Hi,
We have used Ad Words for about 5 years now - and quite simply have built a business that just wasn't possible before such targeted advertising existed.
We sell large commercial water features and exhibition displays, because its such a niche market blanket advertising, magazines and such like would have been ineffective.
The biggest strength of Ad Words is you can be very specific in your search terms and geographical area. For example we target London (on the basis the ads cost the same but a design company based in London is likely to handle bigger budget projects the world over than one based in Bradford) so if you type 'water feature' our advert doesn't show. I don't want to pay for people looking to buy a £100 garden pebble pool to our site. But if you type in 'Large water wall' or contemporary architectural water features' we do show.
In other words the CPC is largely irrelevant, as no one finds our advert unless they want the exact type of product/service we can provide. This is very important. Equally because what we do is so specialised it is unlikely that anyone looking seriously will not make contact once they have found us.
Our average budget is £100 p/m which brings in a few enquiries a week. Conversion rate from this point is about 1/5 for us. If we are busy we turn the ads off, if we want double the workload we double the budget.
Possibly the best thing about Ad Words for us is that the budget directly corresponds to the number of enquiries we receive - therefore it is possible to speed up or slow down our business as we wish. Previously no form of advertising was so instant or so tune-able.
We are in a sense the perfect business model to benefit from Ad Words but many businesses will see the same benefits.
I think you need to outline your business and what you do. Also the type of business you need to attract. With that info it will be much easier to say if Ad Words is for you.
The good news is most businesses that don;t benefit from Ad Words will be better suited to B2B directories such as Kelly Search.
So what is it you do??
