A quiz question for you

[bazza9]

Ok - let's see how many of you can predict what would happen in the following circumstances.

I set up an ad group with one ad. It only appears for one keyword phrase (which is an exact match).

The keyword has a quality score of 'Great' and a minimum bid set at $0.03.

I'm the only advertiser on the keyword term. I set my bid to $50. How much will I pay for each click?

[Rehan]

$0.03 on Google's sites, and up to $50 on the Search Network.

[MarketingJunkie]

It depends on the keyword, not on the competition.

More than $1.00 a click is my guess (although I wouldn't be surprise if it came in at 34 cents, actually).

I'll bet you 3 cents you won't get a 3-cent click:>

Being the only advertiser seems to no longer have anything to do with your click cost. In fact, I find have competitors lowers my click costs in most cases.

Anyone else seeing this?

[mike_ppc]

How can you be so sure you are the only advertiser on all places targeted?

[bazza9]

MarketingJunkie - you're seeing exactly what I see.

34 cents per click, where I'm the only advertiser and the quality rating is good. Does seem that competition now makes little difference.

[JustGirl]

If you change your max bid to .05 will your ad still be displayed?

[smallcompany]

That just proves that Google AdWords is “an animal” with no head or tail. You can’t catch them for any part of their “body”. I guess the price is determined by engine’s prediction. Same as with quality score. As soon as you create new ad group with new ads and keywords, you get QS and some position (unless minimum bids are applied).
That means that no matter how complicated the formula is, they use pre-set stuff. That is why people see QS going from “great” to minimum bid of $10, in some cases.