martinibuster - 10:23 pm on Jun 1, 2010 (gmt 0) [edited by: martinibuster at 10:27 pm (utc) on Jun 1, 2010]
The reason I asked the above questions is that the answer determines the course of action.
So here is one way to deal with a specific situation that may or may not relate to the OP. If the phrase is directly or indirectly related to products, but it's not an explicitly buy type of phrase (example: cheap widgets), then I can almost guarantee you that those advertisers are bottom feeding that phrase and it may be possible to push them out.
For example. Suppose you run a site about fishing. You talk about the benefits of certain spinning reels and the sizes of the fishing line, and how to use it to catch certain fish. Let's say your big keywords are How to Catch Widgets. That's not a phrase directly related to selling Widgets, it's indirectly. The advertiser sells a product that they claim will help the fisherman catch widgets. But your site has the answer to the query, which is how to actually catch the widgets. What this means is that the advertiser is bidding on that phrase and counting on getting X amount of clicks at a certain price. The more clicks the advertiser receives that don't end in a sale, the lower the advertiser must bid in order to break a profit.
What you can do is outbid them and sit on that phrase, make it unprofitable for the advertiser to continue bidding on that phrase. I have done this successfully for years. I bid over two dollars per click but because of my high CTR and high level of satisfied visitors (they find what they are querying for), my cost per click is pennies for those particular phrases. The advertisers drop off after a week or two because I made the bidding environment unprofitable. :) But if you don't compete then they will continue to bottom feed. Again, this solution is for a specfic circumstance.
[edited by: martinibuster at 10:27 pm (utc) on Jun 1, 2010]