If you advertise with Adwords, you've used their traffic and cost estimator among other resources provided by Google. You use these tools to gauge budget recommendations for your own business as well as your clients. I know that this information will never be completely accurate, but it should at least be somewhat consistent.

I was recently researching the debt consolidation vertical in order to create an analysis for a client. Obviously, this is a highly competitive vertical, and the strategies used during the campaigns should be well thought out and backed by data.

You can see from the images below that a $2 max CPC put me in positions 1 - 3, with only one term in position 4 - 6.
If I increase my max CPC to $6, I'll be paying about three times the amount per click, but now most of my ads will be served in positions 4 - 6.
In order get my positions back up to 1 - 3, I would have to increase my max CPC to $12.

So what's the lesson here? I'm better off paying $2.00 per click? Or does this tool have some type of foreign influenza? How am I supposed to estimate what my average CPC will be? I need a beer.....

I've also had similar inconsistencies with the Adwords Budget Analyzer, but we'll touch on this later.