Predicted cpc vs. actual cpc?

[viceroy]

So I've been doing a little research and wanted to get some more data on this...
There's a ton of emphasis on local exacts and predicted keyword tool cpc on here and other forums and I was wondering what the actual vs. approximate (ie. from the kwt) ratio is? I have been running a single key word for a few months now and it's averaging about 64.5% of the exact match cpc that adwords approximates. Is this similar to what anyone else gets? I really thought that running a specific keyword would get close to the approximate cpc of the local exacts for that word?

 

[Jamie101]

Found this :

Google pays 68% of the revenue share to the publishers for "Adsense for Content" and pays 51% of share for "Adsense for Search".

So it seems about right since you're getting close to 65%.

 

[viceroy]

Hey Jaimie, thanks for the reply, I was actually meaning the difference that an advertiser (using adwords) pays vs. the approximate cpc that you get when looking at local exacts.
I'd have thought that the approximate cpc from looking at local exacts would be closer to what you'd pay through adwords? I realise that what you might get from adsense will be around 60pc of the cpc you see when looking at local exacts.

 

[Edwin]

So I've been doing a little research and wanted to get some more data on this...
There's a ton of emphasis on local exacts and predicted keyword tool cpc on here and other forums and I was wondering what the actual vs. approximate (ie. from the kwt) ratio is? I have been running a single key word for a few months now and it's averaging about 64.5% of the exact match cpc that adwords approximates. Is this similar to what anyone else gets? I really thought that running a specific keyword would get close to the approximate cpc of the local exacts for that word?

The approximate CPC inside the Google Keyword Tool is averaged across all ad positions. Obviously your ad can't occupy all of them, so you should end up paying either less or more than the approximate CPC.

For example, if there are 10 ads and you're bidding to consistently show up #1 then your actual CPC is going to be higher than the approximate CPC shown by the tool (since the other 9 ads below you are paying less but they're still factored into the average)

The above is a simplified picture because it's not just a case of "top bidder ranks #1" - ad rank is determined by a complex mix of factors including max bid, quality score, CTR etc.

So in other words it's highly unlikely you'll end up paying the same as the approximate CPC, and if you do it's likely to be a fluke!