Google AdWords is a highly effective tool to drive traffic to your web site or to test a product's profit potential. You can market your product to the world or even target specific countries, states or cities. If you set up campaigns without first learning about the tool you'll make many costly mistakes and conclude Google AdWords doesn't work for you.

Top 7 common mistakes to avoid

1. Setting a high daily budget

It's easy to blow your whole budget in one day or even a few hours if you receive hundreds of clicks but make no sales. If you reduce you daily budget you'll only spend that amount per day and collect valuable data over a longer period. The data will provide the necessary information to help make informed decisions how to tweak your campaign.

2. Targeting the wrong keywords

Google rewards you for relevancy because they want to provide the most relevant information for searches. Use the Google AdWords tool to find keywords closely related to your product then use them in your ad and landing page.

3. Only using broad match

Broad match may get you tons of clicks however you'll waste lots of money on clicks that don't relate to your ad. For example if your keyword is "shoes" you'll receive clicks for "long red shoes", "free ladies shoes that shine in the dark"...get the picture? You can start with broad match to see what keywords receive the most clicks then switch to exact match to receive more targeted clicks.

4. Using too many keywords in one ad group

If you place 100s of keywords in one ad group the popular ones will receive the most clicks very quickly while the less popular ones may receive few or no clicks. If you not collecting results over a long period you won't know what keywords get the most clicks over a week or month period. Start with approximately 10 keywords per ad group then remove those that don't receive clicks. This will give you a highly targeted campaign that's focused on the most active keywords.

5. Not split testing your ads

Google allows you to rotate 2 or more ads evenly so you can see which one performs the best. If you only create one ad you won't know if it is the best one. Testing 2 ads against each other helps improve click through rates and generate more conversions.

6. Displaying your ads on the content network

The content network is where your ads get displayed on other sites besides Google and it's partners. These could be AdSense sites that may not contain information related to your ad or have competing products that distract the visitor. This means you can easily spend lots of money without seeing a return on investment. They are also hard to track. Start your AdWords campaign by turning off the content network and just focus on Google and/or it's search partners.

7. Not tracking your keywords

If you don't track your keywords you won't know which ones generated sales. Use keyword tracking software like Adtrackz to track multiple campaigns at the same time.

Avoid these 7 top Google AdWords mistakes and you'll be on your way to creating profitable campaigns.