You know those little text ads that show up on Google searches, webpages, and some blogs? You know, like the ad to the right?  (It's just a copy of an ad; in a real one you could click the link.)  For a long time, I figured these were expensive and off-limits to everyone except companies with big advertising budgets.  In fact, nothing could be further from the truth.

Welcome to the world of pay-per-click advertising.  Google AdWords isn't the only game in town, but it's definitely the most popular (another is Yahoo Advertising).  You probably know about Google Adsense, the service that lets you run pay-per-click ads on your blog.  Well AdWords is the other side of that — AdWords ads are what show up on blogs using Adsense.

Here's the neat thing about AdSense and similar services.  You only pay when someone clicks on your ad, and you pay whatever amount you're willing to pay. If a pair of eyeballs from someone who searched for your keywords is worth 50 cents to you, bid 50 cents per click.  If you think that's only worth one cent, you can bid one cent.  Even better: you choose exactly who sees your ads.  You specify what search terms you'd like your ad to show up for, the geographic regions where you want your ad to run, the time of day you want it to run, and whether you want it to show up on blogs and websites in addition to Google search results pages.

How might you use AdWords?

I realize that not everyone is at the point in their blogging career where advertising is appropriate.  I can picture some of you saying, "I don't need to PAY for my readers, thank you very much."  And that's why I asked the question in the title of this post: what can AdWords do for you?  It's something to keep in mind as you're brainstorming ways to monetize your site.

Let's do a little math!  It would be nice if we bloggers were paid more than one cent per pageview, so that we could simply bid that amount per click.  Then every time someone clicked our ad, we'd squeeze out a small profit, even if they viewed one page and left!  Unfortunately, most of us are making about a fifth of that.  Now, if you can choose your keywords well and write a nice, targeted ad that attracts only those who are truly interested in your blog's content, then perhaps you could average five views per click and make advertising worthwhile.  And this might be possible, considering that if you find a dedicated reader, they'll bring you far more than five pageviews in their lifetime.

Still, that's pretty unrealistic.  Bidding one cent per click won't place your ad very high on Google's priority list, and very few people will see your ad at that price.  However, there are lots of other ways to make money with your blog, for which pay-per-click advertising might be worthwhile.

For example, I sell No Meat Athlete shirts on my blog, and I use AdWords ads for that.  Say you write an e-book one day; that's a prime candidate for AdWords.  I've tried AdWords for affiliate links too: say you write a product review about a pair of trail running shoes you love and you join the company's affiliate program, or even simply use an Amazon.com affiliate link for the product in your post (and disclose this to readers, of course).  You could write an AdWords ad titled "Trail Running Shoes" pointing to your review and hope to attract people in the market for a new trail shoe.  If you bid 25 cents per click, and find that one in twenty clicks results in a purchase, then you're making money if you earn more than five dollars per sale!  Certainly this brings up some other issues, such as being honest in your review and making it clear that you earn money on sales, but it's something to think about.

My point is there are lots of possibilities with AdWords, even if you don't want to advertise just to attract new readers.  Some people even make a living by writing AdWords ads with their affiliate links directly in the ads!  They don't even need a website for that; they're just matching buyers and sellers and earning commissions.

AdWords basics

I could write pages more about the possibilities of AdWords, and people are interested, I will!  For now, I'll just list the basics and let you explore it yourself.

• You can start an account with as little as five dollars, and set your daily budget however low you'd like.  If you don't want to spend more than, say,  a dollar per day on ads, your ads will shut off when they've reached their daily click limit.
• When you write your ads and choose your keywords, be as specific as possible.  For example, I wouldn't want people who searched simply for "t-shirt" to click my ad, since it costs money each time they click.  "Vegetarian t-shirt," maybe.
• You can run multiple ads at a time, and specify different (or the same) keywords for all of them and compare to see which perform best.
• The url that shows up in the ad doesn't have to be the same as the page that the readers land on when they click.  For example, my ad above takes readers directly to the shirts page.
• Some affilate programs don't allow you to do pay-per-click advertising to sell their product; check the details of the particular affiliate agreement.  Also, there are some restrictions about using trademarked names in your ads, so explore that before you do it.

That's it!  The actual process of creating ads is pretty self-explanatory, but there are tons of things to think about, like how much to bid and what keywords to choose.  I'm still trying to figure out what I need to do to make my advertising as profitable as possible.  I hope at the very least, this post has gotten your creative juices flowing a little bit.

Finally, in case you've been procrastinating on the getting your own hosting and domain name, this just might help push you over the edge.  Bluehost, our affiliate, is offering $50 free AdWords credits and $25 free Yahoo Advertising credits for new signups.  So if you sign up soon, make sure you claim that free ad money, because it expires within a few weeks of your signup if you don't!