Even though the new tool was presented by Google to only a small number of AdWords accounts, it does offer an interesting concept that might save advertisers a kuna/euro here and there when testing costs and the effects of ad positions on the cost of a click.
When using data from the previous 7 days, the bid simulator calculates what would happen if cost is set differently from the actual cost for your keywords (or ad group).
Put more simply, the Bid Simulator should answer questions such as “How many clicks would I have received had I placed a different maximum CPC bid” or “What would be the position of the ad had I placed a different bid price”.
We’ll have to wait and see whether this tool will be released to the public, and how precise the simulation data is…