In 2012, online retailers spent $2.3 billion in paid search marketing across Google AdWords and the Yahoo! Bing Network, according to AdGooroo. Amazon, Best Buy, Zappos, and Target are among some of the top paid search retailers with upwards of 1 billion impressions.

It's obvious that these retailers have made paid search a large part of their marketing strategy, but some marketers question if search advertising is an effective vehicle for driving sales online. In fact, just earlier this year, eBay released a study suggesting that paid search ads are ineffective, and the research caused a quite a stir among digital marketers.

While the study conveyed some salient points, it was clear that many of the campaigns fell prey to common search advertising pitfalls. For example, eBay was bidding on 170 million keywords, many of which were not relevant to their product offerings or appropriate for searchers. In addition, eBay's paid search text ads were inaccurately being automated with dynamically inserted ad copy.  So, imagine searching on the term "baby" and coming across an ad that reads "Baby. Buy it cheap on eBay. Low prices. New and used." Is that the result you would expect for that query? Would you buy that baby? Probably not, nor could you accurately determine the effectiveness of the channel.

Although I caution the findings, I do think eBay was actually doing the right thing with this study. Something I encourage all marketers to do is to test the results of your advertising investment and to do it often. However, if you are going to test paid search, you must avoid common campaign pitfalls and ensure that you draw the proper conclusions from your study. I asked Noam Dorros, Rise's paid search manager, to share four things e-commerce companies should know when launching paid search campaigns. If you're ready to launch or test a campaign, we recommend the following:

1. Structure the Campaign Effectively

Be as relevant as possible for the user (aka your prospective customer). You want the text ad and landing page to match expectations for the query. If the user is searching for a specific item, your ad should reference that item and the landing page should take them directly to where they can purchase it. With a well-planned account structure, you can target the right customer with appropriate ads and drive more sales online.

2. Use Product Listing Ads (PLAs)

In addition to text ads, e-commerce companies can invest in Product Listing Ads (PLAs). When a person searches for a product, a PLA appears showing a picture of the product, its price and the store name. PLAs take up valuable real estate on the search engine results page and draw a consumer's attention. According to Kenshoo's 2012 Global Online Retail Holiday Shopping Report, it found that Google PLAs generated nearly 1.5 times the click-through rate (CTR) of regular text ads and convert 23 percent better.

3. Enhance Ads with Ad Extensions

Ad extensions are easy to implement features that give companies more ways to promote their brand differentiators and fight off the competition. With ad extensions, marketers have the ability to show more than just plain text in paid search ads. You can add links to multiple pages on your site, business reviews, seller ratings, phone numbers and click-to-call buttons. Ad extensions should enhance your prospective customer's experience and ultimately give them more reasons to visit your web site.

4. Optimize Landing Pages and Site Layout

Driving qualified traffic is only half the battle in paid search. Be sure to consider what happens to consumers after they've clicked on your ad as well. Don't be afraid to test landing pages and make website adjustments in order to enhance the user experience.  Making the on-site user experience optimal for conversion is critical to success.

Consider using tools like Optimizely, an A/B testing tool that allows you to redesign your landing pages to test performance against your existing layouts. Or try Crazy Egg, a heat map tool that allows users to visualize their visitor's interactions on the site. Both are easy to implement and provide tremendous benefit.

Although I am not positive eBay came to the right conclusion, I commend them for understanding the importance of testing. If you have a paid search program or plan to launch one soon, it is crucial that you have a testing program. Use these four tips to optimize your paid search campaigns and continue to test along the way. Then you can decide if paid search is an appropriate marketing strategy for your brand.