I went to Campaign management >> Tools >> Traffic estimator and wrote my keyword and then selected my countries and then it said average Estimated Avg. CPC = $1.74 - $2.57 Is this how much i'm going to have to pay per click? So where does quality score come into play? Once i set up the site, and make it really relevant to the keyword i am buying traffic from, will the cost per click go down? Or is it going to remain at 1.74 - 2.57 per click? Cause honestly.. i see absolutely no way how anybody can be making money with that much money per click for the keyword i'm targetting...
The numbers are wildly inaccurate, and don't take into account your QS. You bid an amount that is profitable for you, and accept the position in the search results that that gives you. There's no point in bidding more than: (Profit Per Conversion) / (Conversion Rate). And you're under no obligation to pay more than your minimum bid (which IS based on QS). This is the range of bids that you should consider - they are all profitable, and you have to find the one that's most profitable for you. As long as you get conversions, and you have a good QS, there's no reason to not make money on Adwords, it's just a question of how much you can make...