate a high click through rate with strong relevance and vice versa. Remember, click through rate refers to the number of clicks that your ad receives as a proportion of the total number of times the page carrying the ad is displayed.

At Google, ads with higher click through rates are rewarded with higher positions and lower costs than ads with poor click through rates. To facilitate this every keyword that you run is assigned a quality score, which represents Google's prediction for the future click through rate of ads triggered by that keyword. Ads are ranked for position on a combination of your maximum bid and the keyword quality score. The two are multiplied together to produce what’s known as an ad rank for the keyword. Ad position is then determined by comparing your ad rank against your competitors ad rank. The higher your Ad Rank the higher your ad position.

Even though the ranking formula uses the maximum amount you're willing to pay for an ad in the calculation of ad rank that doesn't mean you'll end up paying that rate for every click. Google monitors the performance of both your ad and your competitor’s ad and automatically charges you the least amount required to maintain your position. Google calls this feature the AdWords bid discounter.

To illustrate how this works, imagine that you have set a maximum bid on a keyword to $1 per click and Google assigns that keyword a quality score of 5. That keyword would have an ad rank of 5.0. If your competitor’s ad rank for the same keyword is only three then your ad will display above his even though his maximum bid might be more than yours.

In this scenario the bid discounter makes sure you are only charged $.61 per click, because that's the amount required to keep your ad rank above the competitor’s ad rank and your ad position above his. Note that the competitor in this scenario wouldn't necessarily pay his maximum bid of $1.50 either. He'll only pay the amount required to keep his ad rank above the next competitor below him.

You probably noticed that the quality score assigned to each advertiser in that example was different even though they were both using the same keyword. And the reason for that is because quality scores are unique to the context in which each advertiser uses a particular keyword.

Quality scores are based on a number of factors: your click through rate with that keyword; the historical performance of that keyword across all advertisers; the relevance of your ad text and other factors affecting relevancy which Google declines to reveal. We’ll be looking at each of those factors individually in later segments but what’s important to understand right now is that 2 advertisers can have different quality scores for the same keyword. What’s more, Google doesn’t publish these scores. They won't tell you the score assigned to any of your keywords.

As you can imagine, that’s highly controversial amongst advertisers but that’s the way it is for the moment. The quality scores I used just now to demonstrate the mechanics of ad ranking were chosen simply to illustrate how it works but I’m told that Google does in fact use a scoring range of 1 to 5. Okay, hopefully you’re not too dizzy after that lot because we’re not quite finished with all this yet. In the next segment we’ll be looking at how the way Google uses quality scores to regulate the display of ads on its network. So catch your breath and I’ll catch you on the other side of this short break.

Keywords status and minimum bids

Welcome back. In the last segment I described how every keyword you run is assigned a quality score by Google and the role that score plays in the positioning of your ad. As we’ll see later, displaying your ad when someone searches on Google is not your only distribution option but, for ads that are served in response to a search, Google also assigns a minimum cost per click. That minimum bid is determined entirely by the keyword quality score. The higher the quality score, the lower the minimum bid, and vice versa. Keywords with a high score may see a minimum bid as low as one cent, whereas those with a low score will be tagged with a much higher minimum. The idea is that by making it more expensive to run keywords that are less relevant the returns available from those keywords won't justify the investment required, making them less attractive to use. A keyword can only trigger the display of search ads if your maximum bid is equal to or greater than the minimum bid assigned to that keyword by Google. Keywords that don't meet that don't meet that requirement are made inactive and won't trigger ads. Once again, if you haven’t set an individual keyword bid, Google will use the default Adgroup bid.

There are also one or two other points to keep in mind about this aspect of the system. Firstly, the bid discounting mechanism that I described earlier won't discount below the minimum bid. The minimum bid for a keyword has no relationship to the number of competitors bidding on that keyword. And as well as the components I described in the last segment Google also considers the landing page when assigning a quality score for minimum bid purposes.

The landing page is the page the user is sent to when they click your ad. I’ll talk more about this aspect in the segment on landing pages later.

Finally, it’s important to understand that because a keyword’s quality score fluctuates over time in response to changes in click through rate and the other score components, the minimum bid is dynamic. That means the status of the keyword can change in active at any time if the quality score deteriorates and the minimum bid rises above your maximum bid setting. On the other hand, the reverse is also true - an improvement in quality score can cause the minimum bid to fall. You can move an inactive keyword to active status either by improving its quality score through optimization, by increasing its maximum cost per click setting to the required minimum bid. We’ll be discussing how to optimize a keyword at length in later segments. You can identify any keywords that are currently inactive by looking at the detail level of Adgroups in your control panel, or by running a report

The same applies when you want to know the minimum bid for any keyword. Again I’ll show you how to do both in a later segment.

Okay, fortunately that’s about as hard as the techno-babble gets regarding how the system works but by now you can probably understand why Andrew Goodman, one of the world’s leading authorities on AdWords, has taken to calling this the Google Black Box system. Only Google knows what really goes on inside the box. The rest of us are left guessing to an extent. By the way if you’re interested in reading about the AdWords program, I can recommend Andrew’s book. Anyway now you understand the context in which AdWords operates we can get started on creating a new account and your first ad. That’s up next.

Your First Ad

In this segment we’re going to step through the process of setting up an AdWords account for the first time. If you’ve already set up an account you may want to skip forward at this point. But if you’re new to AdWords you’ll probably want to follow along. You’ll recall that earlier I described how your account is designed to accommodate up to 25 separate campaigns, each of which can house up to 100 Adgroups. To make the account setup procedure easier the AdWords system will automatically create you first campaign and Adgroup for you. You only need supply a keyword list and create an ad for that Adgroup. In the next segment I’ll show you how to change your ad to anything we set up during this phase via the Control Panel created for this account. So for now we’ll just enter the bare minimum required to establish the account.

To get started go to the AdWords login page at AdWords.google.com and click the signup button. On the next page you’ll be asked either to choose either the standard edition or the starter edition. We want the full range of AdWord features so it’s the standard edition for us.

