Once upon a time, everyone did their own thing in AdWords. By that, I mean most everyone designed their own campaigns from scratch. They developed their own keyword lists, and designed their own unique ads. Those days are long gone.
These days, most smart marketers scout the enemy before they do anything. Then they use what they learn, along with their own secret techniques, to massacre the competition. Indeed, I've seen warnings from the super affiliates that any highly-profitable market niche is susceptible to attack from those higher (and lower) in the affiliate marketing food chain.
For your own sake, you need to consider adopting some of these aggressive techniques yourself. Today I want to talk to you about one aspect of scouting the enemy: figuring out which of the competitors ads are successful. To help us understand the details, we'll look at how to do this by hand. Just remember that there are tools available that can automate and accelerate much of this work for you.
It may seem impossible to figure out which competing ads are successful without having access to their campaigns. In fact, it isn't that hard, just time-consuming and tedious. First we have to make an assumption. If an ad continues to run for a particular keyword for a long time, that ad is probably successful.
Since you have to pay for clicks in AdWords, it costs money to keep an ad running. Those costs can add up quick, particularly if the ad is in one of the first three spots for a strong keyword. So unless your competitor likes throwing away money, an ad that runs for a long time for a particular keyword is almost surely making its owner money.
To find out if an ad is successful for a particular keyword, all you need to do is check up on it once a week or so for 3-4 weeks, and see if it continues to run. If it does, the ad is almost surely making money. If you monitor which ads are running for each of the keywords you are targeting, after a few weeks you will know which ads are best for your keywords. With that information, you can design a better ad, and effectively steal your competition's best keywords.
This process works, but it is a tedious and time consuming one. Fortunately, there are both free and commercial tools available that can automate and accelerate the data gathering parts of this process. The goal of this conversation was simply to show you that this is possible, and get you thinking about additional ways to scout your competition.
Google Massacre contains many secrets like this one, secrets that will help you massacre your AdWords competition no matter who they are.