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It depends if you are an end user (ie a biz doing your own marketing) or a middle merchant. If you are reselling advertising than profits don't matter. ROI has never been a marketing mantra. They sell impressions and exposure.
As a business myself the return on any ppc is slim or none. We justify the loss as part of our regular wholesale advertising budget. As a stand alone the ppc models are not break even.
Other clients have leads for accounts coming in through Adwords, and considering the average account brings in five figure incomes for a company.. a few hundred dollars spent on Adwords can easily translate into an account or two.
In these specialized areas, the Adwords spend isn't the problem.. it's the traffic. Not so many people are searching for the specialized/localized stuff, but when they do.. we grab em in the SERPs AND by AdWords! :-)
Its twice as hard if whoever you are promoting doesn't have conversion tracking to enable you to know what terms are converting. Its like playing darts blindfolded.
The introduction of extended broad match match made it (IMHO) a much more difficult game to play. Campaigns went from a couple hundred keywords to thousands and its still an uphill battle.