In step one you choose language and location targeting preferences for your first campaign. For most viewers of this video the language will be English. If you want to target more than one language you’ll need to build separate campaigns for each.

We’ll be discussing the location targeting options at length in a later segment. So for now we’ll simply go with the default choice of country targeting, which means your ads will only be displayed to users located in the country or countries you select. Having chosen that option the next screen asks you to select the countries you want to target.

In step 2 you create your first ad. Start by entering a headline, then a description of your product or service. Again we’ll be discussing how to write an effective ad later as well. Note that as you enter the details the system automatically shows you how the finished ad will look. Also note that you’ll be asked to enter two URL addresses. The display URL is what appears in your ad. The destination URL is where the user is sent to when they click your ad.

Now it’s time to enter the keywords that will trigger your ad when users search on them. You’ve got a keyword generation tool available to you here, but since only one Adgroup will be created during setup you're better off adding the bulk of your keywords via the control panel that’ll be established for this account. Later on, we’ll use a stand alone version of this tool as part of a more organized approach to keyword list generation. For now I’ll just enter three phrases to get us going.

In the next step you are asked to choose a billing currency, set a daily budget for the campaign, and a maximum cost per click for the ad you’ve just created. Setting a daily budget helps you automatically control your advertising costs. That way, you won't use your entire budget for the month in just one day. There is no minimum or maximum requirement, and you can change it at any time. For the moment I’ll set it at $25.

The next entry is the maximum cost per click you are willing to pay. The amount you enter here will apply to all keywords in the Adgroup. In the next segment I’ll show you how to bid on keywords individually. Your maximum bid is obviously an important consideration that we will explore in detail later as well, so for now I’ll set it at just $1.

If you click the traffic estimator link below the bid field, the system will tell you the number of clicks you're likely to receive per day at the current bid, the position your ad is likely to occupy, and the average cost per click. That cost will normally be less than the bid amount in most cases. That's the effect of the bid discounter working to make sure you only pay as much as required to maintain the reported ad position.

The estimates differ for each keyword because each one competes in a separate option. The traffic estimator certainly looks impressive, but unfortunately the large number of variables involved makes these estimates notoriously unreliable. So don't be surprised if your actual results are different, sometimes wildly different. At least this way you can get a feel for things by recalculating the estimates for different bids.

When you are happy with what you’ve got, click the continue button to move on.

After that it’s fairly routine stuff. All you need to do is to review your settings and create your account. When you’ve done that Google will send you an email containing a link to log in to your new control panel. When you log in you’ll see a message asking you to enter your credit card details. You don't have to pre-fund your AdWords account. Google will start you off with a modest credit limit which they’ll increase as you operate the account.

By the way, you may be concerned about the potential for someone to run up a large bill by clicking on your ads repeatedly. It can happen and you’ve probably already heard of the term for it: it’s called click fraud but since we have a segment that discusses the issue in some depth later on we’ll leave it for now. Okay. That’s all there is to getting started. We now have a single ad that will be displayed any time a user in the country we selected selects a search on any of the three keywords I specified. After the break, I’ll be back to take you on a tour of the AdWords control panel.

Navigating the AdWords control panel

In this segment we take a look around the AdWords control panel so you’ll how to add and edit campaigns, Adgroups, ads and keywords after the initial set up. As you’d expect, control panel navigation reflects the campaign structure we discussed in an earlier segment.

When you log into your account the opening view of the campaign summary page provides an overview of all campaigns in your account. Drilling down on a particular campaign will get you to a summary of all Adgroups in that campaign, and drilling down on any Adgroup will reveal keywords and ads associated with that Adgroup. To illustrate how things work we’ll use the fictitious mountain bike company account that we set up in the last segment.

The control panel is organised into four areas: campaign management, reports, analytics and my account. You can search on any keyword or phrase used in any campaign, Adgroup, ad or keyword used in your account using the search box on the far right. For in-depth analysis you’ll want to download or print reports created from templates available in the reports area. Performance stats are also displayed on a screen at each level of the account. Statistics common to all levels are the number of clicks, the number of ad impressions, average cost-per-click, total click cost and, providing conversion tracking is switched on, conversion rate and cost per conversion. Since we are currently at campaign level the stats on this page are summary totals for each existing campaign. The reporting period is governed by the date range you specify in the same location on every level.

At each level of campaign you can perform management tasks relevant to that level. For example on this level you can pause, resume or delete any existing campaign by checking the selection box to the left of the campaign name and then clicking the appropriate button at the head of the table.

To review the control settings for a selected campaign use the edit settings button. Settings include the user-specified parameters entered when the campaign was created: campaign name, daily budget, start and end date, language and location targeting. But there’s also two system generated settings that I need to mention at this point. The first controls the way ads are served when an Adgroup contains more than one ad. With this switch selected Google will automatically rotate ads in the same Adgroup evenly until the click through rate of one ad starts to out-perform the others. At that point the system will start showing that ad more frequently. When you create a campaign the default setting for this optimization feature is on.

The second setting governs ad distribution: whether or not ads in this campaign are to be shown throughout the Google partner network. That’s the subject of our next segment but for the purposes of this segment we’ll assume that ads are currently only displayed on Google.com for the time being. We’ll return to the other settings in this panel later on.

To create a new campaign navigate to the campaigns summary page and click the ‘create new keyword targeted campaign link’. When you do that you’ll notice that the set up wizard is almost identical to the format used during the account set up procedure. The major difference is that this time you are given the option to copy and modify the settings from one of your existing campaigns – a great time saver in some circumstances. To view the Adgroups in the campaign click the campaign name on the campaign summary page. At this level performance stats are obviously broken out by Adgroup. Again use the selection boxes and these buttons to rename, pause, resume or delete an existing Adgroup. Use this button to change the default maximum cost-per-click for an Adgroup or click this link to create a new Adgroup. Once again, the set up wizard is consistent with what we saw when we created the account. Just name the new group and set up at least one ad with one keyword to get the group started.

