Is my Adwords account screwed up??

1) Keyword bid estimates from the Google Keyword Tool is utter crap. The bid estimates are something like "This is what it will cost you to get 1st place position + 10% added on top" or something.

So if a keyword might cost you $1.50 for first place, it might really only cost $.20 on 5th place.

2) Even the "estimated first page bid" is utter crap. It can say $0.40 cents, I bid $0.10 cents and still get clicks.

3) Most data Google gives you is useless.

4) Only way to know your real CPCs is to run a campaign yourself and test.

Yes Derek, i know.

But i notice a steep upward trend in those numbers nevertheless, now compared to 6 month or a year ago. I am just wondering whether my account is slapped in such a way that i best should give it up with Adwords.

I dont understand how people get $0.04 bids on mainstream keywords, i need to have a comparison to other adwords account holders to be clear whether theres something wrong with mine. (Historical bad performance, things like that).

If someone checks for "coupon" or "free ringtone" and gets a significant lower estimate i would know for sure.

Derek,

i can also tell you that i read and hear quite often that PPC is *still* all the way on top when it comes to marketing, also especially with CPA. I read about super-affiliates who make $100k/month listing PPC as their #1 source to make money, still.

Even on content network, recently i had a few campaigns running for a...uhm..."feminine" niche with some promising keywords. On CONTENT i needed to bid almost $0.45 for those ads/keywords to get significant impressions. Its just insane if you look at conversion rates and how low the actual payouts are.

There are so many CPA and other products which pay maybe $20-$30...i just dont GET it how it should work with bids in those price ranges.

I agree in principle with what Derek says.

1) Estimates are just that: estimates. Plus, Adwords is a dynamic environment. They can change, go up or down.

These estimates are calculated based on other advertisers. Since 98% of advertisers are, to use Derek's blunt expression, crap (low QS, low CTR), estimates are naturally on the high side. If you are a smart advertiser, you can easily beat those estimates.

And of course, the estimates are for a certain position range. You can ask for estimates in lower positions and see what it says. You also don't have to shoot for the first position.

2) Derek's second point is correct too, at least in my experience. The wording Google uses is misleading and wrong in my opinion. They should have stuck with the old "minimum bid" statement.

Essentially, they are saying that given your keyword's quality, we are imposing a minimum bid of X. So either bid that or improve your quality.

You can bid lower but your ads will be slowed so you may get only 5 or 10% of the available impressions. You'll get the same effect if your daily budget is too low for the amount of searches for your keywords. There is a report called Impression Share that will tell you the percentage of times your ad is shown against the total number of possible impressions.

3) Most data Google gives you is useless.

Derek is kind of harsh here. Any data can be useful. Just take it in context.

4) Yes, run a campaign and test. As I said, smart advertisers can easily beat the CPC and position estimates and have profitable campaigns.