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Each month in our "Secrets To Their Success" private members' web site, we interview e-business people who are making fantastic profits with their online businesses. We ask them for the details of how they've come to be so successful -- what exactly their secrets are, what tools they've used, etc. And we find out some interesting things...

A number of these people have recently reported having great success with Google AdWords Select. In fact, in one of the interviews we did last month, our interviewee told us he is generating an average of 13,000 unique visitors per day by having keyword listings on both Google AdWords and Overture.com.

Google AdWords Select is the pay-per-click side of the search engine giant we all know as Google. Just a few months old, Google AdWords Select is an offshoot of its cost-per-impression sister Google AdWords, which has been available for a little longer.

An ad placed with Google AdWords Select shows up in a colored box on the right side of the Google search results page, combining free (editorial) content with paid advertising. It's another form of pay-per-click advertising that, done right, has proven to effectively generate traffic.

The ads are extremely high in visibility, set off from the main text in Google's familiar pages that attract over 20 million unique visitors per month. Your URL can appear on the first page of search results without all the hassles of search engine submission and optimization... and you don't pay unless viewers click!

Sound like the ideal advertising set-up? Well, it's been very profitable for some... But let's have a look at what exactly Google AdWords Select offers, how it differs from competing sites in its industry, and how you can use it to your benefit.

Because Overture has dominated the pay-per-click industry almost unrivaled until now, I'll use it as a point of comparison to examine the merits of Google AdWords Select.

The main difference between the two programs is the way in which their ads are listed -- Google's are highlighted alongside the regular Google search results, and Overture's appear as regular search results. However, there are five other points of difference that are very important to understand...

1. Pricing

The pricing structures for each are very different:

When you sign up for Overture, you must pay a $50 deposit that is applied to your monthly click-throughs and your monthly "spend" (you must spend a minimum of $20 per month in click-throughs; if you don't, the money will be subtracted from your deposit). The minimum bid amount is 5 cents.

In Google AdWords Select, you must pay a $5 non-refundable fee that is not put toward your click-through fees. There is no monthly minimum to pay. The minimum bid is said to be 5 cents, but this is not the case for all keywords -- in fact, bidding on popular keywords tends to be more expensive here.

2. Bidding Your Way to the Top

If you want to bid on the term "baseball bats" in Overture, you could run a query in their View Bids tool to determine that (at the time of writing) the number-one position has a maximum bid of $1.18 per click. You'd have to beat that bid to get the coveted position.

In Google AdWords, there is no "View Bids" or equivalent tool; you don't have any access to the amounts other advertisers are bidding. What you can do is fiddle with the numbers in the "Traffic Estimator Tool" (which you'll find when you go to set up your ad) to find out how much you'll have to pay to get a top position with your keyword.

By testing different amounts in the Traffic Estimator, we found that the minimum bids changed according to the popularity of each keyword. A minimum bid for the keywords "baseball bats" in Google AdWords Select requires (at the time of writing) $0.40 per click and ranks your ad fifth. This is the same as the bid for the number-five position in Overture.

But to attain the number-one position in Google AdWords Select, you'll have to cough up a hefty $2.60 per click, while the ace spot in Overture goes for a maximum bid of $1.18.

3. Keeping Your Bid Costs Low

When Google AdWords Select first came out, it got an edge on its competition by creating the "AdWords Discounter." This tool automatically keeps your bid one penny ahead of the competition, up to your stated maximum amount, thereby accomplishing two very important tasks:

It keeps you from having to monitor your bids and your competition all day every day, and

If your next closest competitor lowers his or her bid, your bid will automatically be lowered to only a penny over the lesser amount. This prevents "bid gaps," which occur when a wide margin exists between one bid and the next lowest bid, causing the higher bidder to spend unnecessary money.
Since then, Overture has taken the hint and has implemented a similar tool, referred to as its "Auto Bidding" tool. Be careful, however, to make sure you sign up for this service in Overture -- it does not happen automatically, and you may be caught paying much more than you need to!

Allow me to illustrate: In our search on "baseball bats," the top bid was, as mentioned, $1.18. The next highest bid, however, was $0.65! That means the unfortunate soul in the fortunate position of being number one could be saving 52 cents per click!

...And if this calculation is taken into consideration, and if we drop the number-one listing's bid amount to $0.66 cents (all it needs to be), it means that the number-one spot in Google AdWords Select costs four times more than in Overture for this particular keyword.

I know that sounds expensive, but Google's approach to advertising could mean an excellent return on investment on your ad (depending on your ad, of course!) -- so although you pay more, you could profit more as well.

The only way to really determine both the value and the volume of your traffic from your Overture ad as compared to your Google AdWords Select ad is by tracking your advertising. Each program will allow you to assign a tracking URL to your ad -- a URL that contains a special identifier so that you can tell which ad is pulling the most response from where and ensure that it is generating enough revenue to be worth the cost of advertising.

