Now that I've enticed you, I'm merely asking if there is a free solution out there to collect this data. I recently tried a trial software that did this to a crazily accurate degree and I'm wondering just how this is even done and can you find this data elsewhere?
Why oh why are people concerned about what keywords competitors are bidding on? That information is useless for you to build your own campaign. A waste of time and money. Besides, no software can accurately tell you this. I don't know why you are saying it was accurate. The best is competitors giving you the logins to their accounts so you can take a look for yourself but good luck with that.
that is true. you can have the best keywords around but if you don't sell or convert then they don't mean squat...
you should find the smallest niche possible and do not ran after too many traffic, the lesser the traffic, the less competitive it gets....
Using some third party free or paid software may help you gain some insights, but every campaign is different as the strategy differs from person to person. Moreover, a competitor may be showing up for a set of keywords for which you too are bidding, if that be, that is where you need to optimize your campaign to outsmart them.