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In their book, The Ultimate Guide to Google AdWords, 3rd Edition, authors Perry Marshall and Bryan Todd lay out the fundamentals of Google's pay-per-click advertising system and detail how businesses can build campaigns to increase search engine visibility, capture clicks and increase sales. In this edited excerpt, Marshall and Todd discuss how to determine which keywords can attract the highest number of potential customers.
What keywords will you use to reach your market? Answering that question the right way can spell the difference between your Google ad campaign's success and failure. Ultimately you're out to hunt down the top one or two keywords that will bring you the most paying customers, and tweak your entire sales process around that. That's what the most successful advertisers we know are doing now.

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Ultimate Guide to Google AdWords, 3rd Edition

By Perry Marshall and Bryan Todd

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AdWords displays related sponsored listings along with unpaid listings that result from a Google search. One of its huge advantages is that it links you with people who are already sold on the concept that you are promoting. You don't have to talk them into anything -- they're already on Google looking for what you've got. You just need to figure out the keywords they use to describe what you offer so that you can connect with them. To answer this question, you need to describe what you're promoting as clearly as possible -- and identify who wants to buy it, in other words, your ideal customer. Here are four tips that can help you get started building your own Google ad campaign.
1. Define your perfect customer. We recommend that you stop right now, pull out a piece of paper and write down a one-sentence description of your ultimate money-in-hand-and-ready-to-buy paying customer.
Those are the people who already know something about the type of product (or information) you sell or the service you offer. These people probably don't know about you, but they do know about your product. Often they have an immediate problem and have decided to go online looking for a solution. They may have already made up their mind about how they want to solve the problem. Now they're searching Google, trying to locate the product that fits their solution and then buy it.
Your description may look like one of these:

• My best prospect is someone who already believes in non-pharmaceutical and natural remedies for migraines and is searching for the best one to buy.
• My best prospect is someone who has already made up his or her mind to buy pottery via the web.
• My best prospect already knows that pay-per-click management services exist and is proactively searching to hire one.

Keep your customer description in front of you as you go through the keyword search process.
2. Identify the keywords that potential customers are using to search for your products and services. Head to Google's keyword tool and enter some phrases that you think reflect customers who are in that mind-set.
Let's take the migraine example. A starter idea would be "natural migraine remedies," because that would seem to specify people who are looking for a "natural solution," something for "migraines" as opposed to more general issues, and "remedies" as opposed to facts or data or information.
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Based on that search, Google gives a decent-sized list of keywords. We can now go through the list keyword by keyword and compare each to our written customer description, choose the keywords we feel are a fit and ignore the ones that aren't. You may end up with no more than one to two dozen keywords. That's perfectly fine.
3. Determine the number of people searching on those keywords. For your one to two dozen keywords, you can go with what Google's keyword tool has already told you. Or you can take each one and do a further keyword tool search on it and add in totals from other variations that you believe would fully match your written customer description. Consider search volume when choosing your top keyword or keywords.
4. Determine how much money advertisers are making off a keyword. You can judge this by how much the keyword costs. You're looking for the keywords where the money is. The market has its own way of answering this. The maximum cost per click that people pay represents the upper limit of the money available in that market.
Head over to Google's traffic estimator to find this out. You can collect as many relevant keywords as you want, and then make an educated comparison to find the best fit for your customer profile. You're off to a great start when you've got 6 to 12 tightly matched groups of keywords. Ultimately, you're best off with a one, single bull's-eye keyword.
The most important thing to know about a Google campaign is that it's not a single technique or something that you set up once and forget about. The real power in Google AdWords comes from logging in every few days and making constant refinements that increase your traffic, two, five or even 10 times. The number of visitors grows even while your cost-per-click declines over time.
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Read more stories about: Online marketing, Google AdWords, Search engine marketing