Am I understanding this correctly?

First off, I tried a search on DP and couldn't find a post that made it clear for me, so please forgive me if this subject is asked often.

I'm trying to set up my adwords keywords. I'm using the Traffic Estimator utility to figure out how much I should set for my cpc and daily budget.

Here's what I'm getting:



Does this mean that I can set a max CPC to 10 cents and show up in the 4-6 ad positions for searches on those keywords (not including writing covered calls)? AND, if someone clicks on my ad, it will cost between 5 and 10 cents.

I also played around with it and on several occassions I would enter a lower CPC value, and my Estimated Ad Positions value would improve. Which makes me wonder, how reliable is this tool?

Thanks for the help!

 

not reliable. Don't use it.

 

Just run the campaign and for the first 2 weeks tweak the CPC every other day based on the new data.

 

Well, that's no fun.

Would it be a good idea to allow Adwords to set my CPC automatically to ensure I get top placement just to get a better feel for what the upper tier CPC value is?

 

You can but I tested their 'auto' bids for 2 days and you can guess what happenes... Budget flies out of the window in no time, without better results.

There's no simple way of doing this, campaigns have to be worked, and worked hard.

 

You can try exact match for your keywords for more precise targeting. Also, if you use dynamic keyword matching in your ad, that will increase your CTR.

 

Screenplaya, can you explain that in a bit more detail using an example? Thanks.

 

The Overture tools are far more accurate for estimating traffic and the cost per click of keywords, you can normally double the figures displayed for AdWords though.

Traffic:
http://inventory.overture.com/d/searchinventory/suggestion

Bids:
http://uv.bidtool.overture.com/d/search/tools/bidtool/