This is Part 4 of a 5-part series. Read the rest of the articles here:
- The PPC Guide for Beginners, Part 1: Intro to PPC ROI 
- The PPC Guide for Beginners, Part 2: Setting Your PPC Goals 
- The PPC Guide for Beginners, Part 3: The Landing Page Dilemma 
- The PPC Guide for Beginners, Part 5: Bringing it All Together 
You use them to find what you want, to order what you want, and to get what you want. They can hurt you, infuriate you, or enrich you. And once you let them go, you can never get them back.
The internet is based on words, and Google earns billions of dollars  per year from Ad “Words.”
Ask someone to help you plan a pay-per-click campaign, or for advice on how to get your website ranking higher  in organic search results, and one of the first things you will be asked is, “Which keywords do you want to rank for?”
Words are essential to internet marketing—that is why there is so much focus given to finding and using the right ones.
This is a primer for those who want to cut to the chase. It is for those who want to succeed at PPC advertising and rank higher in the unpaid (organic) search engine results.
I’ll use a case example to talk about keywords  here. Chances are really high that your business is not the same as the case study. That is one reason why I chose this particular business. But you can take the principles—the all-important, crucial fundamentals—and apply them to any endeavor you want.
A Business Is Born
Mike Carlson began working with leather as a hobbyist. He found the work relaxing and enjoyable. One day, Mike made a cover for one of his favorite books. It was handcrafted, hand-dyed genuine leather, and it was beautiful. One of Mike’s friends, a member of Alcoholics Anonymous (AA), saw the book cover and said, “Wow, I would love to have one of those for my AA Big Book!”
So Mike designed one. He even imprinted his friend’s initials and the AA triangle into the cover. Mike’s friend took the book to an AA meeting, where others saw it and wanted to know how to get a leather book cover of their own.
Mike’s hobby was now a business.
He made another cover for himself—this one to help shore up his time-worn old Bible. He took it to Church services with him. Folks wanted to know where he got it. “Why, from Mike’s Leather,” said Mike with a grin.
Now, business was beginning to boom.
Mike figured he could launch a website to let others know about his leather book covers. Maybe he could even quit his day job and work leather fulltime. That idea really got his engine going. But how could he do that?
Getting a WordPress site launched wasn’t too difficult, although the shopping cart took some doing, but how could he get his site to rank on the search engine results page (SERP ) and draw more customers? Having something to sell is a start, but attracting buyers builds a business.
Mike needs to attract customers. Pay-per-click advertising and search engine optimization (SEO) can help him do that—but which words should he use to get the best results from his efforts?
Let’s look at the simple plan Mike is beginning to put into action. It is possible to go much deeper into each of the topics here. It is also possible to get overwhelmed and confused by them. Let’s keep it simple. Once you have the basics going, you can always bump the ante.
How to Find Keywords: A 3-Step Plan
Step 1: What are you trying to accomplish?
We spoke about goals in Part 2 of this series . It is essential to know what you hope to accomplish before you begin a job. Otherwise, you won’t know whether or not you succeeded.
Typical PPC goals include securing leads for the sales team, increasing direct sales, providing information to drive brand awareness, contributing to the SEO effort , reputation management, and so on.
The more specific and clearly defined you make your goals, the better chance you have of attaining them.
Mike’s primary goal is to get more orders, and he has a definite figure for gross sales in mind. He has also set a date for when Mike’s Leather will become his sole occupation.
Question: What is your primary goal?
Step 2: Who are you speaking with?
Marketing begins with the customer, and it is unlikely that “everyone” is going to need, want, and have the ability to afford your product or service. Before you know which words to use, you must know who you are speaking with—and you must know the language that person uses.
Mike used three tools to better identify his customer base:
- He asked. This is the best, yet most difficult to enact, way to get information about your customers. Their favorite topic is the same as yours. Give them a chance to tell you all about themselves—whether by way of a customer opinion poll, customer service interview, or friendly chat at the cash register—and they won’t want to stop talking (or shopping). The primary thing you want to know is this: Why did your customers choose you? What is it about your business that draws their patronage?
