You'll get a great deal of excellent advice here, and I am pleased to be among the first to offer it.
IMO, you would do well to put the following mantra in the back of your mind, and let it inform everything that you do in your AdWords account.
AWA's Mantra: "Always seek to be targeted, rather than general."
Everyone who has been around for awhile is now saying "Oh well, there goes AWA with that 'Be Targeted' thing again!"
But really, it is good advice. What it really comes down to is this:
* Use keywords that are very specific to what you have to offer. Avoid single-word keywords for the most part. Use 2 or 3 word keyword phrases to start.
* Show an ad that is about exactly what your keywords are about. (Use multiple Ad Groups to achieve this.) Pay special attention to the headline: it is all many people ever look at.
* When they click on your ad, send Google's user to the page on your site which is most highly related to the keyword they've searched on, and the ad they've clicked on.
This is a short (and I'll admit, an over-simplified) recipe for good results, IMO.
May you have fun, & be successful!
AWA
And be aware that for each campaign, you stipulate whether the ads show up on "search" site, "content" sites, or both. I like to keep each campaign either "search" only or "content" only, so I can distiguish them. The number of sites in Google
's network (the content sites) has expanded greatly in recent months, and the quality of traffic from those new sites has been very poor for me and for many other advertisers.
The search site ads produce quality traffic, better than Overture's or any other PPC in my experience. The content ads produce clearly inferior traffic, though. That's been my experience. You might find something different for your ads, but you can't know unless you apply tracking URLs and distinguish between search and content ads.
Another recommendation would be to use several keyword phrases and monitor which ones are successful.
And remember that success is not clicks (those cost money). Success is conversion. True success is getting the most conversions (signups, orders, etc) for the least clicks. Try using a program such as Conversion Ruler to monitor your conversion, or the built-in Google program.