if someone bids really high on a broad match such as 'party' that means he will show up for 'buy birthday party supplies', and 'kids party clowns' etc...... so if we were hoping to target one of the exact matches with a very low CPC, we can't because the one guy is outbidding us on all of the variations. this could be one reason why there are fewer and fewer keywords with low CPC's.... i'm not sure about this, its just a hypothesis, but i'm eager to hear what others think.
There are at least 10 paid spots on page 1...someone with a high bid can't shut you out of the space. Push you down...yes. Shut you out...no.
so all you need is 10 people bidding over $0.50 on the term 'toy' and they shut out all competition bidding $.10 for terms like 'boston area toy vendors', 'where to find blue toy truck'....? this sounds like a real problem to me, it obviously can't work as poorly as i describe or otherwise CPC's for all terms would be ~1.00
You bid what you can afford to pay for a click (or you should) So does everyone else But as PPC-Coach says, it's not a straight auction, though. You will have a few advantages: Your keyword will match exactly what was searched for Your advert should be more relevant, leading to a higher clickthrough rate Your conversion rate should be higher, so you can afford to pay more per click. So if somebody bids $0.20, and you bid $0.10, but you are much more targeted, you may well appear above them. That said, there's usually a numpty out there bidding way too much so that they appear top (I blogged about this once, here: http://www.epiphanysolutions.co.uk/...the-numpties-are-ruining-it-for-everyone.html