Google Adwords Budget
The simplest way to begin an Adwords campaign is to set your daily budget at $5.00. You can watch daily to see if your ads are drawing clicks. It's been estimated that 95% of those who lose money on pay per click advertising do so because they fail to keep an eye on not only the daily budget but the results of ads.
Often the most popular keywords will be entirely too expensive to bid on. This is where a long keyword list can come in handy. Try using more of the words that cost less, in addition to phrases and terms.
When ads are producing clicks that result in product sales, you can cut your bid amount in half or even by two-thirds and still get traffic.
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Google Adwords Help Center
Pay Per Click Advantages
When used correctly, pay per click ads get immediate results.
Pay per click ads give you the power to test a business idea and find out if there is a market for it before investing a lot of money.
Pay Per Click Do's
Do research keywords carefully.
Do use specific, focused keywords.
Do monitor ad campaigns closely.
Do set a budget and stick with it.
Do shoot for a position somewhere between 3rd and 7th.
Do know your profit margin and conversion rate.
Do include keywords in ad titles.
Do consider current event keywords.
Do consider buzz keywords.
Pay Per Click Do Not's
Do not automatically bid for the highest spot.
Do not ignore budget.
Do not forget to keep an eye on ads&monitor their performance.
Do not put off turning off ad campaigns that are not getting results.
Do not get involved in bidding wars.
Do not use direct URLs to the merchant site.