When you start getting clicks.

[montyauto]

You bid one term and you start getting clicks.

How many clicks will you allow that ad to receive before you start looking at how much you are paying per click and how much money you are making in sales?

[its_me_shaners]

I This a knock knock joke :-P
Do a profit / loss analysis or a break even analysis.

[quantumtiger]

In the beginning it is best to keep a close eye on your campaign.

Take into account your budget, your CPC , your commission.

Find a balance you are comfortable with so you don't shut a campaign down too early or let it run to long.

This comes by getting "hands on experience", watching campaign and improving (split testing your ads)

[skjes]

I found advertising in Google Adwords an effective way to get your ads across quickly and of course this means sales.

We have to know who are our target markets, how much you are willing to pay for the month and then write a killer ad and all these just takes not more than 10-15 minutes. Of course there is homework to be done first before you plan to proceed with the sign-up i.e please do your keywords research thoroughly and know what your competitors are paying/bidding for.
Choosing the right keywords is the key to getting high quality score and you need not have to pay high pay-per-click rates.
Remember your ad must catch the eye of the right target market and pay attention to your landing page of your webpage as well i.e where you want your potential customer to go when he clicks.
We can also write different ads to test out which one has a higher click-through-rates and stick to it.

Good Luck!