I've seen the numbers for the company I work at and when they adjust their Google ad spending amount, it correlates pretty directly to sales. I was quite surprised as I had a similar feeling before seeing that.

What's interesting, though, is that the company I work for does a lot of repeat business. So I don't think we actually pick up many new customers. It's more that the ads encourage our existing customers to visit us again. They may not even click on the ad.

Then the ad is doing exactly what it needs to. As mentioned elsewhere, the ad doesn't even need clicks; as long as the ad instills a conscious reminder or unconscious reinforcement of the product/brand then it's done its job.

They make practically zero dollars on each, but make up for it in volume. That's a joke, but it's also their reality. They're much less spammy than most spammers, but they have much better targeting and hugely more volume.