- He performed some external database research. Databases are marvelous things. Armed with the customer information you already have (names, receipts, addresses, etc.) you can look closely at your customers to determine their profiles . The process is called data mining, and it has become big (albeit controversial) business. Can you accurately identify the attributes of the customers who spend the most money with you? Do you know their generational tendencies, their hobbies, and whether they are also shopping with your competitors? Data miners know all of that and more. Take a look at Nielsen’s Segment Explorer  to see how the big boys do it. Learn more about demographics with Social Explorer . Get a quick glimpse at your website from Alexa . Or locate a public library with access to Reference USA . Data mining is not only for major corporations and government shenanigans  anymore. You and I can join the fun.
- He considered internal analytics data for his website. Analytics programs mine data from your website. Analytics can uncover exactly which keywords prospective customers are currently using to find you. Analytics  can not only tell you which words work (compelling people to stay and buy), but which words don’t work (compelling people to click away immediately). You can also determine which pages and posts on your website are gaining the most attention, where your visitors come from and where they go when they leave, the times of day and days of the week that are most (and least) active, where your visitors are located geographically, the impact of mobile devices  on your business, and much more. Mike waited a while before adding analytics to mikesleather.com. He wishes he would have done it sooner.
Mike already knew his most frequent customers belong to groups centered on spiritual development and recovery issues. By looking deeper, he was able to better identify them by gender, age, income level, and a number of other key factors. He used that information to compile personas  for his customers. That has given him a much better idea of how to approach each segment of his audience. When Mike sets his PPC strategy, these personas will be the primary differentiator for his Ad Groups.
Mike’s job will be to get his products noticed and then build desire for them. He knows, from field-tested experience, that those who own a special book, and see his book covers, invariably end up wanting one. The words and images he uses must attract the attention of those people.
With a resolute effort at identifying your customers, you can glean information that will allow you to focus your PPC marketing efforts in the right direction, at the right time, to the right people. You can spend less and earn more.
What are the attributes of your primary audience?
Step 3: Perform a keyword search
This is the place most people begin. That is why so many fail. If you aren’t sure who you are speaking with or what they want from you, how can you choose effective words with which to communicate?
Mike’s audience lends itself to segmentation. Yours probably does too. Looking to his current sales, he sees that most of his orders are for AA Big Book leather covers. Next, in order volume, are Bible leather covers, then rare and specialty books covers. Let’s drill down to take a look at his best customer group: members of Alcoholics Anonymous.
Here is how Mike can reach his goal (and how you can reach your goal)
Mike wants more orders, and he knows that AA members, once they see his handcrafted leather Big Book covers, want to buy one. He first sets up a landing page to show photos of his work and make it super easy for a viewer to place an order.
His next job is to attract the attention of potential customers and convince them to click through to his landing page. To do that, he plans to keep it simple and use PPC text ads to begin. Later, he will develop display ads (to show off his covers) and use split testing  to determine which method pulls more orders.
Mike begins by making a list of the primary words that relate to his product. What are the shortest possible keywords someone from his most promising audience could use to find him?
- Big Book covers
- AA book covers
- recovery book covers
- leather book covers
- Mike’s Leather
He sets up a three-column Excel spreadsheet to record them, putting his primary keywords into the center column. In the first column, he lists words and phrases a searcher might use in front of the primary words:
- where to find
- where to get
- good deal on
In the third column, Mike lists the words and phrases someone might place after his primary keywords:
- for AA
- for Alcoholics Anonymous
- made in the USA
- by Mike
If my memory of basic statistics is correct, these three columns of five entries each can potentially be arranged to make 125 different keyword entries. Mike’s on a roll.
His next step is to ask as many AA members as he can corner (his primary audience for this cover, remember) which words they would use when thinking about getting a leather cover for a Big Book. That allows him to expand his list even further:
Mike now has 672 possible combinations. Better … but is he missing any others?
