I never click those! Ok, so maybe you don't. But someone does. In fact a lot of people do. How do I know? Well, for one, it's all trackable. Beyond that, what makes someone click one of the Google Adword ads as opposed to going straight to the organic? Well, there is some science involved and yes even a little slyness on Google's part. Haven't you noticed?
Is it just my monitor or has Google reduced the fade on the advertising section of the search results to blend in with the rest of the page? With a quick glance, it is hard to see! On some monitors it is better. On mine it is all but washed out.
Anyway, not the point. Google can make their ads whatever color they want. Some people avoid them like the plague. They're too "commercial". But then, that's the point. They work when you have a commercial interest.
A recent study sheds some more light on the ads section. To summarize:
"Approximately 90% of participants looked at the sponsored results above the organic results in each search task. [...]
Fewer participants looked at the sponsored results on the right side of the page – only 28% of participants looked at these results on Google and 21% on Bing. [...]
100% of participants looked at the organic search results in each search."
(here's the entire study: http://www.usercentric.com/news/2011/01/26/eye-tracking-bing-vs-google-second-look)
So, here's some sage advice:
1. Use PPC for your business name(s). The cost is low for these keywords and you can't afford not to show for this search.
2. Use PPC for top keywords in your business category if you're not ranking for them and maybe even if you are. Your goal is to own as much realestate in the search as you possibly can. You can track your expenses with PPC and determine if it has a pay back.
3. DON'T use only PPC as your only internet marketing strategy. Some businesses do this. When the money runs out, so does the traffic. Apportion your internet marketing budget so that no more than 20% is used for PPC. This can be higher at the beginning of your campaign simply because you're not ranking organically or in MAPS. But make sure you have a strategy for achieving ranks in organic and MAPS.
PPC is not an all or nothing strategy. Although I can't prove it, I would also suggest that you rank better organically by using at least some PPC. The reasoning is that you wouldn't be spending money on a site that didn't carry some credible weight. You should be optimizing the site for the keywords you are using in Adwords too. It can make your adwords campaigns cheaper by reducing your overall click costs. Google at least does pay attention to the quality of the traffic they are driving even when it's paid traffic.
With a balanced approached to Pay-Per-Click, you won't have to spend a ton of money. You can apply it to keywords you know you want without going after everything out there. Be smart, be strategic and be careful out there : )