My experience is leading me to believe:
On keywords that have few or no other advertisers and low query volume, the qs algorithm is unreliable and can produce this sort of effect. You can be the only person bidding a word and in spite of your excellent click-through your minimum bid keeps going up.
There are definitely keywords that the system rejects no matter how hard you try. Often these are industry words that aren't in the google dictionary. Maybe in your industry there is a term "sclafs". It may be very relevant to your business and people in your business use it all the time, but relative to the rest of the volume going through the google engine it's still very small. You can launch these words and eventually they will all head into the qs badlands. You will find in time that no one else is able to advertise under these keywords either. Misspells can be like this too.
It sucks, it's broken, but there's not much you can do about it.
Of course, Google will assure you that the system works like it's supposed to, the problem is your's to fix not theirs.
I'm offering $1000 to anyone who can solve this problem for me (but not share it publicly - afterall, It's a competitive world out there!)
[edited by: BigSpender at 1:34 am (utc) on May 31, 2007]
they told me to try and group misspellings in ad groups better.
i kind of see what he is getting at though...some misspellings could either be one word, or another word I am actually not targetting.
That is fair game, but if I have 60-70% CTR, my keyword prices should not be going up...