Thanks to an exceedingly generous offer from Google, I wound up with a very modest advertising budget in Google AdWords. Since the blogs don’t make money (I don’t show ads or charge fees), I decided to treat it as an experiment as opposed to any focused, strategic ad blitz.

First, a primer: two common terms in advertising are CPM and CPC. CPM is the cost per thousand impressions (showings of your ad), and CPC is the Cost per Click. In general, CPM is low (arbitrarily, a penny), and CPC is high (arbitrarily, $1.50). Google AdWords has some really nifty tools to focus your advertising, and to give granular reporting. You buy ads for specific keywords. On the blogs, I bought keywords for certain blog posts that were already getting high traffic, like my post on T60 disassembly, and Kyle’s Lenovo X200 review. I also ran a small campaign for a family friends’ site, which I targeted solely to New Hampshire. (A very neat functionality!)

I set a max CPC of $2, and tended to stay slightly under it. It seems to me that setting a higher CPC will help your ads be shown higher (which will help get more clicks!), but I really didn’t want to pay Google $5 for every person that came and read Kyle’s X200 review, since it earned us $0.00.

I did find some interesting things, though:

• Placement is important. If you ad is shown above the others, it seems to get many more clicks. This costs more money. This is the same thing with SEO: we’re on the first page of Google results for some juicy keywords, yet we get very few clicks since we’re down at the bottom. I suspect traffic would grow an order of magnitude or more if we were #2, and possibly two orders of magnitude if we were #1. (Except we’d be competing against CNet for that spot…)
• Generic keywords aren’t necessarily better. I put “lenovo x200 review” as a keyword, but also left “lenovo x200” in. That was a mistake, but it turned out to be a very good mistake to make. It was responsible for more than 90% of impressions, which I thought of as a bad thing — I’m paying money to show an ad that’s probably irrelevant. But it’s not. Some of the very targeted keywords got a handful of impressions but no clicks. “lenovo x200” was shown thousands of times and got a handful of clicks. There’s an argument to be made about percents, but I’d counter that it’s a moot point since 0 clicks out of 17 impressions, versus 1 out of 10,000, still tilts the scale in favor of 1 in 10,000.
• Click-through rates are very low. The exact figures vary greatly, and probably vary even more depending on what you’re advertising, but as a rough estimation, you might have to show an ad 1,000 times before anyone clicks on it.
• Ads on Google are most effective. Google gives me three choices: ads on Google, ads on “partner search” sites, and ads on general content sites that display AdWords results. The ads shown directly on Google got considerably more clicks every single time, even though ads on content sites got considerably more impressions.
• Advertising is expensive. I pay a couple dollars every time someone clicks a link. Since I’m running a low-volume campaign, and since I’m just burning through a credit that would have gone to waste, I don’t mind. But I wouldn’t pony up my own money, since I don’t get any benefit from it. Even if I ran an online store, only a fraction of people who clicked my ads would actually “convert” (buy something), so you’d need to be making decent money from each conversion before advertising makes sense.
• Advertising is cheap. (I love giving contradictory items on bulleted lists.) For about $20, I’ve shown ads to several thousand people and gotten a dozen or more clicks. Some have been to a family friend’s business site, which could actually result in new income for her.
• Playing with keywords is important. My gut feeling for what keywords would be effective was often wrong. Google has a keywords tool that helps, but even that isn’t too accurate. It shows the most popular search terms, so it will help get your impressions up. But it’s silent on click-through rate. Sometimes they were very different.