Using CPC for Keyword Research

If you're monetizing your site with Adsense, it's a good way to tell how much you're going to get per click. If not, it can be used to loosely estimate how much competition the keyword has and buyer intent. There are much better ways to estimate that though...

I've found that keyword strings that carry a really high CPC (I've seen as high as 80 dollars CPC) usually have ready and willing buyers and a bunch of websites competing to get ads placed. The products or services being sold are typically high dollar and a lot of money is made from each sale.

simply click on the keyword(s) in the G adwords tool and see how many sponsored advertisers are there in G search in the far right column. The more the better because they are paying to be there. The value is not set by CPC but by traffic. CPC is an added bonus.

What makes a niche good to get into is the amount of traffic it gets, the competition and monetization. CPC is a measure of how monetizable a niche is. The higher the CPC value, the better it is.

Here's a newb question:

I found a keyword that gets about 8100 exact searches per month, and I was able to pick up an exact match domain (www.keyword.com) and the estimated CPC was about $3.50.

I'm now ranked #4 on the first page of Google for the keyword, and I'm getting traffic, and I'm getting clicks. However, I'm only getting about $0.05 per click. This is a little ironic because I have another exact match domain for a different keyword, and I used a ****ty free theme and posted 1 article to it. I didn't expect much because the estimated CPC was only $0.05. However, it's now #5 page 1 of Google for its keyword, and the other day I got a click and it netted me $1.73.

Can anyone explain this to me as to why the difference in estimated CPC and what I'm actually getting? Will the cost per click increase for my first site as time goes on? I'm really frustrated because I saw the potential of the site and the low competition, so I spent money and time building it, only to have it give me a ****ty payout now that it's getting traffic.