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john2k
Merchants have a responsibility in this equation as well. They need to successfully convert those visitors/clicks into paying customers. Some are not very good at doing so, which really isn't the fault of the PPC provider.
flyingrose, you mentioned that "All traffic is not created equal." Are you referring to traffic on various Adsense publisher sites? Would a good solution to you be for Google to enable advertisers to bid differently or opt out of specific sites? Adsense, the way I see it, is very much of a RON type system - so it makes sense that some sites will perform better than others.
In regards to the inconsistent conversion rates from your PPC advertising, I wonder if the actions of other advertisers could be causing some of this inconsistency?
As an Adsense publisher I also notice a great deal of inconsistency on a day to day basis. There are days when the eCPM is very low and then days where I am shocked to see how high the eCPM is. I often attribute this inconsistency to advertiser campaigns changing, budgets running out, competitive sites draining the Adsense funds, etc.
So, in relation to your issue, maybe the times you see lower conversion rates are when other advertisers keywords are active, resulting in them getting the higher quality clicks and you getting what's left of the lower converting traffic (traffic that is usually left to other advertisers when your conversions rates are good). This is just a hunch and food for thought.
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Story: PPC Engines ARE Intentionally Diluting Traffic Quality!