Well, I think part of it is your the area...The most expensive words I've seen have been a few dollars. I haven't done PPC for a long time now, I recently created a website for my fiancee so I'm going to get back into it to help her site.
I used to just search the keywords on yahoo and find the words that don't generate as much traffic but costs a lot less. I mean if a $5 keword gets you 1000 hits a month and a $0.25 keyword gets you 100 hits and you find 10 of those you paid half the price for the same amount of hits
However, I am not the most savvy person with this and I am learning more. I've had some pretty good people helping me but I'm also looking into SEO companies but if you know a little more about this maybe you could explain to me exactly how SEO companies work.