It's very easy to spend large amounts of money on your Google AdWords campaign if you don't plan a budget. If you only have a few hundred dollars to invest each month begin with a small budget ie Dollar a Day. You always have the option to increase it if you want to spend more.

Example

If you only want to spend a Dollar a Day ($30/month) on a campaign, look for inexpensive keywords. For example if your cost per click (CPC) is 10 cents you can receive up to 10 clicks per day or 300 per month. This is enough clicks to determine if the campaign will be profitable.

If your CPC is $1.00 you only need 1 click (or 30 clicks per month at $30.00) to reach your daily budget. You won't have enough clicks to judge whether the campaign will be profitable so you'll have to run it over 3 months to receive 100 clicks. This may be too long to wait therefore select keywords with a low CPC.

Strategies for creating profitable Google AdWords campaigns on a Dollar a Day

1. Research keywords your competitors aren't using

Select a product then do extensive keyword research on it to find the keywords your competitors haven't discovered. These may include misspelled words, negative keywords and combinations of keywords.

If you can't find alternative keywords, use the same ones as your competitors but select a different product. You'll avoid competing with them for the same item.

2. Create multiple low budget campaigns

Not every Google AdWords campaign is profitable. In fact only a few will generate enough profits. By observing data from running several low budget campaigns simultaneously, you'll quickly see which ones have the potential to be profitable.

3. Track each campaign

Tracking your keywords allows you to see which ones generated the sales. Use ad tracking software to track your keywords.

Conclusion

Creating multiple campaigns on a Dollar a Day prevents you from quickly spending all your money in a few days. It also helps you to tweak the data you've collected over a long period by making informed decisions.