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Rather a large topic area I'm afraid Dragonfly...here's some pointers but I stongly recommend reading up A LOT more before proceding down this route - if it's not done properly, it can be very expensive and achive poor results.
1) Think about the structure of your website and then consider the structure of your Adwords campaigns - basically Adwords has a top level campaign and then adgroups within that, keywords and adverts within each adgroup as an example a geographical area might be a campaign i.e Cornwall. Your adgroups might be products i.e. within Cornwall you might sell Pet food and Pet accessories (two sperate adgroups). Keywords within 'pet food' will relate just to pet food and your advert will be tailored to both Cornwlal and pet food offering. Sturcture is very important as it makes pay per click traffic very targetted and more likely to convert
2) When selecting keywords, remember to include negative keywords and consider whether you want broad match, phrase match or exact match keywords (further reading will be required on this)
3) Budgets -Google obviously likes you to spend loads regardless of results. Keep an eye on your budgets and don't always aim for position 1 on search results - position 3 can be just (or more) effective
Thats just some pointers, but there are lots more. If you have the budget for it, I'd consider getting a professional to at least set up your adwords campaigns for you - you can then either outsource management or do it yourself.
There are a few of us on here who offer this service - if you want more info just PM me.
Alternatively, I'm happy to answer any specific question you have as you do your research or set up your campaigns...
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