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Professor Benjamin Edelman from the Harvard Business School in the United States says Google's rates are inflated by around 10 per cent and that the all-important numbers of hits are often exaggerated.[abc.net.au...]
But when the Google introduced Quality scores this was vicious cycle in which Adwords users increased rates when the system slapped poor keywords rates , the users had very less options for foolish poor ratings given by system and cycle continued . The different Adword users increased the bid in competition to gain new business and hence many of keywords were sky rocketing ( I am not sure about rates today , i stopped using it long back)
The ultimate gainer in all this is Google and Google and Google.
Well, I have to bid higher in MS Adcenter for same keywords, same landingpages and same ad copy as in Adwords. And for this higher bids in MS Adcenter I get relatively less conversions compared to Adwords.
That has been my experience in some niches as well. adCenter gives some truly ridiculous estimates for bids ($50/click on a $20 item that I pay less than $.30/click for in AdWords).