To work with the ads and keywords that constitute an existing Adgroup click the group name on the Adgroup summary page. By default Adgroups are organized into 3 tabs: summary, keywords and ad variations. You can also choose to see all the details on one page if you prefer it that way.

At this level stats are reported individually for all keywords in the group. If any keywords have been made inactive by Google, a message to that effect will appear at the top of the page. Note that it says ‘Inactive for search’. If the campaign has been set up for distribution on the content network inactive keywords can still trigger ads for that purpose. You can quickly identify the affected terms by scanning the status column for keywords labelled ‘inactive’. To raise your bid to meet Google’s minimum just click the message link and set your bid on the next page.

To increase the bid on multiple keywords select those keywords and click the edit keyword settings button. The tool on the next screen will list the minimum bid for each selected keyword and allow you to enter a new bid. You can also use this tool to specify an individual landing page address for each keyword as an alternative to the default Adgroup landing page.

To add new keywords to an existing Adgroup use this link on the keywords tab. Add the keywords and phrases into the box one at a time, each on a separate line. By default, the system will assign the Adgroups settings for maximum bid and landing page address to new keywords, but you can specify individual settings here as well by entering a keyword list in a special format. Just replace keyword, maximum cost-per-click and landing page address with your own data.

Be sure to retain the asterisk between each item and save your changes. You can enter up to seven hundred and fifty keywords at a time this way. Google calls it power posting. You may find it easier to format your list in a spreadsheet and then copy and paste that list into the keyword box. To create a new text ad or edit an existing ad, use these links on the ad variations tab.

And once again, the same familiar format is used so hopefully you are comfortable with that by now.

We’ve now navigated vertically down through all levels of the control panel so we are almost done. Navigating horizontally on the campaign management tab, the next link takes you to the tools section.

The tools that you’ll find in this area are all designed to do a specific job managing your campaigns and we’ll refer to many of them in later segments. The same goes for the remaining items on the navigation tabs, conversion tracking, analytics and reports.

As you’d expect changes to your credit card details, email address or password can be made in the My Account area. You can review your billing records and arrange control panel access for the members of your team there as well. Okay, now you know your way around the control panel, we can get on with some of the more interesting topics starting with your ad distribution options. That’s up next.

The Google Ad Distribution Network

When you create a new keyword targeted AdWord campaign your ads are set to appear not only on Google but also on an extensive network of partner sites. According to Google this combined reach makes it the largest on-line advertising network in the world reaching 80% of all US internet users and international audience in over one hundred other countries. Besides Google.com, other Google properties that carry AdWords include the Google shopping channel and Google groups. Google's network partners fall into two categories.

Firstly, there are those sites which use Google to provide search results for them; these include many of the top 100 destinations on the Internet and thousands of less well-known sites. These partners are members of the Google search network, where your ad is shown in the same way as if the user had carried out the search on one of Google's own sites. Historically, America On Line has been the most important search partner, since they have around 20 million subscribers on their own. But even AOL is dwarfed by the 100 million members of the social networking site MySpace, which Google has recently agreed to provide with search results and advertising.

The second category of partners are consumer and business content sites ranging from major publishers such as USA Today, Fox News and CNN to thousands of smaller niche subject sites and blogs. Google scans the content of these partners sites and automatically selects ads to display that have keywords closely matching the subject area of the page. You've almost certainly seen these ads on many pages labelled as ‘Ads by Google’. For example, a story about visiting Miami on this travel page is flanked by ‘Ads by Google’ for cheap airline tickets. Google calls this contextual advertising, but it’s also known elsewhere in the industry as content targeting. With over 200,000 sites worldwide now earning commissions on such ads this is probably the fastest growing segment of Google's business, but it's not without its critics as we’ll see in a moment.

Google also works with large circulation news letter publishers like about dot com to place ads matched to the subject matter of newsletters delivered to millions of subscribers via e-mail, and they place contextually targeted ads next to messages sent by users of their own very popular email program which is marketed as a free service called Gmail.

You will recall from the last segment that you can customise the distribution of keyword targeting campaigns via the campaign settings area on the control panel. These settings allow you to configure distribution in any one of five ways: distribution via Google properties only; via Google and search network partners; via Google and the content network; via Google and both partner networks; and finally via the content network on its own.

When it comes to deciding whether to show your ads on search partners’ sites, the answer will generally be yes. It's worth knowing, however that many larger search partners, including AOL, typically only carry the top three or four ranked Google ads on the first page of their results. Lower ranked ads are shown on subsequent pages. Some industries are known to enjoy above average conversion rates on AOL, in particular, which makes the competition for placement worthwhile in those cases. But there's no one right answer, so you need to track your return on investment to see what's right in your circumstances. Business-to-business advertisers especially need to think carefully about distribution on AOL since AOL members tend to be consumers, rather than businesses.

What about distribution on the content network? Historically, the decision to opt into contextual advertising on content partner sites, in partner newsletters and Google's own Gmail has been a good deal more contentious. After the break we’ll take a close look at the issues involved, and the first of several tips to maximize returns from the contextual format.

Contextual Advertising

In this segment we’ll examine a number of issues associated with the decision whether or not to opt into contextual advertising on the content network. You’ll recall that with contextual advertising Google scans the content of web pages on partner sites and automatically selects ads to display that are key words closely matching the subject matter of each page.

Given that search activity only accounts for about 5% of all page views on the web distribution on the content network can significantly increase ad exposure and site traffic. For some advertisers the quality of that traffic as measured by conversion rates is just as good as search traffic. Now not surprisingly Google is quick to wheel out case studies where contextual advertising has been successful but content targeting is fundamentally different to search advertising so for many advertisers it can be a different story.

For a start, there's no site selection option in the default format offered by Google. You can't specify which partner sites you want to show your ads on. And not all content partner sites are high quality, high traffic sites that are consistently updated with fresh information.

