I've seen several cases of bad PPC, but never as bad as what's illustrated in a post from Conversation Marketing post titled Buy A Wife At Target :

"….(Google AdWords has) a tool called dynamic keywords. It lets you place a variable in your ad, so that the search phrase entered shows up in the ad.

Unfortunately it's become a tool for lazy PPC marketers, leading to ads like this: 

 

And this:

 

I meant to post about about it earlier – but really, I see a lot of this kind of thing – when I'm searching on Google – and I wonder if they have any way to checking to see when AdWords is showing results like these – what are they doing about it?

Pay for Click advertising , according to WikiPedia, is "an advertising model used on search engines, advertising networks, and content websites, where advertisers only pay when a user actually clicks on an ad to visit the advertiser's website".

While there are many vendors in the space, and all kinds of advice that is supposed to provide unbiased information"… I've found that most of the advice ends up as a plug for the person giving the advice. But the video I am showing below is the best one I've seen, so far, that explains what Pay for Click Advertising is and how to best do it.  

According to Marketing Pilgrim What the iCrossing Acquisition of Proxicom Says About the State of the SEM Industry the Search Engine Marketing industry is shrinking (read: Saturation).

"..iCrossing is one of the leading SEM firms in the US if not the world. With that being said, however, the Inc. 500 listed their 2005 revenue at only $31.3 million and a staff of 215 people — relatively small by large ad agency standards. The Inc. 500 bases its rankings on companies’ 3-year revenue growth, and the 2005 3-year revenue growth for iCrossing was at 506.4%. Pretty impressive. That means that in 2002, iCrossing likely realized only approximately $5-$6 million. So why would a company on such a hot streak decide to part with its money and invest in a web development company? The answer: The SEM market is shrinking.

Ok, I know you may think I’m crazy — but hear me out. The main reason that a company acquires another company is to increase company value. Period. If an acquisition does not promise to increase value and show a return on investment, then why do it? In a services industry, like the SEM services industry, company value may be measured in a number of ways, including: a) total company revenues, b) backlog, c) assets (including process and other intellectual property) and d) sales potential."

"..in addition to the new revenue influx, iCrossing acquired Proxicom because it realizes that the SEM market is shrinking in the large-scale accounts. While there are a few major players, including iProspect and iCrossing, most large-scale companies today are already participating in SEM in multiple ways, either in-house or through an agency — there are not many, if any, large-scale companies who do not realize the value of SEM today. I don’t think iCrossing was able to penetrate new, large-scale accounts at the same rate as its glory days from 2002-2004 and has begun to realize that it needs a way to a) infiltrate large-scale companies and b) become an interactive agency of record for these accounts."

As the market for Search Marketing gets more saturated (and for every buck spent in online advertising 6 bucks is made for large retailers that have on site stores where you can buy what your researching online – Online Advertising increases in store purchases by 41% – Comscore) there's not as much room for SEM Agencies to grow.