Since it tells you the est. clicks/day and cost per day, the volume *is* quantified, and you can see by calculating it out that the Est. Avg. CPC is just the cost/day divided by the number of est. clicks/day. So in other words, you can get the same information by looking at the CPC estimate since that number incorporates the volume information.
Right equation... weird way of arranging at it.
We want topics with
lots of
high paying ads, so we should look a number that incorporates both the CPC and the volume in a single number. That's the cost/day.
cost/day = volume*CPC
You're saying this, which is the same equation rearranged:
CPC = (cost/day)/volume
If you just look at CPC, you have no idea how profitable the keyword will be, because it tells you nothing about the volume. The volume could be anything, if it's offset by a different cost/day.
Basically, look at two keywords like mesothelioma lawyer and dvd burner. Now I'm making these numbers up, but let's say mesothelioma lawyer has $35.00 CPC and dvd burner has $5.00 CPC. So is mesothelioma lawyer that much better? No, it sucks. Because the search volume is pathetic... yet it still shows a high CPC. However, if you look at the total cost/day, you'll see some low number for mesothelioma lawyer but probably tens of thousands of dollars for DVD burner. So DVD burner will have way more searches and way more high-paying ads on the content network.
Your second point is right... all of this stuff is
very approximate and none of the numbers should be taken literally to indicate how much you'll make. But in general good numbers = good niche, even if you can't say from the numbers just
how good exactly.