There's also no advertiser control over the relevancy of the content your ad appears next to but perhaps most important of all people reading articles on content sites are generally not in decision-making or buying mode . Search ads work well because you are connecting with users at the exact moment they are actively searching for what you offer; so there is a difference between users who are in search mode, and those are in a more passive browsing mode. These factors contributed to a somewhat negative perception of content targeting amongst advertisers in the early days, a perception that was reinforced by anecdotal evidence of low returns, right across the board.

However, Google has since introduced a number of refinements which have had a positive impact on returns. The first of these enhancements was a system called ‘Smart pricing’ that adjusts the price of contextual ad clicks, which Google determines may be less likely to convert into a sale than others. Smart pricing adjustments only lower the amount paid by the advertiser. They never raise the cost, but typical of Google’s black box mode of operation, these adjustments are made in the background. Details of specific reductions are not made available to advertisers.

Smart pricing was followed by the separation of the two networks for bidding purposes. As we saw in the last segment, you can now set a campaign to run only on the content network, if you want to. For dual purpose campaigns that run on both networks; you can also enable a feature called content bidding; content bidding allows you to make a separate bid for ads running on content sites and campaigns that also run on the search network. To enable content bidding here’s what you need to do.

First enter the campaign settings area and check the content bids box; next, select any Adgroups that you want to separate content bids for, and select the button marked ‘edit bids’. Enter your content bids in the space provided; the minimum bid for content targeted ads is fixed at one cent; the default bid is the bid that was entered when the Adgroup was originally set up; with content bidding enabled, the default bid will only apply to search ads.

Another significant enhancement has been the introduction of a 'site exclusion filter’. In the default format contextual advertising is an all-or-nothing proposition, meaning your keyword ads are either available for display on all content partners sites on the network, or none of them. Opting in and can therefore result in your ads being displayed alongside content of dubious quality or relevance. The site exclusion feature is designed to address the problem. To prevent your keyword ads from appearing on specific partners sites, use the site exclusion filter to tell Google which sites you want to exclude. You might want to think that of it as a blacklist or more correctly a series of black lists since each campaign has its own list.

To add a site to the list, navigate to the tools tab in your control panel, click the edit campaign negative site link and then select the campaign to edit. For domains that you want to exclude just enter each address on a separate line and click save when you’re done.

Okay, that’s how to add your sites to the black list but how do you go about identifying which sites to ban in the first place? That’s something I’ll talk about in the segment on reporting.

What about choosing your own list of sites to advertise on from scratch? Google does offer that as an option: it's called site targeting but as I mentioned earlier, site targeting operates on a different billing model so it’s beyond our scope in this particular workshop. Okay. In the next segment we’ll be looking at why you might want to run your search and content campaigns separately. Let’s take a look at that.

The Case for Separation

We saw in a previous segment how you can run a single campaign on both the search and content networks simultaneously, but there are several reasons why separating the two may produce better results. The first of those is budgeting. Daily ad spend is managed at the campaign level. So if there's a spike in traffic for content ads because of an industry news event or something similar, it could drain the budget and disable your search ads in a dual purpose campaign. Separation can also lead to better targeting and higher quality scores. Contextual ads are still ranked for position using the ad rank formula; however, the quality score component of that formula is based on slightly different criteria. In particular, the content quality score includes the relevance of your ad and keywords to the site your ad is going to appear on.

It also includes your ad’s past performance on that and similar sites; unlike search ads contextual ads are triggered on the on the basis of an Adgroup's overall theme, not the individual keywords in that group, so it becomes even more important to create extremely targeted Adgroups composed of keywords that all reference a single subject, and then write ads that are clearly written about that exact same thing.

When you do that the concept of the Adgroup becomes crystal clear and makes it much easier for the AdWords system to match your ad to relevant content pages. That result is better targeting, and that will be reflected in better quality scores. All of which means you'd be better off serving different ads to search and content audiences. But the time being at least, you can't do that from the same campaign. It's worth noting here that content network quality scores also include a landing page component but again the application is slightly different.

Firstly landing page quality is part of the formula used to rank contextual ads; that is not the case for search ads. Secondly, while there is no minimum bid system for content network keywords, landing page quality still plays a role in regulating which ads are displayed. If Google thinks that an advertiser is not providing what they describe as a high quality user experience on the landing page then they may stop showing that ad on the content network. Again, I’ll be talking more about landing pages in a later segment.

Separating search from content can also help with performance analysis. As you'd expect, the click through rate reported at the campaign summary level for a dual purpose content and search campaign is a composite result for ads shown on both networks.

And the same applies to the stats reported at the Adgroup summary level; that makes them meaningless when trying to analyse what's happening with the click through rate on the main search site for quality score purposes. You can find separate reporting for the content network at the detail level of each Adgroup, but only to the extent of summary totals for all contextual ads lumped together. The reason why only totals are reported goes back to the fact that contextual ads are triggered on the basis of the Adgroup theme, and not by individual keywords in that group. So while you can drill down to the detail that you need for search network analysis, the need to aggregate data from all sources at the summary level can make life difficult for newcomers who don't separate the two networks in their campaign structure, particularly when you have lots of Adgroups. If you do decide to run separate content targeted campaigns you'll need to make a manual adjustment to the settings of any search campaigns you create.

New keyword targeted campaigns are set to display your ads on both the search and content networks by default. So you'll need to turn content distribution off after the campaign has been set up. Again, we saw where to make that change via edit campaign settings in the segment on navigating the control panel.

Okay, to recap. There are a number of issues related to contextual ads that you’ll need to keep in mind. But I don’t want to leave you with the impression content targeting should be dismissed as an option. Far from it, contextual advertising does work, often in circumstances where search doesn't. And the fact is some advertisers report great results with it. In the next segment I’ll be talking about how and why you should target your ads geographically. Let’s take a look at that.