Mike looks to two more sources. First, he considers his website analytics data. Unfortunately, the guy who set up Mike’s WordPress theme failed to install any tracking, so Mike has to set up Google Analytics and wait. After a couple of weeks, he notices something much different from the keywords in his Excel chart. Some folks are finding his website by searching for “leather Big Book socks USA.” He adds that to his list of keyword phrases, but it makes him wonder about something else: how can he keep his ad from showing up when someone is looking for “boot socks”?
Mike has come across a critical concept. There are not only words that describe your product or service well, there are words that do not. These “negative keywords ” can cause confusion and lead to clicks you don’t want. That is why a fourth column is needed on the worksheet. Mike adds it, then thinks of some other words, related to socks, that could draw the wrong traffic.
Mike is now at the stage in his search for keywords where most people begin. He is ready to use a keyword tool to help prioritize his list and, perhaps, help him to find even more appropriate words.
Google’s Keyword Tool is the one most newcomers use to begin. It is free, relatively simple to use, and returns some useful data. Google has announced, however, the sun is setting on the Keyword Tool. It will soon be replaced by a new tool, Keyword Planner , available only to those with an AdWords account. No one is sure when this transition will be complete. It may be reality when you read this. Right now (August 9, 2012, at 11:41 pm in Bend, Oregon), the following banner appears on site:
My own favorite tool is the WordStream Keyword Suggestion tool. Okay, I’m prejudiced, but I love the WordStream set of tools. It is a complete PPC tool chest that allows me to do much more than search for Keywords only. For instance, I haven’t mentioned looking at what the competition is doing. That is because WordStream has a tool for that.
Turning there with Mike, to take a look at the possibilities, we see tools enough to make us feel like the only two guys at a Sadie Hawkins Day dance. Which one should we give a twirl first?
Mike’s research has led him to believe that the keyword phrase most used by his best customers is “AA book covers.” He tests that theory by choosing the WordStream Keyword Suggestion Tool . Not only does he discover his hunch is correct, but the tool returns other vital information:
- Search volume
- Estimated cost per click 
- Level of competition for the phrase
Mike can now begin to get a feel for whether his business could profit from a PPC campaign—remember our discussion about Return on Investment (ROI), in the first article  of this series? Mike wants to earn money, not lose it. The research and planning he does now can make or break his marketing efforts in the long run.
Mike opens up the Keyword Spy  to find out which keywords his competitors are using. This enables him to add to his own list (a never-ending process, by the way.) He uses the Related Keyword  tool and finds more descriptors for his quickly growing list. And the Negative Keyword Suggestion  tool helps him not only build his list of words he doesn’t want, but provides a bonus: Mike notices a word he can use to draw traffic from those who may not know his leather book covers are a big improvement from the covers they have been using.
Mike now feels he has enough information to begin building a pay-per-click campaign. And, of course, WordStream has additional features to guide him through exactly how to do that.
There is a big difference between “can” and “should”
Should Mike really start using PPC, though? Can a business as small as Mike’s Leather—with only a few employees and sporadic sales—really take advantage of an opportunity many feel is within reach of professional agencies and big companies only?
Mike has done his homework. Searching on his keywords, he can see that others who sell leather book covers are using PPC. Moreover, the activity is not limited to the Amazons of the world only; some may be mom and pop stores and family businesses like his. Furthermore, Mike knows he can compete on both quality and price. His customers tell him they are more pleased with the covers Mike makes than any similar product they have ever used or seen.
Mike has determined his goal, he has identified his customers, and he knows how to speak their language. In his estimation, considering the data he has collected, PPC advertising can provide a significant return on investment … if he can manage the Mike’s Leather account well.
In the next article in this series, we’ll talk about the “Now what” of PPC. Is it possible to take a DIY approach to PPC, or is that a fool’s errand? At what point should a company consider hiring a PPC manager? Is there an in-between option that can work to deliver PPC results for smaller companies?
In the Age of the Internet, many barriers to entry are significantly lowered—and that is especially the case for entrepreneurship and advertising. Today, very little stands in the way of anyone with vision and the desire to succeed.