You've probably heard the age-old saying, "I know half of the money I spend on advertising is wasted, if only I could figure out which half!" Did you know that now there actually is a way to find out which half is wasted so you can eliminate that spending?

I'm referring to pay per click (PPC) online advertising-primarily on Google's search engine via Google's AdWords program. However, there are many other pay per click options, such as Yahoo! Search Marketing (formerly Overture), MSN's AdCenter, MIVA, Enhance and Facebook. The major player, as in almost everything else online, is Google. The ads are displayed on the search engine results page, usually on the top (the first three listings, followed by the organic or non-paid results) and on the right side. They usually have a header that indicates that they are "sponsored listings."

Although this article will focus on AdWords, most of the information will be appropriate for other PPC options as well. With AdWords and their pay per click option, you pay only when someone actually responds to your ad by clicking on it-and if you set your account up right by adding a little bit of code to your website, you can actually track whether that prospect makes a purchase or some other desired outcome, such as subscribing to your newsletter, etc.

Once you set up your account (you can do so at adwords.google.com, which is free but does require a credit card to bill once your ads start running), you create a campaign based upon your "keywords." A keyword is a word that someone might use when searching for your product or service or a company such as yours. Coming up with keywords is an art in itself, but Google provides its AdWords customers a free tool that helps you come up with keywords right inside your account. It also includes a feature where you type in your company's web address and the Google's spider (computer robot) will go to your site and come up with words it thinks are appropriate for your site (just click the appropriate tab once in the tool).

There are three general types of keywords (or keyword phrases-several words used together) that you can bid on in AdWords: broad match, phrase match and exact match. Broad match (the default setting) is the basic word or words-they may not be typed in the order you arrange them to trigger your ad. Phrase match is when the searcher types in the words you've selected in the same order you arrange them, but they may have other words attached to the beginning or end, too. Exact match means that the searcher has typed the exact keyword you've bid on in the exact order with nothing else before or after or as a plural form of your word.

Now you may be thinking, "That's great, but I only sell my products and services in the Peoria area"-that's fine. Google (as do most of the other PPC networks) allow you to target geographically. You simply set your campaign to target locally and select the market from their dropdown list.

Once you enter in your keywords, the next step is to create the actual ad or ads. Google allows you to evenly rotate several ads at the same time in order to test which one is most effective. I would recommend having at least two, ideally three, different ads. Despite your best guess, the prospect is always going to have the final word and determine which ad is most effective.

The next thing you'll do is set a bid price-you can do this by keyword (have a different bid for each one) or for the entire ad group or campaign. This can be tricky-I suggest you type different prices into the system to see what your estimated traffic will be, plus your average cost per click (CPC). By changing that price, you dramatically alter the projected traffic and CPC, so test out a few different prices to see what you are comfortable with. One word of caution: SET A DAILY BUDGET-if you don't, it's possible to spend well beyond what you intend if you're not closely monitoring your campaign. Google allows you to set a daily maximum amount that you have authorized to spend to prevent this from happening, but many new advertisers aren't aware of it and spend their entire monthly budget in only a few days' time, so beware!

Once your campaign has run for a set period of time (usually a pre-determined number of clicks), you can simply go in and eliminate the ads or keywords that aren't being clicked on or didn't result in your desired response. Google supplies lots of great video and text tutorials and the more you study those, the more effective your campaigns will be.

Running a PPC campaign can be a little tricky-particularly when you're targeting popular keywords that have lots of competition. I recently heard AdWords described as the "E-bay of Advertising"-and thought that was a great analogy. It's a very powerful advertising tool and allows you to target only people who have essentially raised their hand and asked for information about your product or service. In advertising terms, that means you will have very little "wasted circulation," where your ads appear to people who have no interest in your company, yet you still pay for them seeing or hearing your ad. iBi

Amy Blain owns ExplorePeoria.com, a Peoria area information portal that offers free classified ads, a local events calendar, a free weekly e-newsletter of upcoming events & entertainment, free job listings, real estate listings, restaurant menus, a complete business directory plus much more.