Geographical Targeting Options

Welcome back. In this segment we’ll be exploring the geographical targeting options offered by Google. Companies that want to advertise internationally can use AdWords to target users in over one hundred countries using any of fifty-six different languages. Advertisers can also target markets on a regional basis, so that ads only appear when users in selected parts of a country search for products and services. This ability to target specific regions, cities and even custom-defined areas within a country means that merchants can advertise and be sure their ads will only be shown to users in the areas specified and not to users halfway across the country.

Any time you set up a new AdWords campaign you're offered a choice of three geo-targeting options.

With the countries option your ads will be displayed to users located anywhere in the country or countries you select. This option is obviously for businesses who operate worldwide and merchants whose market is a specific country or countries. If you choose the regions and cities option your ads will only be displayed to users located in the regions and cities you specify. At present this level of targeting is available in twenty-six countries including North America, the UK, Australia and New Zealand.

With the customized option your ads will only be displayed to users located in an area that you specify using a control panel tool that we’ll look at shortly. This option is for businesses serving local markets that don't fit the pre-packaged city or region coverage in the previous option or in countries where that option is not currently available. You specify regional targeting preferences on a campaign by campaign basis via the campaign setup Wizard.

As we’ve already seen that’s part of step one set of the setup procedure for new accounts. For existing accounts you’ll use the same wizard when you create a new campaign or edit the settings of an existing campaign. If you choose, customised targeting the wizard will present you with a map already flagged with your approximate location regardless of where that maybe world wide.

Advertisers in North America and the UK can specify a target radius around a particular location by entering a physical street address. Other users can zoom in on their location using navigation buttons on the map to achieve the same result. If you need to, you can also specify a target area that has an irregular shape.

Earlier I quoted research that found that 70% of American households now use the internet as an information source when shopping locally for products and services. Other surveys now also confirm what many have long suspected: consumers may like to research products online, but they often prefer to complete any related purchases off-line at a local store.

A 2005 survey by the Darringer Group estimated that eighty-three million people a year do that in the US alone. These and other similar research findings have made local search one of the hottest topics in online advertising and like their rivals Microsoft and Yahoo, Google has responded to this trend by building a purpose dedicated local search site, which is integrated with AdWords geo-targeting. If Google detects that a search made anywhere on the Google network has local intent the results return will not only include geo-targeted ads, but also a link to the special site featured in the number one position for the natural results.

To see how this works let’s do a search on Google for a dentist in Seattle. At the very top and on the right of the results page we have ads labelled as sponsored links, and on the left we have the natural results in the usual format.

What’s different in these links at the head of the page that redirect users to the special local site. Obviously, a lot of people will follow those links, and when they do they find results that feature the name and address of local businesses and a map with markers indicating the location of those businesses.

For queries that have qualifying advertisers, up to three ads appear below the natural results; lower ranked ads appear on subsequent pages. Note that any ads that appear in here will also appear on the main search site. In some cases, Google will also display a single ad above the natural search results. That only occurs when the ad qualifies as a premium listing. I’ll explain more about premium listings in a later segment.

Over time it's likely that more and more users will navigate directly to the local site via the address Google/local or Google/maps. By entering a local search there directly users can bypass the Google homepage altogether. Country specific local sites are now also online for Canada, UK and several European countries. And cell phone users in the US and the UK can access can access a special mobile version of the site. In addition to the maps and driving directions available in the desk top version the mobile version includes telephone numbers that users can click to call business listed on the site. No ads are served in the mobile version yet but they're not far away.

Google is also busy making deals to syndicate the use of the local search facility on partner sites. An example of this is local weather forecast provider AccuWeather, where you can find a Google local search box integrated into the homepage. They used a similar strategy to build their regular search traffic to the huge size it is now. Okay. Let’s take a quick break and we’ll continue our tour of local targeting options in the next segment.

Geo-Targeting: the Fine Print

In the last segment we saw how to set up geo targeting and how the Google Maps site improves the experience for local search users. Although geo targeting looks good on paper, a couple of factors make it less than ideal in practice especially for merchants that have a physical presence in the area being targeted. First up, it's important to understand that regionally targeted ads still compete with national ads for placement on Google maps and search network based on ad rank.

That in itself is not so bad, since local advertisers can make their ad copy relevant to locals in ways that national advertisers can't. The easiest way for the local guy to do this is to make specific reference to location in his ad and on the landing page, particularly in the headlines. The national guy can't do that because his ad appears the same nationwide. Local advertisers also get a leg up by virtue of an extra line of text under the URL in their ad that identifies them as a local. You can see that in the results we got when we searched for a dentist in Seattle. However, these advantages can be well and truly negated by a couple of caveats associated with regional geo-targeting.

To establish whether a user should be show that regionally targeted ads Google examines each query it receives in two respects. First, they examine the query for local intent. Does it include a location for example? If there is no location, but the query contains other clues that the user is looking for a local result they are shown ads targeted to the location indicated by the address assigned to the user's Internet connection. That address is known as the Internet Protocol or IP address.

However, problems occur with some Internet service providers who hide these addresses or provide an address which is not accurate for this purpose. For example, one well-known ISP that operates nationwide in the United States generates IP addresses that place all their customers in the state of Virginia. As a result, Google blocks these users from seeing regionally targeted ads. They are only served national ads. And this problem is not just confined to the US; it affects advertisers worldwide.

Another problem concerns situations where the product or service is delivered locally, but people often search for it from outside the country. The classic example in this respect is a tourism or travel related business. A user located in Europe who searches for Miami hotels won't be shown ads which target the keyword hotels in regional campaigns that geo-target Miami.

Using a location qualifier doesn't work across international borders for regional campaigns because there are some place names which occur in more than one country; for example, you have Melbourne, Australia and Melbourne, Florida, Paris, Texas and Paris, France, and so on. There is a work around for both these issues, but it's messy. That work around is to create a nationally targeted campaign that uses location specific keywords and run it in parallel with the regional campaign. Location specific keywords are simply keywords that include location qualifier such as the name of the city, county, state, etc.

