I've tried ad words for about a month. Found it too expensive... Some clicks could cost upwards of a dollar! It really hurts when these users promptly leave the site. You can burn through your daily quota quick quickly. Now, if I were to do it again, I would put a little more thought into what ad words I was targetting. I obviously was using some very popular ad words which cost more. I think the trick is to find a smaller ad word 'niche' that can still draw targetted traffic without competing with the most sought after words/phrases.
I use it to manage my clients accounts and they're getting great results. I know a company spending 12K sterling a month on their Adwords but equally, I know companies spending 500 a month and getting huge RoI.
The great thing about PPC advertising is that it's not very difficult to get results. What you have to realise though is that it's not all about the CPC and CTR. Ultimately it's about conversions into real customers. I know it sounds blindingly obvious but I've seen a lot of people's "great results" and all I see is clicks...no attention to landing pages or split testing etc.
I also got some free Microsoft AdCenter credit recently so I'll give that a whirl shortly
I've been using Adwords in the last year and half way in I realised they give you code to measure registrations..... This has allowed me to calculate how much a registration costs so I can analyse it with far more relevance. It has worked very well to be fair but it does take significant management- at least an hour a day so be prepared to spend time and money initially, once you know what works for you you will find your costs dropping hugely, mine dropped 66% in only 7 weeks and are now at a level im happy with.
You could also try Facebook for a cheaper solution. You create a fan page for your business and they charge about 16 cent per fan they get to signup to your business. You can choose what type of profiles you want to target and the ad appears on the right-hand side of the screen. It also allows you to have a thumbnail display with your ad. Once someone becomes a fan they get your Facebook status updates, which is good for keeping you fresh in their minds. Worth a try!