Quite simply, don't ask reps for advice on a product they've never actually used (as in, with real money). You're better off investing in a proven SEM expert in your field.
Also, the answers/responses from Google reps are basically read from a training manual.
As for finding an SEO/SEM expert, typically best to go by referral. Most SEO/SEM experts that you'll find on google/forums will run you through templated best practices.
Best to work with someone who has been vouched for.
https://encrypted.google.com/search?q=%s&sourceid=opera&...
Where %s will be your query.
[1] https://support.google.com/websearch/answer/1734130?hl=en
[2] https://encrypted.google.com/search?safe=off&client=oper...
[3] http://www.makeuseof.com/tag/create-custom-search-engines-go... (for chrome)
[3] https://support.mozilla.org/en-US/questions/780073 (firefox)
[3] http://my.opera.com/community/blog/2009/01/16/custom-searche... (opera)
[3] http://operawiki.info/CustomSearches (some premade searches that add just by clicking, may work on other browsers, but not sure)
SEM Specialists and the tools that they use make your money work very hard - as much as your website will allow it to that is.
Starting with Adwords on 2003 it aligned well with my business as a complement to SEO. I could test different keywords and it worked. Nobody beats AdWords at the audience and self service system.
But then, we started to see keywords at $ 2, $ 5, $ 10 ... wow, for just one click! At the end we stopped all our campaigns and spend our promotional resources to our blog. And our blog, scientifically, have a better ROI.
I would add that now AdWords is more difficult to administrate than Windows Advanced Server with Exchange.
This part hit the nail on the head: "(suggesting ridiculously high default bids, goading you to bid more to get on page 1, not showing your ad at all if you bid too low – even if no other ads appear etc)."
Every time I'd call they'd say up your 'Cost Per Click'. Every single time.