After doing some searching through the Adwords Keyword Tool, I created a list of keywords that had an estimated cpc of $0.05 and the monthly searches total to about 100,000. I ran all of the keywords through the Adwords Traffic Estimator and it shows that my daily potential clicks are only 4-10 per day at $0.05/click with a budget of $500. When I raised it up to $1.00 to see if there would be more clicks, it showed an estimated 281-392 clicks per day. So, where is the disconnect? I thought if the Keyword Tool's estimated cpc showed $0.05, then I can advertise $0.05/click. In Traffic Estimator, it's showing estimated cpc $0.57 - $0.86. Which is correct? Why is there such a big difference? Am I doing something wrong here, or is this normal? Any advice is greatly appreciated.
I think the Adwords Traffic Estimator is way off - it always seems that way. I would say that the Keyword Tool is more accurate, but that's just a hunch. One of the reasons your bids may seem high is relevancy - you might find that seperating your keywords into smaller adgroups with more focused ads might lower your cost per click - assuming the content on your website matches the keywords you are bidding on - which is also a factor Google looks at to determine relevancy.
If you want to see the real CPC stay with the traffic estimator,it is accurate,more or less.It is based on previous campaigns history for that keyword. Why a so big difference? If the keyword tool estimated 100,000 searches a month,that means about 3000 searches a day,right?And if you increase the CPC you get a higher position,so if you get a normal 5% CTR,for the first few positions, it means 150 clicks a day from the 3000 searches that day. Hope it helps...