Following up on Charles Thrasher's post on the Analytics blog, Search Marketing is Hard, here's a quick crash course in what to look for after running your performance reports in adCenter.  If you're not confident in finding your way around the "Reports" tab, I'd recommend reading Justin Vanning's post, Introduction to adCenter Reporting or take a look at the adCenter Reports Flash tutorial first.  

REPORT: Ad Performance

WHAT TO LOOK FOR: Click-Through Rate (CTR)

Ads that aren't resulting in clicks can drag down the quality and CTR of your campaigns, causing them to cost more over time. After running an ad performance report, sort the CTR data from lowest to highest so you can easily see which ads are in need of your attention.  While the definition of what constitutes a good CTR can vary widely, a good rule of thumb is to consider 3-4% as a starting point. Should you find that you have several ads that are showing with a 2% or lower CTR, you may want to consider deleting them and possibly replacing them with more effective ads.

REPORT: Keyword Performance

WHAT TO LOOK FOR: Average position

One of the quickest and easiest ways to improve your campaign's performance is to boost your bids for keywords that are showing below 4th or 5th position.  Additionally, if you're bidding on just one match type, you may want to consider expanding to cover all three match types; bidding higher on exact match for generic terms and higher on broad match for long-tail terms.

REPORT: Age and gender targeting

WHAT TO LOOK FOR: Impressions and Clicks

Although age and gender targeting is not necessary across the board, it can be helpful if you have a medium-to-large sized account; you'll be able to see which age groups and genders are making up the majority of your impressions and clicks (NOTE: this data is collected only from searchers who are logged into their Live, Hotmail or MSN accounts). Armed with this information, you can cater your copy and/or bidding strategy to capture as much of this traffic as possible.  If, for example, you notice that women between the ages of 25-34 are bringing in the most clicks, you may want to start using incremental bidding to keep your bids and positioning competitive for that demographic.

If you have your own best practices for keeping your campaigns' performance strong, we'd love to hear them!  Feel free to add your comments detailing what you do to maximize your ROI.