Adwords is a great system, however, many people will tell you it's a waste of money for advertising web hosting. Adwords are going for as high as $5 in the first few positions. You may be receiving 1,000 impressions, however, your advertisement is probably listed at the bottom. Google also has a minimum impression/click ratio, and will probably cancel your campaign soon.
This is one of the toughest things to overcome. Adwords is great, by all accounts, but one thing I've found that works is to search out people that you know that have high traffic sites and do banner swaps with them.
I see many good points for adwords but i have noticed a problem on the other end (webmasters) as most of the clicks you will recieve are incentivized (spelled wrong i think). Though they keep a ver good eye on it it still is not the best way to advertise. The best way is highly targeted advertising (like here for wbhosts) and banner impression payments as CPC programs usually dont work as well as one would think. Just my opinion.
Knowing the experiences of others, I can make out.. Adwords is good if you have a good budget and A proper research on keywords is what you need.
Though it is expensive but has a great reach and easy to use and manage.