Here is an excellent article for anybody starting or using AdWords (or any other pay-per-click campaign). Following 4 suggestions in this article will increase return on your advertising dollar and will change AdWords from useless exercise you think you have to do, to a profitable advertising campaign.
Here are 4 main mistakes to avoid:
1. No landing page or an awful landing page.
2. Horrible ads with low clickthrough rates.
3. No conversion or call tracking.
4. Poor campaign structure.
You can find full article here: http://www.entrepreneur.com/article/269621
To your success!