I am really wondering if AdWords is not pushing the bids artificially higher.
I am bidding on some keywords which cost, according to the first page bid, between $5.75 and $0.05, however, we are only two competitors bidding on them. My guess was that I would need to bid $0.05 only to guaranty position 2. Apparently it is not the case.
I am seeing two statuses at keyword level: “Low search volume” and “Below first page bid”. I understand why I might not be showing on the keywords with low search volume as my competitor is not showing either, but why am I not showing on the keywords with “Below first page bid”? We are only 2 bidding on it so if AdWords was really a bidding system and prices were not inflated artificially, then if I bid $0.05 I have to see my ad, too. The keyword triggered my competitor's ads but not mine! Or am I missing something? I never heard about a minimum bid for AdWords (or I remember in old days that it was $0.05).