Factors Which Create Profitable Campaigns
Anyone can setup a simple PPC campaign, write an ad, and bid on a few keywords.  However, it takes knowledge, skill and time to maximize the potential of this new advertising medium. Below is a list of factors which are involved in creating profitable PPC campaigns:

Search Engine and Network
The first decision is which search engine and network option to use.  Google Adwords and Yahoo Search Marketing are the two major PPC programs.  Google is much larger than Yahoo, accounting for more than 60% of PPC spending.  Given 

Google’s scope, it’s usually a good plan to start with an Adwords campaign.  However, Google and Yahoo represent different markets and campaign results vary in unpredictable ways, so it’s worthwhile to experiment with both search engines. 

Ad Group Organization
Poor Ad Group organization is the most common problem reducing the effectiveness of PPC campaigns.  If you have an extensive list of keywords, it is usually best to break them into categories and place them in separate Ad Groups.  You want the strongest possible relationship between the keyword which is entered and your ad copy.  In general, the goal is to have the keyword which is entered appear in the ad title.  When this happens Google will bold this keyword giving your ad greater impact.

Keyword Research, Analysis, and Management
There are many tools which can be used to find the search terms or keywords which have been used in searching for specific products.  These tools also indicate the number of searches for each keyword.  The objective is to select the keywords which will attract the most qualified prospects.  

More specific keywords usually indicate searchers who are in a buying mode.  The most heavily searched keywords tend to be the most costly to bid on.  It’s often more cost effective to identify a larger number of related keywords which are less competitive and lower cost.  Including all three Google matching options (Broad Match, Phrase Match and Exact Match) will generally reduce your per click costs and/or improve your position.  The careful selection of negative keywords is also important to improve your conversion rate.

Strategic Ad Copywriting and Split Testing
Google Adwords only provides four lines and 140 characters to present benefits and features which will entice searchers to click on your ad.  This includes your display URL which should also be used to communicate your message. The brevity of Adwords ads puts a premium on impactful copywriting.  In addition to your ad position, your ad copy is the most important factor in determining your click through rate and your quality score.  Even small factors can make a big difference.  Smart advertisers are constantly split testing their ads in an ongoing effort to improve their results.

Quality Score
The first pay per click search engines based page position totally on the amount bid for a keyword.  Google realized that this was not the best business model because bid price is only one factor in determining Google’s revenue.  The other factor is the number of clicks as expressed by the Click Through Rate (CTR), so Google developed a more sophisticated algorism which rates ads based on quality and relevance.  Ads with higher quality scores will rank above advertisers with higher bids.

This system is a win/win for Google because it increases their revenue while enhancing the user experience.  The importance of the Quality Score puts a premium on professional copywriting and PPC management.

Bid Management and Position Strategy
In general, it’s better not to pay for top position on the page.  The top position will generate the most traffic, but this traffic is less qualified so you pay for a lot of clicks which don’t covert into sales.  People tend to “kick the tires” by clicking the top listing, but will check other listings as well.  It is important to be “above the fold” which means above the area of the screen which requires scrolling.  Positions 2-5 generally produce the best results.

Importance of Professional PPC Management
Managing all of these complex factors effectively requires specialized knowledge and experience.  Specialized tools and software are also required to manage PPC campaigns effectively (see Pay Per Click Tools ).

Professional PPC management is often a one time investment.  PPC campaigns which are established with a firm foundation should remain profitable with relatively minor adjustments.