Google AdWords Select makes it very easy to create a tracking URL when you initially set up your account. In Overture it's not quite as easy, but they'll tell you what to do at: http://www.overture.com/d/USm/learning/track_howb.jhtml

Your viewers won't see this URL -- they'll click on your web site link and be redirected through your tracking ID. We personally track all of our advertising with our affiliate software -- AssocTRAC. It's the easiest and most effective way we've found to keep an eye on our ads and ensure that they're turning the profit we expect.

4. Listing Position

Your listing position is more than just a matter of catching viewers' attention -- in both Overture and Google AdWords Select, a top-three listing can dramatically increase the exposure of your ad.

Overture's massive reach is enabled not only by its well-known name, but also by its partnerships with:

Yahoo
Ask Jeeves
InfoSpace
MSN
AltaVista
Netscape
But Google AdWords is no shrinking violet either; its partners include:

America Online
Earthlink
Sympatico/Lycos
Your ad is guaranteed listings on all partners' sites only if it appears in the top three listings for your search term. So how do you achieve this position?

In Overture, the process is simple: the more you pay, the better your listing. If you outbid all the other people competing for your keywords, you'll attain a top listing in the pages of search results. Simple as that.

In Google AdWords Select, the listing process is very different, and is unique in the pay-per-click industry. First of all, Google AdWords ads are listed at the top right of Google's search result pages. This means that your ad shows up in a prominent position alongside (but set apart from) Google's editorial (unpaid) listings.

Secondly, and most surprisingly, your ranking is determined both by how much you bid and by how many click-throughs your ad generates. The more you bid, the better your chances of attaining a top ranking are -- but if your ad doesn't perform, it just slides on down the rankings.

Google's argument for this kind of approach is that ads that perform are (obviously) of more interest to viewers, so this kind of system creates the best quality results for users. Google also maintains that performance-based placement keeps competitors from getting locked out of top positions by those with more money to spend.

But the problem with Google's payment-plus-popularity placement system is that it can be very difficult to figure out exactly where your ad will appear. And if you're paying the top price for the top listing but not actually getting the top position on Google's results page, you'll not only be a little disgruntled -- you'll also have to do some work on your ad to try to get the response you're aiming for.

5. Choosing Keywords

Back to keywords -- but let's take a step back from bidding on them and talk about the process of choosing them in the first place...

Both Overture and Google AdWords supply tools to help you determine which keywords would be best for you to use. However, Overture provides a much more extensive and useful range of tools.

Google's "AdWords Keyword Suggestion Tool" does give you a list of synonyms and similar phrases for your keyword. For example, when I punched in "Baseball Bats" I got a list of 20 related terms.

However, when I entered "Baseball Bats" into Overture's "Search Term Suggestion Tool," I got a list of 99 related terms, PLUS how many times each of those terms has been searched in the last month. Flip over to the "View Bids" tool to determine how much is being bid on these terms, and your bidding strategy is underway.

But if you want to get a good pay-per-click listing on Google, there's no reason why you can't use Overture to get a feel for which terms are most searched, and which are available at low cost (you can do this for free and without committing to anything with Overture), then use these terms to create your ad in Google AdWords Select.

Or, better yet, use the more comprehensive tools offered by WordTracker -- the free version will give you search numbers and bidding amounts from AltaVista, while the paid version compiles results from the top 24 search engines, directories, and pay-per-click engines, including Google. This is the best way to find those overlooked keywords and misspellings that your competition hasn't noticed... and that you can capitalize on at a very low cost.

Final Thoughts:

The success experienced by our Secrets To Their Success interviewees who used Google AdWords Select is a good indicator of what you can do with this somewhat elusive form of pay-per-click advertising. Google has a very good reputation and is widely used as a search tool with quality (unpaid) listings, and you just can't miss the "sponsored links" listed down the right column of the page.

It is perhaps this degree of visibility that has made such a difference to those advertisers who have generated a great response with Google AdWords Select.

And now that you know how to use Google AdWords Select to achieve the best results possible, you can start getting in on some of Google's masses of traffic. To maximize the performance of your ad, make sure to...

Choose the keywords you bid on very carefully. Try to choose keywords that are frequently searched by your target market but that are not being bid on by as many of your competitors.

Write an effective ad (see issue 65 of our newsletter for tips on how to make the best use of the space you have).

Monitor your bid position. Whenever possible, make sure you rank in the top 3 listings as this will get your ad the highest exposure.

Track your results and make adjustments and improvements based on what you learn.
Learning the search engine game is a trying and time-consuming lesson, and a start-up e-business may not have the time or the resources to undertake the arduous task of getting a good ranking. But if you can choose your keywords carefully and find the most attractive bid amounts available, you can bid your way to the top of the search results pages without blowing your budget.