I read somewhere that "Serious affiliaters have an adwords budget, even if it just a small budget." What are they implicating and/or refering too? AdWords to their Affiliating sites? Or are they taking out ads that link directly to the affiliate site?
It can be both. I don't know where you read this, but I think they are trying to say, "Serious affiliates spend money to make money". This is true to some extent. You can also make serious money as an affiliate with SEO traffic. But following the latest paid traffic sources and reserving a budget to test them is a great way to increase your affiliate income.
What I'm trying to say is, Adwords is not the only paid traffic source. Especially if you are new to affiliate marketing, you should check some paid traffic sources with less competition. Some paid traffic sources I'm referring are; PPV, Facebook Ads, Yahoo Search Marketing, MSN Adcenter, media buying, etc. I hope this helps.
that entirely depends on how many clicks you need to make a sale and how much commission you get when a sale happen. Just make sure you make more money then you spend on adwords and you should be fine