First of all you have to understand that any kind of marketing can be effective if it is targeting the right audience. Running a radio ad for cowboy boots to teenage rappers is an example of poorly targeted advertising. So is listing your website about cars in a directory listing for music downloads. You have to get your target right.

This is still a big problem for people who do online marketing because they are intimidated by the internet in general. Unless you have a very large budget you can quickly deplete your advertising funds and be out of business with no sales by not knowing or reaching your target market.

Pay per click advertising is an example of being able to target your market and only pay for quality traffic. This is probably one of the greatest things the internet has given business owners. The ability to not waste money on advertising allows you to do more of it.

But even ppc advertising is not without it's problems.

You have to know how much you are paying per click, how many clicks does it take to get a sale, and how many sales does it take to cover the cost of your advertising. Knowing your break even point is the key in knowing how much to bid per click.

Google Adwords is one of the most popular forms of online marketing and much has been written about how to do it correctly. Because Google gets about half of all search engine traffic everyday you want your business on it.

A good pay per click campaign with Google Adwords can really pay off for you in terms of targeting your market and increasing your sales. If you sell a high ticket item you may not need as many sales to find your break even point. With a lower priced item you may have to make up for that in volume before breaking even. This is why targeting your visitors and pay per click work so well together.

Let's see if someone in offline business is going to become an expert in tracking what is working and what is not. Offline businesses can ask their customers on the phone, how did you hear from us. They can keep a simple stroke sheet that let's them know that newspaper ads are where they get the most calls, but radio ads are where they get the most sales. Armed with that kind of information they could ramp up on more radio ads and improve their profitability.

Same thing with internet advertising. You can use different urls to track the same ad. Then run it in various places like traffic exchanges or ezine advertising. Check your website stats to see which url is pulling in the most traffic. Knowing this will allow you to do more of that type of advertising. It will also tell you where to promote more. If one eNewsletter gets you more sales than another then that may be a newsletter to advertise on a weekly basis versus once a month.

Hopefully you get the idea. You have to know your target market and then you have to promote to it. Tracking how you spend your online marketing dollars and what is working is the key to increasing your business and profitability.