Ballpark budget figure for a top keyword

[John_Caius]

I'm just trying to get a very general idea of the budget required per month to spend most of the time as the top Adwords result for a popular keyword. I don't understand this adwords thing very well as I've never worked with the right hand side of the page! I'm trying to get an insight into the advertising budget of a competitor who appears to be doing this.

For the keyword I'm interested in, setting up an adwords ad shows that for just that one keyword in English and for all countries, I'd expect 2100 clicks per day. Setting a $1.50 maximum cpc estimates an average position of 1.5 and a cost per day of about $1200.

This seems an extraordinary amount of money. Have I got the wrong end of the stick somewhere or overestimated something?

To be consistently number one (I've never seen them anywhere other than top), do you need an average position higher than 1.5?

[your_store]

I think this going to be difficult for Adwords; because, the bid amount is not the only determining factor in placement. Click through rate also plays a huge roll.

In effect, it could cost you $1.50 a click to be number one, but it might only cost them $0.15 if they have a high CTR.

[TheDave]

I think to get the most out of AdWords without spending a packet you have to use it very carefully. Our first venture into AdWords was a single keyword affair, not bidding too high, just seeing where things went. Where they went was A Lot of completely off-topic hits (looking through referal log at keywords) and a lot of wasted money with a pretty small conversion rate. Now I specifically target ads to 2 keyword phrases broad matched, with some essential negative matches. And if you target phrases with relevant ads, your CTR and position go up. I still see a lot of sloppy advertisers bidding on single keywords without even bothering to negative out the most obvious poor matches.

[John_Caius]

What's a high CTR? 1%, 5%, 10%? The keyword is WidgetLand and the ad is for foobars for sale in WidgetLand, so it's not highly targeted to everyone searching on that keyword.

[eWhisper]

You'd probably get much better results if you changed your keyword to foodbar widgetland instead of advertising for all of widgetland.

I've not seen an overly successful campaign that targeted one single keyword before. Your best bet is to define several phrases of 2 or more keyords that are more related to your product, and then start looking at referrer logs and begin to use negative keywords as necessary.

A highly targeted campaign can hit 20-30% CTR (blue widget in widgetland), where a general campign (blue widget) goes from 5-15%, depending on industry, ad copy, etc. It's almost impossible to say a CTR of X% is good as there are so many variables.

[AdWordsAdvisor]

I can add that average CTR across all keywords on AdWords is probably slightly above 2%.

My gut level feeling only, not based on any formal research, mind you.