Catalog Success Magazine (Editor’s Note: It is now called All About ROI Magazine) in their January 2007 issue has a very interesting article on how to maximize your paid search marketing this year. Pay per click has become an important source of traffic and sales for online marketers; hence it is esential to get the best ROI from this advertising medium. Here are their tips:

1. Invest in Google – being the largest search engine, you’ll be rewarded with the largest return for your time
2. Grow your term list – test 3 to 10 times as many distinct keywords as there are pages on your site
3. Make your landing pages relevant – send search visitors to the most relevant selling page on your site
4. Split out branded from non branded terms – advertising on your brand makes sense because the cost is low and sales are high; but traffic is not incremental. Grow non-brand keywords aggressively
5. Use strong bid management technology – invest in a bid management tool that operates on the keyword level and allows you to specific different metrics
6. Track paid search into your call center – if you have a 1-800 number that people call on to buy from you, check if the customer found out about you through your paid search ad
7. Bid by margin – compute margins based on actual products ordered, not on terms advertised as certain ads will generate significant orders
8. Use contextual advertising with caution – potential customers from contextual advertising such as Adsense are viewers, not searchers and are less qualified prospects
9. Scrutinize your affiliate programs – don’t allow affiliates to advertise on your brand name, and don’t provide affiliates with better offers than on your site
10. Manage your agency – if you are using an agency to manage your paid search, establish clear return on investment metrics. As the agency has no role in your brand reputation, take into consideration how you will compensate them given that a large portion of your sales will be driven by your brand name
11. Audit your search programs every six months – look at the costs, sales, and other metrics
12. Obsess about conversion – the ultimate winners in paid search are those with the highest conversion rate