Sure, If it's not against the merchant's TOS and if Google will let you.
They only allow 1 ad per domain now so the merchant and 5 affiliates can't all have ads up - only 1.
If you can find keywords going to a merchant that no other affiliates are bidding on, then either you are REALLY good ad finding undiscovered niches or possibly the product isnt that much in demand or possibly the merchant doesnt convert well.
I only use Adwords to make sales by promoting affiliate products, resulting in a click to the product or service landing page. No affiliate sales, no PPC for me. If I'm not getting any sort of return on investment with a PPC campaign, there's no use in my doing it.
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