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When setting my Maximum CPC, I have found that the estimated clicks is ALWAYS underestimated compared to actual clicks received and the estimated position is ALWAYS lower then the actual average position achieved (even just seconds later). My instinctive reaction to the low estimated traffic and position is to increase my bid to raise my position to grab more of the pitiful amount of estimated traffic. Is this:
1) A deliberate ploy by Google to encourage me to bid a higher CPC?
2) (a more charitable interpretation)Google lowering my expectation so that I am more satisfied with the actual results?
3) Google's estimates just being wildly inaccurate? - I can understand difficulty in predicting traffic, but not in predicting position - it's just the same calculation it does when displaying the ads.
4) Google not understanding the UK? (my campaign is targeted at the UK)
You can often just start a campaign, get it up and running and get your own idea for likely traffic inside an hour or so. I'd also suggest that to ensure your campaign works properly, set your daily budget higher than Google originally estimate.
The bit I really can't understand is why Google can't predict the ad position accurately - they have all the data they need for that. I have found it will predict, for example, position 3, and then it will actually display at number 1 just a few seconds later. This doesn't just happen occasionally - it is consistently wrong. There's only a handful of competing ads, so why should it get it wrong?