Rely on Competitors bids?

They seem backwards

[iJeep]

I signed up for advertising a new set of phrases to go along with a new product line I just started carrying. While doing this the bids seemed backwards to me.

Phrases like the manufacturers name and other broad terms were going for almost $2/click.

More targeted words like specific model names were going for $0.10-$0.25/click.

To me it seems like the best value to pay less for somebody who knows what they want and are ready to spend money than for somebody that just knows the name, but not the products.

Am I backwards on this?

[eWhisper]

When I first started ads with Overture (before they were called Overture) this was the standard for new industries getting into the PPC business, and as time went by, the broad words went down, and the specific ones went up in price.

You're right - I'd rather spend the large dollars on exact terms, and little on the broad ones.

However, don't discount the broad ones, I have one client who makes 75% of their sales on a one word very broad term. Track conversions and see which words have the best ROI.