please advise from your experience what is better for conversions: more clicks by setting low price bids for each keyword but to be on the second page (but still get traffic because its high volume search keywords) or to set the keywords to be shown in the first page with high price bid and to get less clicks but "more targeted" as they will see my website first? thanks.
I would go for the second page which will cost you less. not everyone buys from the first website they see on adwords. If your just as competitive in price or better then I would stay on the second page..
Initially get placement for as many keywords as you can but after a week or two I'd say analyze the PPC traffic in terms of conversions, bounce rate, time spent on site and then shortlist the keywords.
The conversion rate will not be significantly effected by which page you show up on. The important thing is to see if these keywords will convert for you at all. You need to install analytics software (I suggest Google Analytics) and then buy ~100 clicks from the keyword to see how well it converts.
Its not about number of sales but rather conversion rate comparison among various keywords some keywords can have conversion rate as high as 60% whereas for others it might be 20%. You need to decide accordingly if a keywords needs to advertised more money or not.
I tend to diversify when it comes to Adwords. I'd say that the majority of my traffic comes from targeted keywords that have less search volume, but have higher placement relative to google serp.