When I looked at price of click for my niche, it was around $0.03 for positions 1-3. Now Google is charging me $0.33 for click. What's going wrong? Ok, I made a really, really nice web site, lots of pics, lots of info, lots of user comments and so on. So it is not site.- And I split keywords into keyword zones and started advertising. I made an error and selected content network, which gave me thousands of ad impressions but zero clicks. So I turned that off. I get CTR (click through rate) of about 2-3%, which I guess is neither good neither bad.
2-3% isn't bad really. First of how did you get a price for positions 1 - 3? As far as I know Google just gives you a first page bid estimate? (Which, in any case, is always totally unreliable - it usually advises you to bid more than you actually need to) Without knowing how you got these prices it's pretty hard to say, but taking a guess it's one of two things: 1) the prices are unreliable - even more so if it's not a google tool you're using 2) your Quality Score might be low. There are lots of posts on here on how to improve your QS - do a search in the adwords section and you'll come up with loads of stuff - also have a look at some of my previous posts
Remember this is a bidding game. For same keyword someone else is bidding on maybe 0.32 so for your ad to display 1 higher google will charge you a penny more.
Your QS , adword account QS History , competitor , your keyword must relevant to ad and ad must relevant to landing page all that will effect your biding cost.
Am I right in thinking that you don't necessarily pay the full amount you bid per click - as your actual CPC depends on your QS as well as your max bid, so strictly speaking you can bid quite a bit more than your next competitor without you actually paying that much?
henrylang73, correct you 'usually' pay less than the bid price and it depends on the variables that you described. But 'less' could also be a penny. I would recommend setting higher bid to get QS and setting reasonable daily budget.