Adwords isn't dead, it's just not popular anymore. Anything that isn't popular anymore like Myspace and soon to be Facebook (another subject later), doesn't mean that the platform is over or that the effectiveness of the platform is dead. It just means the attention of the sheep has shifted to something else "popular." Adwords is still a great platform to use and you can still get something out of it. There are four keys to help you prepare you for an ad campaign.
Keyword List
This is probably the most important part because this is where the target market is going to be searching for. If you use the wrong list, then you will get the wrong visitors and not get any sales at all. If you don't need that many keywords for your subject or website, then that is what you will need to do.
Content Display Ads
There is a section on the ads that enables you to select what content ad type you want your website to display. You can get your ads displayed on the search network, on website content (basically displayed on adsense sites) and then video ads. The best ad network to use is the search network. It makes things a little easier for you as an advertiser especially if you are not that familiar with the Adwords platform.
A Good Title
Your title should have a universal appeal for the keyword selection you have listed. For example, if you have a blog or site talking about banking in Los Angeles, then you will need to make sure your title has some of these components in the content.
Valid Site To Link
Adwords is very strict about websites linking to your ad. From my understanding, Adwords isn't too thrilled about blogspot links and Affiliate links. You will need to play around with your link and your ads to see what is the best link to submit to your ad.