I spent $100,000 last year on Google AdWords - it made me some decent money. The costs kept getting higher and higher - I called one of there advertising rep's to give me advice - it cost me around $600 losses in 1 day. Called back, made changes - told them I don't want to take 'risks' like that again. I then tried this 'Enhanced Campaign' feature that I think they're bringing in across all accounts in June - it put me in the negative and I'm now no longer advertising with them.
This part hit the nail on the head:
"(suggesting ridiculously high default bids, goading you to bid more to get on page 1, not showing your ad at all if you bid too low – even if no other ads appear etc)."
Every time I'd call they'd say up your 'Cost Per Click'. Every single time.
I've been doing SEM for five years and worked with the full range of google reps.
Quite simply, don't ask reps for advice on a product they've never actually used (as in, with real money). You're better off investing in a proven SEM expert in your field.
Also, the answers/responses from Google reps are basically read from a training manual.
As for finding an SEO/SEM expert, typically best to go by referral. Most SEO/SEM experts that you'll find on google/forums will run you through templated best practices.
Best to work with someone who has been vouched for.
Although I can't give you any exact answer since I'm not an SEM expert, doing a verbatim search[1] will give you better results[2]. Though you might already be aware of how to do that (but even if so, someone else might not and find it useful). I just add it as a custom browser search[3] using the following URL template to do a verbatim search without having to click on options in google search:
Starting with Adwords on 2003 it aligned well with my business as a complement to SEO. I could test different keywords and it worked. Nobody beats AdWords at the audience and self service system.
But then, we started to see keywords at $ 2, $ 5, $ 10 ... wow, for just one click! At the end we stopped all our campaigns and spend our promotional resources to our blog. And our blog, scientifically, have a better ROI.
I would add that now AdWords is more difficult to administrate than Windows Advanced Server with Exchange.
Of course, AdWords can be quite difficult. But if you are doing it right you can see positive ROI. I have been managing a few account which had trouble doing that. But it really depends on your strategy. Want to play safe? 1. Forget that broad match even exists. 2. Focus on long tail keywords only, this will drive enough conversions while costing you less money.
I am sure that AdWords works! and the reason we paused our campaigns is that I think it's better to spend time on writing articless because we don't have the time to put on AdWords. The worst thing is that I can't really outsource or contract someone to do it because they must know a lot about my niche.
This part hit the nail on the head: "(suggesting ridiculously high default bids, goading you to bid more to get on page 1, not showing your ad at all if you bid too low – even if no other ads appear etc)."
Every time I'd call they'd say up your 'Cost Per Click'. Every single time.