Chances are you've heard about the amazing ROI that can be had with pay-per-click advertising on Google, Yahoo!, and Bing. A return of 300 percent or even higher is not at all unusual with this form of advertising. Still, these are hard times and cash is scarce, so here are seven tips you can use to trim the fat from your search advertising campaigns.

  1. PPC Isn't Right for Everyone
    When pay-per-click works, it works well. But what we don't usually hear about are the stories of people who lost their entire ad spend. As with anything else in business, it's best to be realistic from the outset about your chances of success. B2B companies generally have a tougher time making search advertising work. If you sell AC adapters in bundles of 50 or more, for example, you may want to consider other channels. People just aren't searching for that sort of thing.

    After all, the best way to save money in PPC is to not spend any on it. At the very least, do your research before diving in and be sure to start small.
     
  2. Install (And Use!) Website Analytics
    Pretend for a moment that instead of promoting your business over the web, you were to take a more traditional approach, such as television advertising. You might be prepared to spend upwards of a quarter-million dollars just for production, to be followed by potentially millions of dollars of national media buys.

    With so much at stake, it seems unlikely that you would simply write a check and forget about it. Not by a long shot. I bet you'd be watching the sales figures like a hawk to see if your campaign was bringing customers in. And if it didn't perform, you'd cut your losses quickly (and probably fire your marketing manager).

    For some reason, however, many business owners decide to jump into search advertising without having the same mind-set. They blindly set their bids to a number that "sounds right" and hope for the best. Invariably, these campaigns perform poorly.

    It's an absolute necessity to know how effective each of your keywords and ads are at driving traffic to your site. You should be prepared to cut costs aggressively for non-performing keywords and, conversely, pay more for your best placements.

    To do this, you need an analytics package that will give you some kind of feedback about the effectiveness of your campaigns. Google Analytics (free) and Omniture (commercial) are both good products that can do this for you.
     
  3. Optimize Your Website First
    If you have tracking installed on your website but haven't optimized your website's ability to convert visitors into buyers, you probably won't be able to compete for the best possible placement for your ads. As a result, your ads will appear infrequently, buried deep within the search results pages. And more importantly, you'll only be capturing a small percentage of the sales you would have captured by identifying and eliminating sales bottlenecks.

    Conversely, if you can improve your sales by 50 percent through the practice of conversion optimization (a very modest goal for most websites), you can easily double the return on your ad spend! This gives you the option of either cutting your spend while maintaining the same revenue or, alternatively, increasing your spend to drive more traffic. The choice is yours.
     
  4. Don't Use Budget Caps
    Google AdWords offers its users the ability to set a maximum daily budget. For instance, even if there is $100 of traffic available, you can tell Google to serve your ads in a way that only generates $50 of clicks. On the surface, this appears to be an excellent way to ensure that you don't inadvertently overspend on your campaign.

    Don't use it. If you set a budget cap, you force AdWords to make decisions on your behalf about where your ads will appear. For some reason, they usually end up "optimizing" your campaign so that your ads appear for those placements that nobody else seems to want. The result? You stay within your budget but your campaign performs poorly.

    A much better practice is to set your bids conservatively (except where your analytics software suggests otherwise) and closely monitor your spend.
     
  5. Let Someone Else Have the Top Spot
    Business owners and CMOs tend to be very aggressive about bidding for certain terms, such as their brand names or well-recognized buzzwords. As a result, they bid aggressively to ensure their ads appear near the top of the search results.

    This is a very bad practice. Advertisers appearing at the top of the side search results pay an additional 49 percent cost-per-click, which results in far higher campaign spends for what amounts (in most cases) to a small amount of incremental traffic.

    Let your competitors have this spot. By bidding just a little lower, you'll drive nearly the same amount of traffic as they do, but at a far lower cost.
     
  6. Optimize Your Quality Score, Then Optimize It Again
    On Google AdWords, each ad is assigned a "quality score" from one to 10. Ads with high quality scores appear more frequently and are charged a lower CPC relative to competitors. Conversely, low quality score ads tend to be more expensive and show far less frequently.

    You can improve your quality scores through a combination of keyword matching, ad copy split testing and landing page optimization. These practices, though complicated, are well worth it. Those few advertisers who make them an integral part of their campaigns easily edge out their competitors on the search engines.
     
  7. Turn Your Competitors' Successes Against Them
    In most advertising mediums, it's the original and innovative marketers who break through the noise. However, search advertising combines highly motivated searchers (prospects) with highly targeted ads. This killer combination means that originality rarely pays off. Innovative ads often confuse visitors and result in low quality scores.

    The standard advice given to new search marketers is to split test ad copy repeatedly to improve your click-through rates. While this is reasonable in theory, there are two big drawbacks. The first is that it can take a long time--six months or more--to develop strong ads. The second is that you can never really be sure when your ads are "good enough."

    Google AdWords is designed as a massive evolutionary experiment. Good ads breed. Poor ads die. Why not use that to your advantage? Survey the ads that are appearing most frequently for your keywords and use those to seed your split tests. Instead of starting from the bottom, you'll start near the top and cut your workload massively.

    An easy way to do this is to start with the free AdGooroo keyword site, http://free.adgooroo.com/ . Simply enter a keyword or one of your competitors' domain names in this tool and you'll be able to quickly find effective ad copy and keywords. And did I mention it's free?