High AdWords Cost with Low Traffic

[RustyF]

I'm seeing a lot of keywords with very little traffic but high, sometimes very high cost per click in AdWords.

Can someone explain to me why this is common?

I'm researching buying keywords.  With the low traffic they seem like little value but when I see people $20 a click it seems like high converting and thus maybe worth going after. But the high cost is just not making any sense to me for many of these keywords.

Thanks.

[SEMPassion]

Cost is based on the competitive market for the keyword, not necessarily on the search volume, so don't let low search volume mislead you as to CPC.

Where are you getting your Cost per Click figures?  Google often suggests a much high bid than is required.  Also as you drop down in position you can see a significant drop in CPC.  Position 1 might be $20. per click, while position 3 might only be $1.25 per click.

Sometimes you do run across a keyword where you can't justify the cost.  Just keep looking, there are plenty of other keywords you can consider.

[RustyF]

I see the results in SE Cockpit which I am pretty sure that they get it direct from AdWords though.

I'm not bidding, I'm trying to evaluate the buying keywords. You know, needle in the hey stack. High CPC with high search and low competiton. (number of competitors is NOT an indication of competition strength. I don't even look at numbers for competition analyse.

I'm mostly curious why I see people paying huge fees so often on keywords that just happen to have low volume. If it was a brand name for their website, I could understand but usually it isn't.  I see this a lot, perhaps I'll go dig out an example or two. Looks like I need to.

[RustyF]

Here is an example. It seems to be of little value to rank for:

The word is "tool competition" and has a search volume for exact match is 46 and the CPC is over $17.

However when I google that term I saw no ads on my US or Philippines IP addresses. So I'm GUESSING that there are ads targeting a website of high value.  I know very little about AdWords.

Doesn't have much to do with SEO now that I think I figured it out.