Most people who start out in the internet marketing business begin on a shoestring budget and fear pay-per-click advertising programs like Google AdWords. They are afraid that they will spend too much money on advertising with little or no return on their investment. This is a legitimate fear and we have all felt it but some of the best traffic that you will ever get will come from an AdWords campaign. All you have to do is understand the program and how to make it work for you.

The first thing that you need to understand is how the Google AdWords ranking system works.

There are a number of factors taken into consideration when Google determines the ranking for an advertisement.

1.) Maximum Bid Price

This is the thing that scares many people when it comes to running an AdWords campaign. In most pay-per-click programs this bid is the deciding factor when determining the placement of your ad. In those programs the highest bid gets the highest spot. Not so with Google AdWords. There are other factors taken into consideration in determining placement.

2.) Relevancy

Weight is given to relevancy by AdWords. If one ad is more relevant to the search input it may appear in a higher position.

3.) Click Through Rate (CTR)

Google AdWords records the CTR for your keywords, groups, and phrases from the day you begin using the system. The historical CTR of your campaign can affect both ad placement and cost. A high CTR can result in higher ad placement and at a lower cost.

This is the biggest challenge for new users. When you first begin using AdWords you will have a historical CTR of ZERO. This presents a problem but there are ways to improve your CTR score such as using keyword macros and other techniques.

4.) Quality Score

This is very important for all internet marketers. There are a number of factors taken into account when determining your quality score. These are click through rate, relevance of ad text, historical keyword performance, and the landing page.

Yes, your landing page can have an impact on your quality score. Google says ?Your landing page must be true to what your ad copy promises.? If you ad copy promises a free report then your landing page must have an open download link. In the eyes of Google free means just that ?free, not in exchange for a name and email address. Avoid using the word ?free? in your ad copy if you are sending visitors to a squeeze page that requires that they submit their name and email address.

Google AdWords is not the mythical fire-breathing beast that it appears to be once you understand how it works. Understanding the AdWords ranking system is the just the first step in turning the dragon into a house pet.