You need a PPC campaign to drive visitors to your site in order to generate leads and sales, but you don’t have a big budget. So, how do you do it?

Bootstrap it! Start small and continually reinvest the profits to grow the campaign.

1. Choose a Niche

Select a niche market that represents your entire market well, so that you can learn from and scale the campaign once you are profitable. The goal is to develop a manageable campaign that has traffic, yet is small in size and low in competition. This will allow you to pay less per click and conserve your budget while figuring out what traffic sources work.

2. Travel down the long tail

Choose long tail keywords and avoid high-level 1 and 2 word keyword phrases that are highly competitive. For example, if you are in the car insurance industry, avoid keywords like “car insurance” or “auto insurance”. Instead, advertise on longer tail keywords like “car insurance in los angeles” or “car insurance for 2008 honda odyssey”, etc.

3. Keep it small

The most important part of creating a successful campaign on a small budget is to keep the entire campaign small. You’ll need to select a small group of keywords to target and focus on. You should still create separate search and display campaigns but keep them both small and consider focusing more on one than the other.

Your goal is to maximize the spend of your limited budget on a minimal amount of keywords. You need to receive several impressions, clicks and conversions for each keyword and creative in order to optimize. If you only receive 1 click or conversion for every keyword or creative in your campaign you won’t know the actual effectiveness of your campaign.

4. Maximize your budget

No, I don’t mean maximizing the spend of your budget, but rather maximize the usage. Get the most from your budget by learning and spending it effectively.

Advertising networks don’t want you to know that it’s possible to create a profitable campaign by spending very little, but you can create a successful campaign with as little as $25-$50 a day. Of course it’s easier and faster to throw a lot of money at a campaign and learn what works and what doesn’t. But, when you don’t have a large budget, you don’t have the luxury of simply spending more to learn.

Early in your campaign your budget will go towards “learning”. This “learning” is not wasted spend, since you can’t learn without spending. Once you’ve learned all you can you’ll be able to optimize and grow the profitable areas of your campaign.

5. Keep testing to a minimum

Testing and optimizing is what makes PPC campaigns succeed and differentiates the winners from the losers. But, with a small budget you will need to keep testing to a minimum.

With a small budget campaign each ad group should have a maximum of 2-3 ad text creatives and landing pages can only effectively be tested via A/B testing. Remember, you need a lot oftraffic to determine what works, so you’ll need to focus your small amount of traffic on a few tests to learn and know for certain where and how to optimize.

6. Set it and forget it

Set up your campaign and then forget about it. Your budget will ensure that you don’t lose or waste money, but you need to let your campaign run for a while so that you can learn from the statistics that you gather.

It will be difficult to sit back and watch your campaign run and spend without touching it. But, resist the urge to make any changes before your campaign has received enough statistical data to make the correct decisions.

7. Grow and then grow some more!

Once your campaign is achieving profits you can begin increasing your budget. You’ll start by slightly increasing your campaign budgets a little bit at a time. Increase your budget by double, and then run it for few days or a week. Make sure it’s still profitable, then double it again and run for another few days or a week. Continually repeat these steps until you’ve got a very profitable campaign that is self-sustaining.

Once you are at this point you’re budget becomes irrelevant and as long as you have the cash you can continue spending and growing your campaign based on profits, rather than based on a budget. Now you can grow the existing campaign and/or start another niche market campaign and repeat the process again and again.

Mike Williams is the Founder and President of Clickworks Marketing. Mike has been involved in online marketing since 2004 and has a wealth of experience in lead generation, search engine marketing, landing page optimization and web marketing strategy. Mike is a Google Adwords Certified Professional and has years of experience managing advertising campaigns on Google, Yahoo!/Bing and Facebook.