There's a keyword that I'm using for an ad that has a CPC of $0.95.. when there is no one else competing for that key word. What are the factors that affect the CPC?
Relevancy to landing page and click-through-rate. If you are convinced that the keyword is relevant and adwords just isn't seeing it, it may be worth paying the rate and relying on your ctr to bring the cost down. But, you also have to take into consideration that for new acounts and/or new keywords, with no historical data in your account, adwords will use aggregate data from all accounts to set costs - so a keyword may be expensive from the get-go because nobody has ever got a good ctr from it.
I am most definitely sure its relevant to the ad that I have for it and the search results that appear. I currently have the ad group paused because of the CPC but the CTR was about 2 percent, not that good, but you're right. Maybe after I have some success with my other ads, I'll turn back to this one and see if it's profitable or not. >_> Which I really think it should be, but I'm just kind of scared of the bill that'll run up from it.
Look at the Quality Score for that keyword. I suspect your QS is quite low. Use the free version of spyfu.com to look at competitors over time for that keyword to ensure you dont have any.
This question comes up a lot in the Adwords Help Forum and has been discussed at length here: http://www.google.com/support/forum/p/AdWords/thread?tid=2039fb48585b093e&hl=en The long and the short of it is that a) just because you don't see any other ads, it doesn't mean no one else is competing for that keyword, there are a great many reasons why you don't see other ads, not just that one and b) Google attempts to provide quality ads to its users so, as has been mentioned here, Quality Scores and keyword relevancy issues come into play.
@ PpcIcon and cobnut- So I checked the word, it says N/A for the number of competitors o__o However on one of the boxes below named "Ads", it says there are 0 advertisers. And the QS for the keyword is 7/10 so I don't think I'm not relevant... 3016 search volume from that site ppcicon provided and 125 million for search results.. I am deciding to hold off on this keyword because 1. Google approved it before, but then I paused it cuz I was wondering why CPC was so much, and they took a long time anyway to approve it before. Something about that Google's policies allowed them to choose whether or not to show the ads. And now it's just stuck there. 2. CPC is... like I said, very high and would really kill my budget.. Althought I really think if I had the money, this would really rocket off. Fml.