The Secrets to Adwords Revealed!

Most of you reading this article are probably already quite familiar with Google Adwords and its revenue potential. For those of you who do not, allow me to explain briefly. You know when you search for something on Google and you get a results page with ads on the top of the page (usually highlighted in yellow) and down the right hand side of the page. Well those ads are called 'Sponsored Links' and they can be placed by anyone using a powerful tool known as Google Adwords. Google Adwords happens to be a really powerful tool to advertise anything from your website to merchandise.

How it works is that after signing up for Adwords, you enter the details for your ads (such as the description, url link etc...) and then begin the process of choosing your keywords (words that will prompt your ad to be displayed on the results page if your bid on the keyword is high enough when searched for on Google), placing bids on your keywords (the maximum amount that you are willing to pay if someone clicks on your ad) and finally setting your daily spending limit for that particular ad.

If you are an affiliate marketer, which I assume most of you are, then Google Adwords is probably one of the main tools that you use to advertise.

For all of you long time Adwords users, you probably know how bidding on some keywords can be quite an expensive affair. Since you only pay when someone clicks on your ad, I expect that most of you are tempted to drive up that maximum bid amount for your keywords. However, sometimes you can not afford to do that because you would be reducing your profit margin or worse yet, incurring losses.

Here is one very useful tip that I use quite often when using Adwords to make sure that I am not spending too much:

I use the Adwords Traffic Estimator Tool without placing a bid amount. The Traffic Estimator Tool then returns a price which is close to what the person with the highest bid for that keyword is paying. Now, I do not particularly like to be placed in positions 1-3 on the Sponsored Links list because I find that those positions are often bidding a price which is too high for the keyword. This therefore means that the profit margins for positions 1-3 is smaller than you can make it by bidding about 15% less than the price that the Traffic Estimator Tool shows. This almost ensures that your ad will be shown in positions 4-6 on the Sponsored Link list. By doing this, your profit margins will be higher than those ads in positions 1-3.