As with everything, "it depends"

If I'm advertising a specific model product, I go to a page about that product.

If I'm advertising my product line of blue widgets, I will probably go to the category page.

Best click rates and conversions happen when someone types in something very specific such as "acme half inch green widgets" and you make them land on that page and not Flybynite's company widgets.

Now, if you bid on more general keywords such as "half inch widgets" you have no choice but to make them land on the most appropriate category page but your conversions will be lower.

As Netmeg says, if you know specific make, model, size, color or whatever, send them there.

Another opinion echoing Netmeg

Depends on your ad.
Landing page always echoes ad.

"Biggest range of widgets in the West" --> category landing page

"Best biggest blue widget on the web" --> product landing page

Which type of ad (category or product) is getting the best response?

Which type of landing page is getting the best conversion?

Cheers

Thanks for the comments, all three.

The problem with the question is that your limiting yourself to pages that already exist. What you need to do is make specific pages for each ad group. If you already have a perfect landing page for some keywords use it. I don't think you should ever just send them to a category page. You should be making custom landing pages. If you use the example above "half inch widgets" or "blue widgits" you need to make a landing page that shows your best products and has bullet points that sell the visitor. Category pages suck for selling items. Treat a landing page like you do your front page but write it so it is specific to your keyword.

Which is great and useful advice, but it unfortunately doesn't always scale, depending on the site, the keywords, the number of products, etc.

Netmeg it can scale it just takes time. You know which pages get the most traffic. Start with the terms that get the most traffic. No matter how many items you sell there will be a small % that dominates your budget. I am only talking about general keywords so you can eliminate all the keywords that go to product pages. This narrows it down quite a bit. Even if that number is still huge just work on so many a day you will eventually catch up.

As I said - custom landing pages for every product doesn't always scale.

I never said to do custom landing pages for every product.