Thanks for your comments Mike, as you can tell I really have very little experience in this area so it's very useful to hear from someone who does.
How much involvement does the client have? Put another way; do they expect ads written; landing pages; KW selection etc...?
The example I gave here hasn't been very demanding - it's been a part of an ongoing maintenance agreement. It was the first campaign I've run, so I wasn't sure how best to go about it. In the end I put together a 3 month proposal based on about 6-8 hours work of "tinkering" a month. We worked up a basic list of keyphrases and wrote ads together in an afternoon meeting, and I put it live the next morning. The reality is it's required rather more time than this, partly due to my inexperience and also very few people are aware that the service is available. This means we're targetting "people who might be interested" rather than "people who will be" which seems rather more difficult. I've had to do a lot of work on expanding the keyphrases list we originally came up with. All in all it's been a bit of a struggle and, while interesting, I'm not really up for keeping on with it at the moment.
I can see how it's completely not worth the hassle to manage low budget campaigns, but at the same time it seems like it could be a large market if only it could be served effectively. Loads of local businesses pay to list their websites in shoddy "local directories" in the hope of coming up on searches, but... small scale PPC could really help them overnight.
Anyway I'm digressing: are you able to give me an impression of what kind of spend you think a reputable organisation would start work at? Are we talking ?1000 / month minimum? I'm going to phone around a few companies next week but the more info I get the better. I think my priority is just to get a bit more clued up on this side of things so I can offer advice to people wot need it.