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Google adwords concept is easy. You create ads that Google shows alongside a keyword search. You give Google keywords that you want to be associated with your product. For example, you sell Disney T-shirts, you might want your ad to show up when people do a search for Disney. We've all seen these ads that appear to the right of a google search, called sponsored links. These are paid advertisements.

When you create an adwords ad you chose keywords for which your ad will appear and specify the maximum amount you're willing to pay for each click. You only pay when someone clicks on your ad and visits your website.

Now that you know adwords is and excellent way to bring in revenue you need to determine how much you are willing to pay per click (PPC). You can figure this using the following simple formula: Divide your monthly visitors by your monthly sales, then convert that into a percentage by multiplying by 100. Say in a month you get 2000 visitors and sell 500 products each with a gross profit of $50.00. Your conversion ratio would be 2.5%. This means that 2.5% of every 100 people buy your product. Calculate your gross profit for every 100 visitors, 50 X 2.5%=$125.00. In this example you could afford to pay up to $1.25 for a visitor. This is a high amount and you would never have to pay that much.

Your keyword selection is the most important element when using adwords. These are the words when searched for will trigger the appearance of your ad in the search results. Choose these words while thinking what you would search for if you wanted a certain product. Use different spelling variations and plurals of your keywords to get the best results.

When creating your ad use good key words that are attention grabbing, such as free, new, tips and sale. Also explain the advantages of your product. Always have your exact keywords in the title. Use phrases like click here or visit this site to get your buyer to go to your website.

Keep a close eye on your budget, or you will get into trouble. When you have chosen your keywords and maximum cost per click, Google will suggest an amount for your daily budget. Adwords automatically tracks clicks, impressions and click through rates when your ad is up and running.

Adwords can be a fantastic source for new customers at a very low price. Research adwords and you will have a never ending flow of traffic to your website.

To learn more about making money with Google go to the Authors bio.