Google AdWords is a pay per click advertising program on Google. The advertisements are displayed on the search engine results and content sites of the Google network such as AOL, EarthLink, HowStuffWorks, & Blogger. Advertisements appear on the right side of the search page depending on the keyword/keywords phrases entered in the search bar. So when you create your AdWords ad, you need to select the keywords for which your ad will appear and also bid for the amount you are willing to pay for each click. The benefit is this that you target the audience that is specifically looking for the products and services you offer.

How does Google AdWords work?

There is no monthly charge for placing a Google AdWords ad but you do have to pay a nominal activation fee. The rest then works on pay per click basis, that is, you pay a pre-determined amount to Google each time a visitor clicks on your advertisement on Google's content network.

Ten tips to maximize your returns from your Google AdWords advertisement

Online marketing is fast emerging as one the most viable options of selling products and services. Recent statistics reveal that eight in ten (81 percent), retailers in the UK now offer online shopping services, up from 71 per cent in 2007. Given the number of websites news pages, and blogs in the Google AdWords band wagon, you need to follow the right strategy to reach users all over the web to help you drive conversions.

1. Get your keywords/key phrases right

Google has set rule for the number of words you can use in your advertisement. In fact there is a set number and format for each line of the ad. Therefore, given the limit, you have to be really careful about the keywords and key phrases you put in. If you don't get your keywords right, you may lose because if the people click on your site and don't actually find what they are looking for, you will have to pay for a click that did not turn into conversion.

2. Test multiple creatives and formats

You can choose from text, image, and video formats to communicate your message. Do test runs for different creatives and ad formats before deciding which works best for you. You can monitor for each ad and modify it for better performance and then reach at the one that is perfect in terms of copy and conversions.

3. Create a negative keyword list

List all the negative keywords to ensure that your advertisement does not appear on pages related to these keywords. The more focused the campaign the more your chances to reach your target group. But you really need to be very judicious while choosing negative keywords because in a bid to narrow in to your target audience you might cut off potential customers.

4. Create your ad in more than one size

Each publisher in Google's content network decides on the size of the advertisement he accepts on his website. To ensure that your advertisement gets maximum displays on various sites, create your ad in various sizes and try to include at least one text ad per ad group.

5. Give the link to the exact destination page on your website

Your ad has to include the link of destination page on which the visitors will reach once they click on your advertisement. Instead of giving the link to your home page, give the one that takes the visitors to the page which has details of the product or service they are looking for. Visitors are unlikely to browse through the site for what they are looking for.

6. Pay the right amount for per clicks

Keep your budget in mind and do a cost analysis before deciding on the bidding amount for per click on your advertisement. A desire to place your advertisement on the first three positions on the search results page may prove costly and you even end up on a price war with other advertisers. So even if you win the price battle, you may find that the returns are not worth the costs you have put in. The golden rule is to strike a right balance keeping other costs and conversion factors in mind: don't pay too much and don't pay too less either. If your advertisement is not in the first page of the search results, you will not have much to gain from your Google AdWords advertisement. Most people don't go beyond the first page of the search result.

7. Place your advertisement

You can have your advertisement featured on specific sites in the content network to concentrate on the target audience. You can select your advertisement placement by specific categories such as Travel or Finance. You can also select URLs of specific websites with similar but non-competing websites available on the Google Network for greater conversions.

8. Optimize your advertisement for language and geography

Your advertisement can work well if it is optimized to the place where you have your target audience. For example, you can choose your advertisement to be placed on Andover area of the UK if this is where your customers are. Similarly you can optimize for language also. To reap maximum benefits from this pay per click advertising strategy, try all permutations and combinations that can help you target your audience.

9. Monitoring your advertisement performance

You can use the Placement Performance Report provided by Google to monitor the effectiveness of your advertisement. Using this report, you can monitor various performance metrics such as clicks, impressions, cost, and conversions on a site-by-site basis.

10. Redefine your advertisement at frequent intervals

Keep in mind that your AdWords advertisement campaign functions in a very dynamic and constantly in the flux environment. So even if your advertisement campaign has been successful, be prepared to change it for content, keywords, destination pages if required. In fact, running Google AdWords campaign requires time, effort and analysis.