Have you ever set up a campaign for a client and got the question, “How much will I be paying each click?” How do you respond? Many times you might turn to Google’s Keyword Tool and look at CPC’s. But how accurate is Google’s Keyword Tool CPC estimator?  We’ve taken a look at actual CPC’s from our clients and matched them up with what Google’s estimates.

Before we look at the stats it’s important to note a few things about Google’s CPC Estimator. In Google’s words:

“If you don't supply a Max CPC and Daily Budget for these estimates, AdWords will estimate your performance using a CPC that is predicted to always place your ad in positions 1-3 with an unlimited budget to capture all available impressions.”

Based off of that, we made sure that the words that we looked at were all in the 1-3 spot. Here are the stats for just 6 of our words:

Between them all there was a 44% difference between actual CPC and Google's estimated CPC! It's obvious that there are other factors in the difference in numbers. The AdWordsPro(a Google employee) clarified this on the Adwords help forum:

"Please know that it is simply an estimate - and in no way intended to be a guarantee. Your actual cost per click will literally vary from one click to the next, and depend on many factors that the tool can not know - such as how well targeted your ads are to the keyword, how well written the ads are, how many competitors you have in the moment the ad appears, etc."

We can conclude from this that YOU CAN'T TRUST GOOGLE'S NUMBERS! Next time you're looking for estimates on average CPC you might be out of luck. Although this can be a good place to start, you can only really know once you start your PPC campaign.

-Luke