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AdWords tends to be expensive i smaller locales and cheaper if you go global. There are 2 destinct kinds of AdWords campaigns. Text ads (Search network) and graphic ads (Display network).

Ads on the display network can be very inexpensive. We are talking 1 cent clicks, but this channel is hard to narrow down to a small niche. Text ads can be made very specific and only be triggered by certain keywords and thus they are more expensive. The use of display ads demands more keywords (1000-30000) and thus they are not that targeted.

I use AdWords all the time. It is complicated but once you learn it you can tweak it like nothing else.

I have not yet signed up to adwords, but all I hear usually is that it's quite useful and helpful. I think when you set up an account, you just need to find the right keywords to match your site, otherwise you will not get through it.

Keywords are important. Positive keywords as well as negative.