Adwords or Pay-per-Click (PPC) advertising is, essentially, the 21st century equivalent of direct marketing, allowing advertisers to test ideas in hours rather than months; and it can be done very effectively for a few hundred dollars and certainly considerably less than thousands.
The big advantage of this approach is that you can save yourself a lot of money in the long run and take away the majority of the risk involved with starting a new internet business.
You see, as a new entrepreneur, before the internet became so widespread, you would start up a business based on an idea you hoped would be appealing to customers. Unless you had a lot of financial backing there was no way you could research whether or not your new business idea was profitable or not.
It would require employing a market research firm and spending tens of thousands of dollars on investigating the market. Most entrepreneurs don’t have access to that kind of money and even if they did, they might feel it would be spent better elsewhere such as on product or service development, internet marketing or other areas; and certainly not on simply researching the idea.
However, with PPC mechanisms, including AdWords, small business owners can now simply offer online visitors an idea and immediately test their response to it to determine whether or not it will profitable.
The advantage is that this can be done with very little expenditure and it can be done in a short time span rather than having to wait for months or weeks. Essentially, you are asking the market what they want and they are answering you in real time.