There is no way you should stop AdWords, try to play around with your CPC estimates and limit your geo target based primarily in the keyword popularity using Google Trends. I bet you this will help you and your clients a lot so as to avoid loosing too much of your advertising cost.
If you mean direct linking with your affiliate link in the ad, I don't do that any more. You have quality score issues and you are also banking on the merchant's ability to sell to the visitor. I use simple landing pages and it works well for me so far. *crosses fingers*
That is the way you should do it if you want to advertise products/offers. Don't direct link to the merchant page.
It is alway better to give the user good content on the product or service then give them a link to the merchant. this works for me
It depend on product/service you are selling. e.g. i sell a insurance product of a particular company where on landing page i explain why it is better/cheap/convenient than other company with information, table, chart and video. so lading page is important then direct forwarding.
So your saying get an affiliate product link, say a book from an affiliate, create a landing page with this link, and good product description charts info ect.. and hope to get the person to click on the product link and purchase the product. maybee through some adwords at it ? is this correct?