(I'm a PM for AdWords, sharing my personal opinion based on experience and not speaking on behalf of Google) If you want to avoid a money pit, I think you can.

(I'm a PM for AdWords, sharing my personal opinion based on experience and not speaking on behalf of Google) If you want to avoid a money pit, I think you can. The trick is to pipe conversion data back to AdWords. This is pretty easy with Google Analytics but also not too bad to set up with any analytics provider. If you're starting fresh, you will need to spend some money blindly (without the benefit of historic conversion data). But, once you start seeing some conversions, you can use our automated bidding strategies to say "only advertise when you are confident you can drive new users to sign up for less than $X." My other tip would be to spend some time writing good ads (clear articulation of benefits, use all of the space provided to you, and make at least 5 that can be rotated against each other) and picking good keywords (multi-word as a general rule, and specifically related to your business, not too general and not too competitive). Finally, call support and say you're new and you'd like help. We have big teams of specialists ready to get new advertisers off on the right foot, because we know that your first couple of weeks are crucial to keeping you. They're actually really good.