This pic is from adwords keyword tool: As you can see the competition is high , but the CPC is only .05 . I was under the impression that there would be a direct relation between cpc and competition. Someone enlighten me please. Thanks
The price is only an estimate and that's not likely what you will pay. A five cent bid estimate seems to be the default when the system cannot accurately determine an estimate, likely because of lack of data. It can be a good gauge that the keyword could be a low priced one, if you compare it to other similar ones. But I wouldn't bet the farm on it. If the keyword "desilu aunties" shows $0.30, "desi aunties" is more likely the real estimate. Keep in mind too that the estimates are based on average QS. If you have a worst one, you'll pay more, a better one, likely less (but not five cents). You mileage may vary.
ok thanks for replying . Is there a definite way of finding the exact amount one will ahve to pay for a keyword ? Adwords shows the first page bid price for the keyword once a keyword has been added to the keywords list of an adgroup. is there a tool that would fetch this data ?
High competition does not necessary equal to high CPC. If the selected keyword has decent traffic the CPC could get lower. This is especially noticeable for seasonal products. During peak season there are way more traffic so advertisers can reduce their CPC and still get the average keyword position that they want and get decent sales. But during low season, when sales' down, advertisers tend to pump up the CPC to get more traffic to increase the sale. Which result in higher CPC. This is not true for all type of products/business though. Just some of the patterns I noticed in my observation. Regarding fetching the data. You can try Adwords API to fetch the data for further analysis.
Are you checking by country? If you include all countries, you'll get lower rates than if the ad only runs in the US. Of course, your ad may be universally attractive and you could market your product anywhere. I did a campaign for Acai berry in Italy only. My clicks only cost 5-6 cents each. They would have cost several times that amount in a US only campaign.