What are your AdWords Ratios?
il: You're not getting a statistically significant volume of clicks to make any decisions. Don't raise CPC too much until you know your exact CPA/conversion rate for that traffic source, you'll be burning money.It seems that your campaign is poorly organized- you need to start with broader keywords to get more volume and then zero in on the profitable/high CTR keyphrases.Be sure to try the content network as well, way more volume there.