To address these issues Google has introduced another way for locally based merchants to target their local market, one that offers some benefits of real substance. We’ll be looking at that alternative in the next segment. But before we do that, a final note concerning national advertisers. If your business operates nationwide in one or more countries then all of this has implications for you as well. Because of regional competition the position of nationally targeted ads will vary across the country depending on local click rates. If the click through rate of a nationally targeted keyword is strong in New York, the ad might occupy position two in that market but if it’s weak in Phoenix it may show up at number ten in that area. So, depending on your business it may mean running local campaigns in multiple markets across the country to compete effectively. There’s already evidence of that happening in some industries.

Local business ads for Google maps

Google’s response to the issues we discussed in the last segment has been to create a special class of geo-targeted advertising called local business ads. You’ll recall that the ads we saw previously on the map site were from national advertisers using geographic modifiers with their keywords and those who employed regional geo-targeting. By contrast, local business ads feature an enhanced listing in the left-hand column and a marker on the map. As well as the details normally found in the text ad the search results include the address of the business and a customisable icon. When you click the listing an information window appears on the map which can also include a phone number and logo. The advertiser is only charged if the user clicks that window and is forwarded to their website.

Local business ads also have priority over normal text ads on the map site. Text ads are only shown if there are no local business ads eligible for display. But that's not the only advantages attached to local business ads. They also offer improved targeting.

Users in any location worldwide who submit relevant queries will see local business ads on Google maps. The user's IP address is not considered and the restriction on queries from other countries that affects geo-targeted ads is removed as well. That means a user in London who searches for Miami hotels is shown any Miami ads that are eligible for display: end of story. And because each local business ad is tied to a single business address, you can also promote multiple locations with a single Adgroup and just one keyword list. So, say for example you have two hotels: one in Boston, and one in Dallas. Your Adgroup only needs to include generic hotel keywords and users searching for Boston hotels will be shown your Boston ad, while users who search for a Dallas hotel will be shown the Dallas ad.

Keep in mind, however, that these special characteristics only apply to the map site. On Google and the remainder of the search network these ads run as regular text ads, and they can't be distributed on the content network. The text only version is ranked and priced in the same way as any other ad running on Google. For the time being, local business ads are only available to advertisers in North America and the UK but again it won't be long before this rolls out in other markets.

To be eligible your business details must be registered in the database that feeds the free listings on Google maps. You may find that those details are already there so check by doing a search your company on the maps site. If not, you can register via Google's local business centre. In the United Kingdom, go to the same address except with your country domain extension dot co dot uk. It's free to add any business to this database; the only drawback is that it takes about six weeks to process an application.

To save double handling I'd recommend using a feed distribution service like registerlocal.com. For a modest fee register local will maintain a master profile of your business details and automatically distribute that data to multiple search engines and business directories including Google.

Aside from being found in the natural search results on Google maps and being able to advertise with local business ads, the other benefit of registering is that you can create special offer coupons that Google will host for free. To get things started Google has seeded the site with coupons from around 12,000 merchants through a partnership with a company that provides the technology driving the whole deal. And advertisers will soon be able to post ads that drive pay per click search traffic directly to these coupons. Once your business can be found in the free listings on Google maps, creating a local business ad is pretty straightforward, but first time around, you’ll probably want to create a new campaign for this purpose.

Make sure that campaign is set to target the area where your business is located. You can't create a local business ad for a store in London if the campaign only targets Manchester for example. You also need to make sure the campaign is set up for distribution on the search network and, providing your campaign targets one of the countries where this feature is supported, you'll see a link to create a new local business ad when you navigate to an Adgroup in that campaign. When you follow that link AdWords will ask you for details that it can use to find your business in the Google maps database. Once you've identified your entry, you will be able to create your new ad and upload any images you want to use to customise the listing icon and logo.

Keyword match Options

Prior to making up a list of keyword phrases that you want to advertise on it pays to get to grips with the three methods Google offers for matching your keywords to user search queries. The three options are: broad match, phrase match and exact match.

Broad match is the default option, and acts like a wild card, meaning that your ad will display for all searches that contain your keyword or keyword phrase in any order and with any other words. Adding a keyword in broad match mode is easy. Just enter your keyword without any punctuation. For example, let's say we enter 'mountain bike parts'. Your ad will show when users search on those keywords in any order, and even if the query includes other words such as 'parts for my mountain bike'. But note that your ad won't be shown, unless all the words in your keyword phrase appear somewhere in the user's search. To help prevent unintended and undesirable broad match results you can use a pre-emptive filtering tool called negative keywords.

The negative keywords tool allows you to specify keywords that will result in your ad not being shown. To enter a negative match, include a minus sign before the word or phrase. The best way to use this tool is with a specific list of words that you know you want to filter out. For example, our mountain bike dealer might want to use 'mountain bike parts' as a broad match phrase. However, if he doesn't deal in used parts, he can add the word '-used' to his negative keyword filter so his ad won't appear when a user searches for 'used mountain bike parts'.

Another example might be where you don't want to attract those shopping around for the lowest price or something for free. In that case, you'd use '-free' and '-discount' as negative keywords.

If you decide to filter certain keywords across an entire campaign, rather than just one Adgroup, Google makes it easy to do via a link on the campaign level of your control panel. Broad matching and the negative keyword filter can produce great results in some scenarios; in combination with geo-targeting would be one example.

But new advertisers should be wary of broad matching for several reasons. First, I've already mentioned the problem of unintended matches. With so many other details to keep track of, it's hard for advertisers to anticipate all the irrelevant broad match queries that might eventuate. And when it's used without any other targeting broad matching will often be penalised with a poor quality score and a high minimum bid.

The main reason for that is because it is nearly impossible to write an ad that is a good match for all the phrase variations that can occur. The other problem is with reporting. If I ran the keyword 'mountain bike' on broad match, Google would serve my ad for searches on phrases like mountain bike sales, mountain bike store and mountain bike guide. But any clicks would only be reported against the root term ‘mountain bike’. I wouldn't know which of those longer phrases produced the click. More experienced advertisers get around this by coding all their destination URLs with tracking information. But that's not something that most newcomers want to leap straight into. You can gain more control over the audience you target by using phrase matches.

