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If you look at the Adwords FAQ it will also give you a listing of sites that Adwords appears on where google listings do not appear, and of course there are all the Adsense sites too (if you want).
Our adwords clicks convert much better than google clicks where we have a top 1-2 listing in the analogous free listings, though we get less clicks.
IMHO most searchers that realize the sponsored listings are paid ads will generally avoid them. I suppose the only way to know for sure is to place an ad...
Do you know what percentage of your adwords traffic comes from sites that do not display the unpaid listings?
I guess thats where we differ. I think it differs according to browsers motivations. Information seekers may well avoid what looks like paid for listings. But my feeling is that to "buyers" they may actually prefer "paid ads" so they can get straight to the point rather than scramble through pages of "optimized content" designed for search engines rather than the buyer. ;)
Just as importantly, they are also assured it will not be a 404, out-of-date, or off-topic as the adwords copy can be more descriptive (rather than ransom notes!), and adwords has mechanisms to ensure relevancy of content to the adwords copy.
Lastly they also know whether an advertiser is a direct seller or affiliate, which they dont know from the free SERPS.
It may also be perceived to show that the advertiser is serious enough to pay out cash for a listing, suggesting they have a more professional, stable business. Im not saying thats a correct perception, as of course SEO costs money too, but Im pretty sure its a common perception.
On your other question, no i dont think we have any reliable figures on percentages yet, but i will ask our whizz kids..
Also take the oportunity to try completely different sales copy from your SERP.
I believe a lower position click can sometimes be more valuable as it has been pre-qualified by not beeing served well with the higher positioned ads, AND the customer is obviously more persistent.
For one of these clients that we promoted using both SEO and AdWords, we found the best overall combination in terms of % ROI was having a Top 10 natural search listing together with a no. 5 or 6 AdWord. This combination resulted in not spending much on AdWords - well, only a few hundred Pounds a day anyway - but not making much in terms of actual profit.
In terms of % ROI for AdWords alone, the best position to be in was no.1 on Page 2. This cost less than the combination above but also resulted in less actual profit.
In terms of Actual ROI, however (ie amount of net profit in cash terms), the best combination was being in one of the Top 3 AdWords slots plus having a Top 20 natural listing. This resulted in a daily spend of over £1000 but also a daily net profit that was higher than the other 2 situations. With a Top 3 AdWords slot, there was very little difference in revenue terms from having a page one or page two natural listing, though we obviously got more click throughs when on page one. This would appear to indicate that for this particular product people do consider the AdWords sites to be places they can buy from and the natural listings to be places they can browse at their leisure.
It's intriguing, though, that since we can no longer promote that particular site using AdWords in certain territories, our net profit has remained similar to that of the 3rd situation outlined above.
For some of the sites we promote in a less competitive market we've found we have to experiment with combinations of positions and they don't always work out as above.
Depending on the marketplace it has to be worth investing some money to work out the best SEO / AdWords combination for any commercial site, I reckon.
Although, to directly address you issue, we advertise for a keyword we're number one on. We now do end up paying for some people who would have been free as they click on the ad over our natural listing, although now our overall traffic for that keyword is up by 10% becaue of AdWords - and the conversion from adwords is slightly higher - so definately worthwhile.