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Google AdWords (those sponsored links that appear alongside search results and web content) can be one of the most cost-effective ways to advertise on the web. Your ads are highly targeted based on keywords, and you don’t pay for anything unless they are clicked.

But often, small businesses set up a campaign and load it with relevant phrases, only to see little traction. Or worse, they get clicks (which cost money) but aren’t converting them into sales.

If you’re struggling to hit pay dirt with Google ads, or you’re interested in signing up but not sure where to start, take some cues from these small business success stories.

Where to Begin:

Before you get started, “know that AdWords is a real commitment, and is likely to be a time drain,” says Chris Conn, founder of MightyNest.com, purveyors of organic and naturally made home wares and accessories. His company uses AdWords to drive potential customers to the online store. “It will take from other activities, so make sure that fits with your priorities.”

In that regard, start small, says Timothy Thomas, a small business consultant who cultivates successful AdWords campaigns for his clients.

“Focus on one campaign, lock your budget and use the tools provided by AdWords to learn how Google does its magic,” Thomas adds. He recommends that companies continue their standard SEO efforts in order to rank high in organic search for free (more on this in a bit), and then optimize an AdWords campaign accordingly. “Don’t buy ads in areas where you are getting a top-five link already. Think about terms that are unique to your offering and try to make the most of those keywords by standing alone in paid search.”

If you’re trying to get the maximum value out of a small AdWords budget, don’t worry about appearing at the top of every search. “Keep your bids as low as you can and edge them up — you do not need to be the number one paid search term, however being in the top three is valuable,” says Thomas. “Being number one in the wrong search will only cost you money.”

When you settle into an AdWords campaign that works for your budget and time, think about using the platform to glean a bit more insight into what your potential customers want.

Conn uses AdWords as a real-time testing and intelligence tool. “If we want to know what messaging works, we launch a quick AdWords campaign to see how customers respond.” Making fine adjustments based on small messaging changes can really hone your ads and give you the most bang for your pay-per-click buck.

AdWords and SEO Go Hand-in-Hand

A theme that held true for all the small businesses we spoke with was the importance of traditional SEO as it relates to AdWords campaigns.

“We find that paid search lifts other traffic channels,” says Conn. “When we increase our paid search, our direct traffic and organic traffic also rise.”

And the tides flow in both directions. Jordan Schaffel, co-founder of Say It Visually, a company that produces animated instructional and demo videos, explained that their existing SEO efforts were crucial to the success of their AdWords campaign.

“When we re-did our site recently, we had AdWords in mind, so we did our homework prior to re-launching,” Schaffel says. “Without the foundational efforts, we would’ve struck out, or at the very least, been behind the eight ball on getting clicks through our AdWords campaigns.”

Schaffels’ strategy included titling and tagging all of their videos to tie in closely with the AdWords campaigns. “If you fail to do one or more of the pieces of the SEO puzzle, you’re hurting yourself exponentially.”

One of those puzzle pieces is knowing when not to pay for search terms that you already own for free. “If Google can match your ad to a search, they are happy to sell a click whether it’s a good one or not. The only valid strategy is to narrow Google’s ability to present your ad,” explains Thomas. Make sure your AdWords keywords are embedded in the HTML of your website, and if you’re already dominating a search term organically, don’t buy it from Google. “You only want to pay for eyeballs that you can’t get in front of organically.”

Optimization

Even if you have a good AdWords campaign that’s producing quality leads, there’s always room for improvement. In some cases, it can be a complicated matter. Thomas says he worked with an engineering company that specializes in LED lighting and testing. Its customers are technically trained engineers, but its ads were being surfaced by consumers looking for Christmas lights, Xbox controllers and LED TVs. In short, the company was spending money on lots of useless impressions and clicks.

“The solution was eliminating ‘broad matching’ criteria,” says Thomas. “We put our keywords into either Phrase Match or Exact Match. Each day we would look at what the company had paid for on the previous day and just started [adding] negative keywords. Words like ‘Christmas,’ ‘automobile,’ ‘rope light,’ ‘Playstation,’ and all the variants for ‘television’ were identified and blocked from matching.”

Thomas adds that “the daily review and elimination of inappropriate search matches is the secret sauce of mastering AdWords. You have to tune AdWords for about 15 minutes every day or it can eat you alive, financially.”

Closing the Deal

Like any good lead-generation tool, it’s how you turn an interested click into a repeat customer that really counts.

“It is important that you build a relationship with the customers you find through AdWords and that a meaningful amount of those relationships are sustainable in the long run,” says Conn. “If not, AdWords can turn into a treadmill.”

In the case of Thomas’ engineering client, most of the potential customers know what they’re looking for by the time they reach the company’s website. Once they’ve clicked through, “we encourage them to approach us by phone so we can really help them find the service or product they need.”

Schaffel’s company takes it a step further by monitoring real-time analytics. “We use Woopra to track people coming to our site from AdWords (and other links), and we see patterns emerge when people are truly interested in creating explanation videos.” Paying attention to traffic patterns like this can help you fine-tune your campaigns and figure out what customers are expecting when they arrive. A sale may hinge on the context of the ad that sent them there, or the appeal of the site itself.

Do you have your own tips for new AdWords users? Share them in the comments.

Marketers plan to increase spending on e-mail and social media marketing more than any other tactics in 2011, according to a recent survey.

As marketers find opportunities to build audiences, conversation and conversions with clever cross-promotion between the two mediums, e-mail and social media tactics are becoming increasingly popular and intertwined.

Incentives Drive Clicks and Conversions

Dingo, a pet food company in Ohio, used Constant Contact to create a promotion that rewarded customers with a $20 coupon if they signed up for the company’s newsletter and “Liked” its Facebook Page, with the catch being that the page needed to get to 5,000 fans (from a base of around 300) for the promotion to kick in. Mike Halloran, the owner of Dingo, says it reached its goal within three days, as pet owners found out about in the Dingo newsletter and forwarded it to their friends and “liked” Dingo on Facebook.

