There is no specific CTR that is "good" or "bad". It all depends on the keywords and your competition.
That said, figures I've commonly seen quoted as average and quite good, averaged over a wide range of keywords and campaigns are 2.5% and 5%.
That is, 2.5% is common for unoptimized keywords, and most would be pretty happy with 5%.
If you can get sufficient traffic, and you don't mind throwing some away, you can get some pretty incredible numbers by ruthlessly trimming non-performing keywords.
Since I am arbitraging I fall into the latter category. I'm not trying to bring a maximum number of people to a web site, etc. I'm just trying to make a profit on the spread between advertising costs and affiliate commissions. So, after a campaign has had sufficient exposures, I start trimming keywords that are performing poorly.
For the past 3 days, for instance, I've gotten 6% overall, with campaigns ranging from 2% to 10%, and ad groups ranging up to 15%. Some specific keywords range up to 30% or so. It's hard for me to get stats for longer periods, because I had one non-performing campaign (that I ran for one day) that got a very large number of exposures with <1% CTR.
Conversions have been about 20% averaged over the past 2 months.
This is advertising a low-cost product (books) with ads targeted at specific products (i.e. book titles). Your performance will almost certainly vary depending on what you are advertising, and who you are competing against.
It's probably useful to know when you are going up against arbitrigeurs. That situation may or may not come up for you. It's useful to know that we will "cherry pick" high-performing keywords and leave the lower-performing keywords wide open. "Lower performing" is a relative term, and it really just depends on the arb's volume, available capital, and ROI goal.
Oh, I see you are advertising a hosting company, so this may well apply to you, since a lot of hosting companies have affiliate programs. You may find you have some better luck by being more targeted and carving out some more specific web-hosting niche keywords.
I think particularly for your situation the more targeted you are the higher your CTR will be. Searchers are more likely to click on an ad when they are looking for something very specific.
For example, right now I am looking for Xen vps hosting. There are sufficiently few providers of that right now, that I will happily click on an ad for that. Anyone advertising VPN hosting that doesn't say "xen" in the ad is probably going to get ignored by me, though I might click in frustration at the few number of choices. When that happens, it just costs the advertiser money needlessly, and frustrates me.
So, for example, if you do NOT offer Xen vps hosting, it's smart to use xen as a negative keyword, so that you will not get clicks from people looking for something that you do not offer. Perhaps more importantly, at least from the standpoint of increasing your CTR (which will help improve your position and lower your cost) is that you will avoid having your ad shown to people who are looking for something that you do not offer. Think of all of the products and services that you do NOT offer, and put them in as negatives!
Put yourself in your customer's mind and imagine how they arrived on the search results page where you ad appears.