To phrase match put double quotation marks around the phrase when you add it as a keyword. With this option, your ad only appears if the user searches for your keywords in the order you’ve specified, but other terms can still precede or follow the phrase so "mountain bike parts" in quotes will show your ad for searches on 'Kona mountain bike parts' , but not against searches on 'parts for Kona mountain bike.' Phrase matching can be very effective, but to narrow your targeting even further, consider changing your phrase match in to an exact match.

To specify exact matching include square brackets around your [keywords]. When you do that your ads will only appear when users search for the exact phrase [mountain bike parts] in that order and without any other terms in the query. That means your ad won’t show for the query 'Kona mountain bike parts', for example. You won't receive as many ad impressions with exact matching, but the click through rate will be better for targeted phrases.

Okay that covers the matching options you can choose but you also need to be aware of a matching feature that runs automatically in the background. Google calls this feature 'expanded broad match'. With expanded matching the AdWords system automatically runs your ads on relevant keywords, including synonyms, related phrases and plurals even if you haven't specified them in your keyword list.

For example, if your keyword is 'used mountain bikes’, Google may also run your ad for searches on 'pre-owned mountain bikes' and 'second-hand mountain bikes'. Expanded matching only applies to your broad match keywords. It doesn't affect keywords you specified as phrase matches or exact matches. Currently the only way to opt out of expanded matching is to specify all your keywords as either phrase matches or exact matches. But again if there are particular expanded match keywords that you don't want your ads run against, use the negative keyword filter.

Okay, that’s keyword matching. After the break we’ll be talking about keyword research and selection.

Targeting the Tail

In this segment we're going to start on the process of developing that all-important keyword list. One of the biggest mistakes many new advertisers make is that they simply don't bid on enough relevant keywords. To understand what makes a keyword relevant, we need to view the sales process through the eyes of a potential customer. As any salesman will tell you, buyers typically move through stages of a predictable cycle when they make a purchase. That buying cycle starts with their initial enquiry and ends with the eventual purchase. In marketing language those stages are described as the research and engagement stage, the consideration and comparison stage, and finally the purchase stage.

In the context of online search that cycle manifests itself as the keywords people use. Those at the beginning of the cycle tend to use one of the small number of general keywords and phrases which are typically only one to three words in length. Search marketers often refer to these as generic terms.

For example, someone who decides to start looking for a mountain bike to buy may well start out using that as their search term. Having got the broad picture, she then refines her search by searching on 'woman's mountain bike' or perhaps 'woman's mountain bike review'. As she moves through the buying cycle towards her purchase her queries become more specific. For example after looking around a little more, she might decide on a brand, and then perhaps a specific model. Some people will even get specific to the point of using SKU Product Codes. What’s less predictable, however, is the sheer diversity of phrases that people will enter as they progress through the cycle. In fact, Google estimates that nearly 50% of all searches are one-of-a-kind. That means a hundred million unique searches per day on Google alone.

At the heart of this phenomenon is the concept called the long tail. In this context the long tail describes how in many cases the grand total of all searches made using keywords that are only searched once or twice during any given period will outnumber the total searches made using the ten or twenty most popular keywords. In other words, it turns the old 80-20 rule on its head. Shown as a graph it typically looks something like this. The most popular keywords are represented by the red portion and the long tail is in yellow. That graph’s not drawn to scale but again the idea is that the sum of all the queries in yellow will usually equal or exceed those in red.

The long tail presents search marketers with a dilemma. On the one hand keywords that target the end of the sales cycle often cost less and convert better. However, they cost less for a reason. They take time and effort to find and aggregate in sufficient numbers to make the volume worthwhile. After all not every unique search query in the long tail is a specific ready-to-buy-now customer. In fact, according to well regarded search marketing researcher, Gordon Hotchkiss, if you always aim for the easy conversion you’re probably missing 70% of your market. Of course, that’s no real surprise when you think about it. It’s just common sense really. On the other hand generic keywords used at the beginning of the buying cycle are generally more expensive because they are easily discovered, and individually offer much more volume but they don’t convert so well.

The strategy you decide on should be reflected in the campaign objectives I talked about earlier. And to an extent those objectives will reflect where your business sits in the supply chain. A manufacturer who distributes nationally via resellers should be interested in reaching consumers in the early stage of their buying cycle whereas a retailer will usually prefer to connect with consumers when they are ready to buy. Finding the right mix of keywords for your niche will be key for optimizing the return of your campaign investment.

Okay, so that’s the theory. Now how do you put it into practice? How do you physically go about developing a great keyword list? That’s up next.

Keyword List Development

In the last segment we talked about how the buying cycle impacts your keyword list development strategy. In this segment we dive into the hand-on aspect of developing your list. You know - if you were to specifically go looking for advice on this part of the job you’d probably find there are as many opinions out there as there are people ready to comment. But generally speaking the process usually involves a combination of manual brainstorming and the use of automated keyword generation tools. Let's look at the manual aspect first.

In the segment on campaign structure we talked about developing a draft plan on the basis of the products and services your company offers. In using that as a roadmap to guide the initial development of your keyword list, you'll recall that the example I used was our fictitious mountain bike retailer. We also discussed how Adgroups could be broken down further for better targeting, with a caveat about not over complicating campaign management. It will pay to keep their caveat in mind when you start thinking about targeting multiple stages of the buying cycle and your keyword match mode strategy.

When you settle on a draft plan, transfer it to a spreadsheet using a separate worksheet for each Adgroup. Then start your list for each group by asking the question, ‘What are Google users thinking when they carry out a search for this product?’ ‘What topic is related to this product?’ ‘What is motivating their search?’ ‘What's their mission?’ 'What are they trying to accomplish?’ ‘What problems do the products, information or services available on your site help to solve?’

