Google AdWords & the Holy-Grail Cheap Keyword

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Google AdWords & Holy-Grail Cheap Keywords: Huhhh?

Hello all. Can someone explain this mystery?

For those of us who go from AdSense to the "other side" and use Google AdWords, the obvious goal is to find a high-clickthru, high-converting, super-cheap keyword or keyphrase.

From what I understand, even if you have a 100%-relevant, quality site and are the only bidder on a word or phrase, which logically should bring your bid as close as possible to one cent, you could still end up paying far more than you expect, AND seeing other advertisers' ads above yours.

I'm wading through all these diverse explanations online regarding this phenomenon, but can someone explain in plain English why this is so?

Thanks
--Guest1
 
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