Our ads convert to signups at about a 10% rate. At $0.16 CPC, that means we pay $1.60 for each signup via Adwords. That's still too low for us to get a reasonable return.
I've tried various things in order to bring up the conversion rate, since I think 10% is low, but this is an area where I'm lost. I've tried making a landing page, A/B testing the landing page, and some other tricks, but I'm out of my area of expertise here. That's what I meant when I said that doing ads is pretty damn hard.
But if I could just hit 20% conversion and stay there...then we'd be golden!
game A: spent $100's on Google ads ... made $0 revenue
game B: spent $0 on Google ads ... made $100's revenue
(disclaimer about other variables, YMMV, take with grain of salt, etc.)
The best I've seen so far was like a 2 year payback period. Not very good. It's gotten competitive enough that I'm rarely seeing Adwords be useful anymore to a startup.