My colleague and Google AdWords expert Perry Marshall shares this story:

In 1862 the US Government started giving free plots of 160 acres to anyone who would agree to farm the land and live on it. Hey, 160 acres of free land – sounds like a fabulous deal when you get in your covered wagon and head west to claim it.

Not so sweet of a deal when you discover your parcel is a barren wasteland of dry rocky soil in Western Nebraska and you spend the first year just digging the rocks out, eh?

Even free land isn’t really free. It has to be developed.

Given a choice between 160 free acres and the conveniences of modern developments and real estate markets, most of us would choose the latter. Hey, if all you want is cheap land, there’s plenty of it in Siberia. Right?

Such is the story of the Internet. The race to develop the net has been a story of bringing order out of the chaos. Google accomplished this better than anyone else and in some sense Google IS the Internet. It’s almost impossible to use the Internet without using some service that Google offers, even if it’s just AdSense ads appearing on some site you visited today.

Understanding Google’s system is truly the key to making money online today. It starts with AdWords – the combination of keywords and ad copy that hits a passionate sweet spot in some niche market.

But it doesn’t stop there and AdWords alone is rarely enough. (Yeah I know, you didn’t want to hear that.) But that’s actually good news because what comes next is what separates the men from the boys.

What do people actually do once they get to your website? What elements are persuading them to buy and which ones are repelling otherwise prime prospects?

Google Analytics and Google Site Optimizer – when properly set up – reveal those things to you. One thing I can tell you, though, is *literally* nine out of ten people do not set up Analytics correctly. Leads to all kinds of erroneous conclusions.

Still, make no mistake. A finely tuned AdWords account, silky smooth persuasive copy and the ability to test multiple elements on your site (Site Optimizer) makes your website improve on a weekly basis. The snowball effect inevitably bears fruit.

The dollars you keep are paltry compared to the ones that are slipping through your fingers, *right at this very moment.*

Perry Marshall