Sponsored search, or PPC (pay-per-click) advertising as an agency marketing tool offers a number of attractive benefits: performance-based spend, low barriers to entry, and substantial targeting opportunities. Here are a few essentials to keep in mind whether you’re just starting out or have been using PPC for a while. . . .

DO . . . commit to spend a fair amount of money, or don’t commit at all. One of the best things about PPC advertising is that you can usually set your budget as low as you want. One of the worst things about PPC is that you can usually set your budget as low as you want.

First-time PPC advertisers are apt to dip their toes in the paid search waters by setting extremely conservative budgets – perhaps less than $10/day. Their rationale is that starting out with a low budget will give them the opportunity to beta-test PPC without wasting any money.

The truth, however, is that per-click costs in the finance/insurance sector are among the most expensive due to a crowded and competitive marketplace, and $10 might, if you’re lucky, get you a couple of clicks. You’re unlikely to get a single conversion, or lead, out of these clicks, and that’s money down the drain no matter what. PPC advertising, like most advertising, works best at scale. My advice: commit at least $100/day and give it a try for 3-4 weeks. Anything less won’t provide you with enough performance data to justify the effort.

DO . . . your homework up front. Platforms such as Google AdWords provide excellent tools for keyword research and performance projections. Use these, and take a look at your own site’s analytics to determine what keywords are driving quality (i.e., high-converting) traffic to your site. Try to avoid just throwing a bunch of stuff out there to see what sticks. There’s plenty of data and research to guide your efforts and add some method to the madness.

DO . . . target geographically. Would you air a TV ad in New York if you’re a Tampa-based agency? Probably not. The same goes for PPC advertising. PPC platforms offer you the option to display your ads only to searchers in specified markets – down to the zip code, even. You can, and should, include locality in your keyword phrases (e.g., Jacksonville home insurance). This minimizes your competition with national carriers and lead generators, who spend millions and will drive up your per-click costs or drown out your ads altogether.

DO . . . try different ad variants. Sometimes even a subtle change in wording can make a world of difference in an ad’s performance. Create at least half a dozen ad versions and throw them out there. Most PPC platforms will assess each ad’s performance and automatically show better performing ads more often. Take advantage of this, and never stop experimenting.

DO . . . create separate campaigns for each line of business. It rarely makes sense to run auto insurance ads within the same campaign as home insurance ads. LOB markets vary considerably in terms of demand, purchase cycle, and margins. Segment accordingly.

Next week, we’ll take a look at some of the DON’Ts of PPC advertising. Have questions? Feel free to use the Comments section below.