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I set it up with a not-very-common phrase and I set the bid at 1 cent cuz I figured I wouldn't have to bid more. I wait 24 hours and my ad is still not showing up. Then I check it out and it says "you must increase your bid to 20 cents to activate." Why 20 cents? Because they decided to be greedy, not because I need to outbid other people. Google's founder said they have a "don't be evil" policy. I believed they were following this policy until now. I went ahead and raised the bid to 20 cents just to see what would happen. Now my ad is showing up. I don't know if it's going to be worth it at this rate. If only 1 out of every 100 people who click buy a t-shirt, that's not going to be worth it. That would be $20 to sell 1 t-shirt.
 

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[Please keep in mind that we do not allow "company bashing" on this forum - try to refrain from comments like "company X is a ripoff"]

Back to the topic of your post, adwords always had a minimum bid price of .05 cents (overture is double that).

They recently changed it (about 2 weeks ago) so that the system uses a variable pricing system. I don't think you'll get charged .20 cents for a click if you're the only one advertising for that term...I think that's just the maximum you will pay.

The best thing you can do is just test it. It all boils down to the numbers and getting a return on your investment.

If you are targeting a very specific keyword (or keywords) and your landing page goes directly to the page where you have that t-shirt for sale (that relates to the keyword you're bidding on), you should have a MUCH higher conversion ratio than 1 sale per 100 clicks.

People clicking on that link should already be interested in your shirt for sale (if you make it clear in your ad that you're selling a t-shirt related to that keyword).

If they are already that targeted, you shouldn't waste 100 clicks to find out if the ad is working. You should set your maximum budget for the keyord at $5.00 or something and see how many sales you get for that $5. If you aren't getting any, then you can probably be sure that the keyword isn't going to covert for you without wasting $20.
 
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