Writing ads:
If you don’t know what to write for an ad, do a Google search for your keyword. Look at the ads that come up.  These are the ads which most likely have the highest CTR (click through rate) which is critical for adwords success.  It may be frowned upon by some, but you can usually “borrow” the ad text from some of these successful ads.  If there are trademarks you may have to avoid them.  Use combinations and variations of the ideas you see on these top results.  Make multiple ads for every ad group and make sure you have selected “Optimize: Show better-performing ads more often” for ad serving under “campaign settings”.

Bidding:
Now is the tough part. If you are in a competitive niche, and want your adgroup to be successful, you will probably have to run it at a loss for a little while.  A time-honored strategy is to overpay for a little while and get your ads running in a good position, then to slowly lower your bid.  Often your ad will be able to maintain it’s  postition at the lower price.

Split testing:
During this process, your multiple ads should be selectively served by Google automatically.  They will start serving your best ad more than all the rest.  Once your best ad(s) have risen to the top, you may opt to pause most of the under-performing ads. (We’re looking at CTR here)  Take your best ad and make some small change to it.  For instance change your url from word caps to lowercase like this www.DangerBrown.com www.dangerbrown.com or the other way around.  If you have narrowed it down to one ad, and want to speed up your split testing, you may choose to change “Optimize: Show better-performing ads more often” for ad serving under “campaign settings” to “Rotate: Show ads more evenly”.  This will display your split tested ads 50/50.  When it has become obvious which is the better performing ad, pause the weaker one, and make another small change to the best ad.  It is adviseable to always be split testing your ad.  Always be improving it.

Keywords:
Especially in a new adgroup, watch your keyword quality.  Google rates keywords on a scale of 1 to 10 for quality. Your keywords quality scores and CTRs are averaged into your adgroup, campaign, and account quality scores.  If you have any poor quality keywords they should be paused or deleted.  Keyword CTR should be 1% or greater or it may start to count against you.  Sort by impressions and if you have a keyword getting 1000′s of impressions with a CTR that is really low (below .5%) pause or delete it.  Usually, these are poorly targetted words less likely to convert into sales anyway.  If you have a great quality keyword with a high CTR or conversion rate, plug that keyword into the keyword tool to find more similar keywords to expand on that success.

Conversion tracking:
Utilize conversion tracking if appropriate to your marketing purpose. It may be possible that your best CTR keywords and ads are not the best converting.  Use the same methods above to optimize for conversions instead of CTR.  Usually a balance between the two is wise as lower CTR results in a lower price paid per click and hence a higher profitablity.