The first rule of keyword bid wars, like knife fights, is: don't get in one. You can expend all your PPC bid management energy in a bidding war over the #1 keyword on, say, FindWhat, when you could have been placing a pay per click bid on Overture for the #9 keyword, a targeted keyword for your business.
Keyword bidding wars will upset your keyword bid management strategy. Bid management software can close bid gaps, but you need to budget for the bid gaps and determine how much loss you can comfortably eat. You need to base your pay per click bid management strategy on your overall business and marketing objectives, and especially your Internet marketing objectives.
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