As many have posted below there is more to Adwords than just the auction - creativity in forming the ad, landing page, keyword list (yes get innovative, target

As many have posted below there is more to Adwords than just the auction - creativity in forming the ad, landing page, keyword list (yes get innovative, target tail etc) matters. But when you mention of success stories I would assume there are 3 main aspects to measure your spend against: 1. direct revenue: actual money 2. quality of users: conversions, usage stat, repeat users/loyalty 3. scale: traffic volumes Most startups when they launch do it for #3 traffic, mid way focus #2 tune conversions, if they are still signed up #1 happens. It is hard to represent or measure #2 and #3 in monetary terms. Yet every campaign value should be weighed taking into account of usage and traffic generated along with direct revenue. If you can figure out your formula - and see if adwords cost is less than value generated - it is a success. Good thing with adwords is it is a knob, once the wheel is set to operate at positive levels its easy to scale in terms of volumes by increasing spend. In terms of when to start doing PPC I would suggest work backwards look at your conversion rates - lets say for a random set of y number of users 2% sign up and generate x amount of revenue. So effectively you are fine spending x * 2 amount to get this set of y users. Cost of acquisition = y/x with given conv rate. If you can set up your adwords campaign to get a click at this rate it is promising. Of course there are complexities as conv rate would be different (mostly better) with adwords campaign than organic users. Revenue generate x is tough to measure with indirect revenue aspects - loyalty, usage, traffic etc and has to be dealt individually.