Mark Schmulen, general manager for social media at Constant Contact, says that Dingo’s campaign illustrates a growing trend among customers. “Of all channels, e-mail marketing and social media go hand in hand better than any other,” he said. “Getting your customers to share your message with friends is the most effective way to grow your business.”

Gary Levitt of upstart e-mail marketing provider Mad Mimi sees a similar trend. He cites one of his customers, bag and accessory retailer Timbuk2, as a great example of how to integrate e-mail and social. The company’s strategy is “to use a Facebook application to handle [contests] rather than setting up and optimizing a landing page of its own.”

The company’s e-mail newsletter — which has more than 100,000 subscribers – recently featured a promotion to win a free bike, helmet and messenger bag to fans of the company’s Facebook Page. So far, the opportunity has driven more than 6,500 clickthroughs to the giveaway, versus just nine clicks (yes, nine) to the company’s prompt that encourages e-mail subscribers to become Facebook fans.

Promotion Works Both Ways

These promotions can also work the other way, however. Shoe retailer Crocs not only promotes social media through its e-mail newsletter, but also promotes its e-mail newsletter through social media. For example, the company will inform its Twitter followers or Facebook fans about a special offer that’s only available to newsletter subscribers. The company also lets Facebook fans sign up for its e-mail newsletter from an app that’s built into its page, something that Andrea Stow, senior global eMarketing manager for Crocs, says has resulted in a “gigantic leap in our e-mail subscribers.”

Stow continues, “Our strategy is understanding and knowing that there might be duplicates [subscribers to multiple mediums] — but the more customer touch points, the better conversion we’ll have.” Jeff Rohrs, vice president of marketing at ExactTarget, the company that powers Crocs’ e-mail marketing, adds, “What I really like that Crocs is doing is they realize they don’t have to abandon the channel — it’s not an either/or scenario. You work them all together and you end up with more subscribers, fans and followers overall.”

That reach, says Stow, gives Crocs the ability to stay in touch with customers year round — important for a company that only expects its average customer to buy new shoes two or three times per year at most.

E-mail Will Only Get More Social

Although companies like Crocs, Timbuk2 and Dingo are still relatively early movers in the integration of e-mail and social media — Schmulen believes only 10% of Constant Contact customers are using social media to its full potential — the pace of evolution in the space is only going to accelerate.

Both Constant Contact and ExactTarget made big bets on social last year with their acquisitions of NutshellMail and CoTweet, respectively, and both now speak of a next wave of innovation built on more precise targeting based on social data. To that end, Constant Contact acquired BantamLive in February, a deal that Schmulen says will let his customers “see who’s talking about [them] and who the actual influencers are.” Similarly, Plaskoff of ExactTarget says his company is working on tools that leverage user profile data through Facebook’s open graph API.

Concludes Schmulen, who was also a co-founder of NushellMail, “What we’re seeing today [is the] social call to action [becoming] the primary call to action inside of newsletters.” Expect that trend to continue as marketers start to realize the benefits of doing so and technology providers continue to integrate e-mail and social tools into one package.

Selecting keywords is a sophisticated search process. Not only do you want to to select appropriate keywords to draw traffic, the goal is to find keywords that will bring the right kind of traffic to the website.

The key is to evaluate words on the basis of relevance, traffic, competition and commercial appeal.

Optimizing for “number one on Google” is all the rage. What most SEO’s won’t tell you is that 90% of all keywords have insignificant traffic.

That’s a bold statement, but it’s true.

When you are in the midst of creating an optimization plan for your website it’s important to understand the difference between being number one on Google and being in the number two slot in the search.

It’s a big difference.

The latest stats I’ve seen indicate that the difference between number one on Google and number is that #1 gets 42% of the clicks, #2 gets only 12%. The stats go down from there. Number three is roughly 8%, number 4 is 6%, #5 is 5%, 6 is 4% and 7 is 3%.

Obviously it pays to be number one on Google.

But the question begs to be asked… Number one on Google for What?

The keywords you select may be easy to optimize for, with little competition. But even if you win the battle to be number one, no one is searching for those keywords, so what really have you won?

A true analysis of keywords takes into account the competitive landscape for that word – what is the number and level of competitors, as well as the strength of those competitors.

Pick your battles wisely.

Consider also the commercial value of the keyword or keyword phrase. How profitable optimizing for that word winds up to be is dependent upon it’s commercial value.

One way to determine the ‘commercial’ value of a keyword or keyword phrase is to evaluate it using Google’s adwords tool.

Selecting relevant keywords that offer traffic, low competition and which also have commercial appeal is part of crafting an effective website. Remember not only will you need a main theme keyword, you will also require category keywords to bolster your website’s inbound marketing magnetism throughout the phases of the sales funnel.

Remember that is anyone promises to get you to “number one” in Google, you should be suspicious. If the keyword or keyword phrase is worth optimizing for, it’s not going to be something that will happen overnight. Anyone offering “black hat” techniques, should be avoided. If you aren’t sure what that may mean, read about the recent experiences with JC Penney and Overstock. Recuperating after being blacklisted or penalized is a difficult road, so always try to err on the side of using Google Best Practices for organic optimization.

One of the great things about being a Hubspot Certified Partner is that HuDo Hubspot For mebspot does offer great tools to evaluate how the website is performing. Many of our clients are on the Hubspot platform, which helps them to work on their site, and also to monitor the site’s performance.

How do you select keywords for your website? Do you have a method or software tool that seems to work for you? What word density do you aim for, and do you include semantic search terms?