People use search terms that describes the problem they want to solve it far more than the search using the name of a solution. Users will often enter their search query as a question. So think about what questions they are likely to ask. And think about the demographics of who uses your site? Target market characteristics like age and gender will often be used as keyword qualifiers. Answers to questions like those will give you insights into how users structure their search queries, and get you started. I like to use a check list published by the guys at marketingexperiments.com to help this process: related words and variations, misspellings, jargon and abbreviations, punctuation errors; use all these cues to prime the pump and you'll be away.

Be aware, however, that the language used by customers to describe your products and services will often be very different from the terminology you are accustomed to using as an industry insider, especially in retail consumer markets. Experienced search marketing consultants will tell you that their clients are often amazed to learn what keywords end user customers really use to find them. Feedback from sources such as customers, suppliers and of course your own sales people can be really useful in this respect. Likewise, the online community that exists around your business niche will offer lots of clues. So read blogs and discussion forums, in particular, to find out what people in your niche are talking about and what language they are using.

You've probably already thought about analysing your competitor's websites for keywords but to get the really good oil take a look at competitive analysis tools like the market scan service from www.semphonic.com. Tools like these can help identify the keywords being used by competitors, what ad copy they’re using, even their landing page addresses. The market scan service requires a subscription payment, but you can check it out first with a free 30 day trial. What about competitor names and trademarks? Can you bid on those? Maybe. It depends on the circumstances. This is an issue that is being constantly tested in courts around the world so there's no definitive answer on that one. What I would say is that you probably want to make sure that you're in a top position for your own brand name, purely as a defensive move.

Okay, let’s take a short break and when we come back we’ll look at some of the automated keyword generation tools available.

Automated keyword tools

When you've had a crack at brainstorming a list manually it's time to let the automated tools do the heavy lifting and the first one you want to check out is Google's own tool, which you can access via this link on the keyword tab of any Adgroup in your control panel. If you seed it with at least one keyword the default setup will return related broad match phrases that have all been searched previously on the Google network. The default view includes graphical indicators of the search volume and level of competition for each phrase. But you can also have it display cost and position estimates. Of course, these come from the same sources as the estimates we've seen previously so again, so again I wouldn't get too excited about them. Historical monthly search volumes are also available. In theory these should be somewhat more accurate so they could be useful to confirm any seasonal patterns. Another potentially useful feature is the site spider. Enter the address of any website, and Google will scan that site and return with any keywords suggestion based on the site content. Add any results that you want to keep to the holding bid on the right and then either download that list is for further analysis or add them correctly to an Adgroup of your choice.

The next tool that many people turn to is the one offered by Google competitor Yahoo. Aside from returning variations of the keyword you enter this popular tool also reports the number of times each keyword was searched on the Yahoo network in the previous month, something you can't get from Google. There are also numerous keyword tools now offered by third-party vendors, including the widely used Word Tracker. Powered by a database of approximately three hundred and fifty million keywords using data from the top ten search engines, Word Tracker is used extensively by search marketing professionals. Again, access is sold on a subscription basis but you can subscribe for as little as one day for just a few dollars. They also offer a free keyword research guide, which is well worth the time to read.

The next tool I'd like to show you is one we make available to members on our site at keywordmarketer.com. It's called Phrase Mate. Advertisers that use exact and phrase matching to target their keywords face a problem that is not always apparent at first. To recap an exact match must contain the specified word or words without any other terms in the query, while a phrase match can contain extra words at either end of the specified phrase. The kicker is that in both cases the search user must enter his words in the same order you specified for your keyword. Now obviously that's going to cause a problem when users decide to scramble the order of those words.

For example, a proportion of users will enter the phrase 'mountain bike parts' at as 'parts mountain bike' , 'bike parts mountain' and even 'mountain parts bike.' In fact, there's a good chance they would even type them upside down if they could!

Again, the problem is that non-of those alternative phrases will be matched your keyword 'mountain bike parts' under either exact match or phrase matching. That's where the Phrase Mate comes in. When you seed it with multiple word lists phrase mate will find all the permutations that combine those words into different phrases. It's easy to use. Just mouse over the help icons for instructions. When you're done, specify those alternative phrases separately in your campaign as keywords in their own right.

Smaller advertisers might decide this is not worth worrying about for most of the list, but larger advertisers tend to be more diligent about the potential traffic loss when there are thousands of phrases involved. Phrase Mate can also come in handy for regional advertisers who want to overcome the problems I described in the segment on geo-targeting. If you recall, the workaround was to run parallel national campaigns by adding location qualifiers to the keywords used in their regional campaigns. Phrase Mate will make light work of appending those qualifiers to an existing keyword list.

Unfortunately we don't have time to cover all the other tools available, but there is one other source that I do need to mention: that's your own server log files. If you haven't started a pay per click campaign yet, these logs will contain terms that people are already using to find you via natural search engine results. These records can be great for tuning into the kind of language that people are using and for identifying terms that you may need to add to your negative keyword list. To get the most out of your logs, think about running a bunch of general terms on AdWords, in broad match mode for a fortnight or so specifically to see what the longer the variations of these keywords show up. After the test is over add any useful terms to your keyword list as exact or phrase matches.

Okay, to summarise, I find that keyword list development is a five step process. Using my initial Adgroup themes as the starting point I layout a spreadsheet framework and brainstorm my first list manually using the checklist I showed you as a prompt. Then I use the automated software tools to expand my list, relying on Word Tracker, in particular. Next I use Excel to sort and organise the results by Adgroup. Make a point of refining the list as you go by weeding out irrelevant phrases. Remember, every keyword will be assigned a quality score that affects ad ranking in the minimum in the minimum bid. So don't waste time on keywords of marginal relevance. And finally repeat the process over time to discover new keywords. Experienced pros will tell you that it may be months before you find your best performing search terms. So get your list into play, and then schedule time to develop the list further on a regular basis.

Continues on DVD 2

To find out more about the ‘How To Guide To Successful Advertising On Google’ please click on the link below or copy it and paste it into your browser http://www.... GoogleAdWords.htm

If you spot any errors in this transcript or would like further information then please send and email to me at rjane07@gmail.com