Most companies should be using paid search as a mandatory component of their marketing. And with search engine marketing spending expected to reach $25 billion by 2012, according to Forrester Research, it is obvious that a good share of marketers understand its potential.

However, if a company is just beginning to consider paid search, or is not taking full advantage of paid search's benefits, understanding best-practices is essential to success.

Search is one of the most targeted forms of marketing, since the prospect is already looking for what the marketer is offering. To leverage that built-in personal connection, paid search campaigns should apply the following best-practices, whether executed by an agency or managed in-house.

1. Set the strategy

Like most types of marketing, search campaigns without a marketing strategy are doomed to fail. Consider the following components of paid-search strategy:

• Goals and objectives: Set goals in advance and don't lose sight of them as the campaign continues.
• Target audience: Whether looking for new customers or trying to re-engage with old ones, research and plan keywords and ads around the needs and interests of target customers.
• Offer: Most campaigns require a relevant offer. Consider the available assets and determine what would be the most compelling offer. Consider sales events, whitepapers, research, e-newsletters, or timely events such as webinars or conferences. Coordinate offers with other campaigns—offline as well as online.
• Conversion: Plan conversion elements in advance. Registrations, purchases, goal pages, or email signups can be used as a way to measure success.
• Natural search: Consider natural-search results and make sure that these two marketing aspects are working together. View results side by side.
• Timing: Plan paid-search campaigns around other marketing campaigns, including lead-generation efforts in all channels.

2. Choose the keywords

The keyword list is one of the most important aspects of a paid-search campaign. Some ways to create an effective keyword list are these:

• Current data: Review Web analytics reports both for search terms that people use to find the organization's site and the search terms they use on the site. Evaluate both to determine whether those visitors converted to prospects or customers.
• Competitors: Take a look at competitors' sites and the keywords they use; review natural-search as well as paid-search keywords.
• Research: One of the best ways to find out how customers search for products is by asking them. Companies can use their sales force or customer service desk to ask customers directly, or conduct market research.
• Other online sources: Blogs, wikis, and other user-generated content contain a wealth of information that can inform keyword selections. Marketers should review links coming into their site as well, to see how keywords are used in the links—to determine how others describe the site and company.
• Company terms: Don't forget online and offline campaign names, brand names, trademarks, new products and services, and new industry terminology. Avoid corporate-speak—words used internally may not be the keywords used by prospects or customers
• Phrases: Most people search using phrases, and add on terms when they refine their search. These long phrases can be used for paid search, using options the search engines provide, including paid search listings for any phrase containing a keyword, or negative keywords—ensuring that a listing does not appear for phrases containing specific words.

3. Write the text copy