CPC cost in Google's Keyword Tool

How reliable is this amount?

[spietreser]

Just checking out some interesting keywords in Google's Keyword Tool (external).

I would like to know how reliable the cost per click number in the CPC column is. I'm assuming that this is the highest bid for a particular keyword.

But is it a reliable number? Have you found out if this really is the amount I need to bid to START out on #1 for Adwords ( for this question, please ignore the performance based 'discounts' that they give ads with high CTR).

Thanks!
spietreser

[netmeg]

I don't use that number at all myself. But you probably do want to start out high, and then adjust down. If budget is a concern, keep to a smaller daily budget and fewer keywords, until you build up some quality score and good history.

[spietreser]

Thanks for your reply netmeg.

What I would like to know is if this is the amount that the highest bidder is currently paying for this keyword?

Here's what I've found on Google's Learning Center:
"If you show the Estimated Ad Position or Estimated Avg. CPC columns, a field labeled Calculate estimates using a different maximum CPC bid will appear. If you leave the field blank, the estimates in these two columns will be based on the maximum cost-per-click (CPC) bid that would likely put your ads in the first, second, or third position on a Google search result page."

So if this is the amount you'll need to get in position #1 or #2 or #3, then this amount should be what you can expect to pay... according to Google. However, I can't find out if the keyword really costs $8,xx (seems rather high for some keywords!).

[netmeg]

You really can't get any idea of how it will go until you test it for yourself.