Here’s a couple of techniques to bump your CTR (clickthrough rate) and conversions:

• Behavioral-based bid management

Research shows that consumers are surfing shopping sites and doing price comparisons during work hours. Bump your ad positions during office hours to get better ad positioning (and consequently, higher conversions).

• Match your consumers stage in the buying cycle

Your keywords determine your websites’ visitor profile. For buyers early in the buying cycle, they’d be looking for information, product reviews, so create an appropriate content site.

Buyers in the later stage, primed to buy, will be looking for coupon codes, bonuses, and other goodies, so a coupon site or inventive site will convert better for that demographic.

• Highly targeted landing pages

Spend more time focusing on targeted and highly relevant keywords. Instead of “holiday events”, shoot for adgroups containing “holiday ice skating show” or “holiday ice capades” pointing at a page containing specific event information and you’ll see your profits spike.

• Specific buy phrases

Especially during the holiday season, consumers might be typing buying phrases like “gifts for dad”, “electronics under $25” or “xbox360 christmas promotion”. Include these in your campaign and get ready for the ka-ching to come in…

For more tips, visit: Industry Newsletters for Holiday Season

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My Answer:
There’s a lot of FUD (Fear Uncertainty and Doubt) being spread, especially by marketers who aren’t using paid traffic, typically certain members of the Web 2.0 fraternity.

Yes, you can lose lots of money, and not generate a single sale, but only if you don’t have a plan in mind. I was in that category before, bidding on low competition keywords, having subscribed to the “long tail keyword” strategy.

The fact is that with quality score playing a dominant role in Google AdWords, you will need to bid reasonable prices to get the conversions.

I have a stock portfolio which generates 10-20% on an annualized basis. If you’ve refined your PPC campaigns and are able to generate at least 50% on a monthly basis, you’ve outperformed most of the mutual funds and equity funds in the market.

So let’s look at some PPC newbie pitfalls:

• Not enough keywords in your adwords campaign

If you’ve only 20-200 keyphrases in your campaign, it might only generate a handful of clickthroughs and even fewer sales per day.

Reasonably you should have at least 1,000 keywords in your campaign to see good results.

• Poor choice of keywords

It’s not just enough to choose cheap or low competition keywords, you need to have an idea of the type of keywords your intended clicker will be typing, regardless of whether you expect them to complete a CPA offer or buy an affiliate product.

Bad match? A key indicator is if you’re getting good clickthroughs and poor conversions. While it’s easy to blame it on a poor landing page, the more fundamental issue is your keyword list.

• Insufficient ad budget

While it’s ambitious to want to generate great results from your PPC campaign, it’s going to be difficult to do that with a $5-10 daily budget. A budget should be the result of working backwards from your outcome/result.

You also need to understand your market. If you’re planning to do an ultra competitive area like webhosting, you might do better with a $100-200 daily budget given the high commission payouts and even greater competition in that niche.

• The “Fire and forget” mentality

Successful PPC marketers will tell you that keyword research, setting up the campaign and launching it is only 10% of the battle. The rest lies in being able to effectively optimize your campaign.

Optimize in this case, goes way beyond merely making changes to your bid prices.

The optimization process is a reflection of your optimization strategy – you need to know whether you need to increase your traffic, improve the quality of your traffic, or adopt a different strategy.

Google already provides a powerful suite of tools and analytics package. If you fail to use them, you do so at your own peril.

As you evolve your PPC strategies, you’ll see that PPC is systematic in nature and there’s “more than meets the eye”.