Most Small Business owners and managers recognize the need for utilizing SEM ( Search Engine Marketing ) as part of their Online Marketing efforts. However many fail to take the time to learn the basics of Google Adwords advertising, and end up not seeing the results they expected.

This is a quick overview of some basic terminology as well as a few great tips to maximizing your Google Adwords marketing.

What does CPC mean?

CPC or “Cost Per Click” is the amount you’re willing to pay for a click on your advertisment. The highest amount that you’re willing to pay is referred to as your maximum cost-per-click or Max CPC. The Max CPC on Google’s search network is one of the elements that determine your ads positioning, or how high it appears in search results. Sometimes you can increase your ads position just by increasing the Max CPC that you’re willing to pay. It works a little differently with the Display network. Here Max CPC determines if your ad will appear on the target placements you selected.

What factors determine how “expensive” a keyword is?

The Google Adwords interface is very user-friendly and is fairly simple for a new comer to navigate. I have seen many business owners lose a lot of money with little to no results, because they have not properly understood or set up their bidding options.

Google Adwords operates on an auction system. This means that you will need to pay more than the “highest bidder” for any given keyword if you want your ad to appear above them. Other factors determine your ad ranking such as Quality Score, however we’ll focus on bidding for this discussion.

When choosing options such as Max CPC, you have to understand that the amount you’re willing to pay may be too little to get your ad the positioning you need to get clicks, and ultimately new customers. For example, you may only be willing to spend $.25 cents for a click, however to rank your ad high in the search results, a bid of $1.50 may be necessary. If the Max CPC you want to spend is only $. 25 your ad will likely never appear. There are tools within the Google Adwords system you can use such as the Keyword tool that allow you to see how competitive or “expensive” a keyword may be.

Your industry also determines how much you may pay per click for your Small Business SEM efforts. For example, clients who are Marketing Court Reporting Firms or Law Firms may be paying $5, $10, or $20 per click. Whereas a clothing store may be paying $. 50 or $1.00 to have their ad rank on the top of the search results. It is basic Supply and Demand principles in play. The more competitors that are bidding on the same keywords, the higher the price will be. A great tip to keep in mind if you find that your desired keywords require a CPC that you’re not willing to pay, is to focus on long tail keywords and search terms.

There are also Google Adwords Certified individuals and agencies that can help you get started and review the basics.

Take your time when beginning with your SEM efforts. With a basic understanding of Google Adwords, and the patience to optimize your efforts, you’ll be on your way to seeing more Search Engine marketing revenue!