Have you received one of those mailings from Google offering you $100 worth in AdWords? Yes, I did, too, and, against better judgement, I opened a new account to promote this very website you are looking at. It is now several years that I stopped advertising websites through Google AdWords. My experience was that an investment in SEO (search engine optimization) produces far more effective results than online advertising. Create good content; create tons of content; update frequently; apply the simple rules of SEO - This, in my very personal experience, is the best recipe for a successful website.
Yet again, it appears I needed that slap in the face and re-confirm my experience.
Let's have a look at the numbers of my last AdWords campaign: Between August 7, 2011 and September 1, 2011 I paid $234.27 (minus $100 per coupon) for a "whooping" 321 clicks! Compare that to 40,000+ visitors with 80,000+ page views per month. I got all this through good content, tons of content, frequent updating, and simple SEO. Also consider the percentage of fraudulent clicks that help make money for the advertising websites. Google tells you it's only a very low percentage. I dare say that the actual percentage is far higher, maybe even beyond ten percent. Google is good when it comes to detecting clicking fraud, but eliminating them takes away from their profit, and, after all, they can't just catch everything.
And yes, I could have gotten a lot more clicks (= visitors) had I spent more money with Google. Their support people contacted my several times per email, and they were sure, they had some very valuable tips for me. All these valuable tips, mind you, will always result in spending more money. Even if the quality of my selected keywords was not high, I still managed to get the maximum possible clicks for my money.
If I took the before-mentioned numbers, and I had the goal of increasing the number of visitors by, let's say, ten percent (= 4,000) I would have to invest almost $3,000 per month!
And no, I am not willing to spend thousands of dollars to create more traffic. I'd rather spend some more time updating my website. Visitors flow in without Google AdWords. And with a hypothetical annual budget of $36,000 (I wish I had it...) I would still spend my money more wisely.