Many of you skilled retailers out there are making huge strides with your SEM programs. But we know there are also plenty of you who still don’t know quite what to do with or how to handle SEM. Do you hire an expert and bring him/her in house? Will s/he need a team? Of should you just hire some outside vendors to handle it? How will you be sure that your big spend pays off?

The questions could go on, but there are some basic principles that we think can apply to anyone trying to build something from the ground up (or close to it). First off, when building an in-house search engine marketing (SEM) program, you need to start by identifying keywords you will target. Duh, right? We had to say it because it’s step one. Your search ads will appear next to the search results for queries containing these keywords in an order of prominence based on a bidding system for cost per click (CPC). Since your return on investment (ROI) rides on your choice of keywords, you must be sure you choose them with care, thus why we’re stressing it as step numero uno.

Eyes on the Competition

Of course before you do anything, you need a strategy to launch your initial campaigns with aforementioned successful keywords. You can find keyword programs online that will help you spy on the keywords that work for your competition, or you can conduct this research in house.

Either way, you can be pretty sure that the keyword queries your competitors target today are making money for them, so they are probably a safe bet to make money for your company too. For example, if you are selling Windows tablets, and you see your competitor placed the top ad on a search for “tablet PCs,” you can be fairly confident this will be a profitable keyword to cover.

Find Low Bid Opportunities

Next, you should look for opportunities with related query strings that do not have as many searches. Chasing after the most popular keywords will cost your company a small fortune when you get locked in a bidding war with your competition.

You need a strategy to find keywords that are searched less often but are still profitable, and which your competitors have overlooked. You might find something like “top gaming tablets” has been ignored and therefore has a lower CPC, which yields a higher ROI for that query string.

Test and Optimize

“Set it and forget it” might have worked for Ron Popeil but SEM is not in such a category. You have to pay attention to how things are performing over time.  Keywords evolve. Pop culture references intrude on commercial keywords, consumers adopt new speech patterns, and, most important, bidding wars flare up and make certain keywords less profitable. Testing and optimizing your targeted query strings, ad copy, and landing pages will help you increase ROI and online revenue from your in-house SEM program.