There are many pay-per-click (PPC) options for advertising a political campaign, but Google is, by far, the most effective and most-used. It's possible for a campaign for or against an issue, for or against a candidate, etc., to become very effective online by incorporating AdWords as a large part of their budget.
The way AdWords is used is not always ethical, however, and as with most advertising forms, the results often go to those with the deepest pockets. The trick is to use PPC effectively rather than blanketing it with bids to rank on every possible keyword related to your campaign. The good news is that it's much cheaper for a campaign to use AdWords in an ethical manner than it is for negative campaigns to try to destroy opponents with it.
An ethical campaign for John Smith whose running for mayor can focus on words like "John Smith Mayor" and "John Smith Boca Raton" and, while the payment per click will be higher for those specific words if the campaign wants to retain top position, it's only for two words. So even at $1 per click, a $1,000/day budget (which seems like a lot, but during peak campaign times in a sizable town, it's not) can keep Smith's campaign in top ranking. What's more, those clicks can be focused to just those who're likely eligible to vote (i.e., focused by congressional district or ZIP code), making the money spent even more targeted.
By contrast, the opponent's campaign that hopes to give a negative stigma to John Smith would have to target a wider range of keywords, including those Smith's campaign is using. This is because learning which specific keywords Smith is using will be a matter of hit-and-miss testing (which could take days or weeks ñ valuable time during campaign season) and adding negative connotations means adding wider keyword options. So not only does this anti-campaign have to run "John Smith Mayor" and "John Smith Boca Raton," but they also have to go with phrases like "John Smith Bad Mayor," "John Smith Great Choice" and so forth. To stay competitive, they'll have to commit several thousand a day versus Smith's $1,000.
Last but not least, negative campaigns rarely work well. Statistics have shown that negatively-focused campaigns tend to have lower conversion rates (in terms of undecided voters) than do positive campaigns. The only exception is when the campaign is about a specific issue rather than a specific candidate. Even then, however, the negative campaign is usually more about rallying the already decided than it is about converting the undecided.
Finally, legal issues would cause that negative campaign some problems. While issues of libel are vague with political speech (usually, you can get away with all kinds of slander if the person you refer to is a politician or candidate), it is still possible for a negative campaign to find itself in deep water legally ñ at least during the election cycle.
Further, Google has specific rules about what can and cannot be said in political campaign ads on AdWords and most other PPC engines will abide by similar rules. They also have specific anti-violence and funds solicitation policies that will also apply. Because advertising on AdWords (including political ads) are reviewed by a human within a few days of being posted, a negative campaign may find itself getting its ads shut down regularly. Even ethical campaigns may have this problem if they do not have a professional crafting their ads for them.
Those who chronically abuse this will find their domain (website) banned from AdWords entirely, so no more ads with that domain link will be allowed. JohnSmithSucks.com would very quickly become a useless anti-campaign if that happened.
Obviously, there are ways a truly negative and unethical campaign could get around all of these rules, but again, they're costly. So unless the anti-campaign has deep pockets, it's not likely to get far.
In the end, your political campaign should definitely utilize AdWords as part of its online presence and, more to the point, should do so ethically and with a professional's guidance.