Many people wonder if they are getting the best use out of their ad budget when using Google AdWords. One very simple tool to better focus your campaign and target your audience, thereby increasing conversions, is to use Google’s “create an ad variation” tool. To access this tool you need to click into a specific campaign and then click on the “ad variations” tab (alternatively, you can add variations when you setup a new campaign). Now at the bottom of the page you click “create an ad variation”. Here you create a new ad. Start by putting yourself in the shoes of a potential site visitor. Imagine what would entice you to click on the ad. Make the ad short and targeted. Perhaps make it a question; “Looking for cool shoes?” Put in as many ad variations as you can think of. Try ones that you feel might not even work. The whole idea is to let your potential site visitors tell you what they like best. You may be surprised by the results. Let the campaign sit for 1 to 2 weeks and then come back and see which ad has the highest 'Click Thru Rate' (CTR). You should start seeing immediate results!
Note: to ensure that the system displays better performing ads more often, you need to check your settings “edit campaign settings” and ensure that ad serving is turned on to “Optimize” as oppose to the default setting “Rotate”. Rotate will display all ads evenly.
For more info on using Ad Variations see:
https://adwords.google.com/support/bin/answer.py?answer=6128&ctx=awdash&sourceid=awo&subid=helplink