A How-To Guide For Position Preference

AdWords advanced strategies
Defined:

The Google AdWords position preference tool “Lets you tell Google where you prefer your ad to show among all the AdWords ads on a given page.” Essentially you come up with ads for particular keywords and then decide where you prefer those ads to display and Google makes the adjustments needed in order to try to show your ad in that preferred position.

Benefits:
The interesting part about position preference is that it can be used to either keep your ads toward the top of the paid search results or keep your ads lower in the search results- it all depends on how you set your preferences. I know what some of you out there are thinking- “Who in their right mind would request that their ads be dropped in the paid search results rankings?” As you will see, there are good reasons for each strategy.

  1. Featured near the top of the paid search results
    Do you remember that game called “king of the mountain” that you played as a kid? If there was a mound or hill several people would run toward the top and the first one who got there would declare himself/herself “king of the mountain.” Then all the other kids would try to push the reigning “king” out of the way, and once dethroned, the newest person at the very top would declare that he/she was the new “king” and the game would go on and on until recess was over or your Mom called you inside. Essentially using position preference can be like waiting around to see when there is the best chance to make yourself the “king” and then running up in all your glory to assume your position as “king of the mountain.” In terms of your ads, Google will closely monitor the paid search listings and stick your ads in when there are the fewest ads competing, the bids are lower, etc. while working within your usage parameters (like daily budget). So say you have a max Cost Per Click (CPC) bid that would regularly get your ad shown about 200 times a day in perhaps the 5th position. If you set your position preference for the first or second position only, your ads may now only show up 60 times a day, but they will be in those much higher positions. Some advertisers may not see the value in this because it is, after all, fewer showings per day, but others would rather have their ads shown in a higher position when they are displayed because they feel the conversion is better or it helps their brand recognition.
  2. Featured lower in the paid search results
    While it is hard to wrap your head around- there are those that think the first position may not always be the best. Some large advertisers have done research to study the conversion rates from different positions for specific keywords, and what they found is that there is not much of a difference between say second and third. So what some companies will do is request that their ads be shown further down in the rankings. This way, you can easily target less expensive positions to get the maximum Return on Investment (ROI). Say the conversion rate is approximately the same between first and second and to be in the first place spot you have to pay $0.30 more than the second place spot. By requesting to be in second place you can save a small amount per click that really adds up over the course of the week, month, and year.

Whether you are using position preference to make sure your ad does not get lost in the many pages of paid search results for a very competitive keyword, or you are trying to maximize ROI, position preference is a powerful tool.

Rules:

  1. Set the Position Preference
    • Higher than (ex. higher than 4th position)
    • Lower than (ex. lower than 2nd position)
    • Range (ex. from 2nd-4th)
    • Exact (ex. 3rd)
  2. CPC will be Altered
    In order to show your ads where you request, your CPC will be changed to show it in the preferred spot. This means that if your maximum CPC bid is $1.00 but to show it in your preferred position it will only cost you $0.65/click, Google will change the value you pay to seat your ad in the listings in a particular spot.
  3. Not Guaranteed
    Keep in mind that you can set your position preference to be whatever you would like but that does not mean that your wishes will be honored. Say you want to use the keyword “cell phone” (which can cost an upwards of $4.00/click) and you put your position preference as a range of first position to third position and your maximum CPC is only $0.20/click; there is no way Google will be able to show your ad in those positions for that price because its rank (which is CPC bid multiplied by your quality score) will not be high enough, so your ads will not appear. Position preference is not guaranteed- it is suggested. Additionally, say you set your position preference as lower than fourth but you have a really unique keyword and there are only two other people using it as part of their AdWords campaign at that point in time. Your ad will have no other choice than to show as third despite your request that it be shown lower.
  4. Only Applies to the Search Network
    Your position preference only applies to the search network (it is independent of your content bids and placement targeted ads). This means that you can use this advanced technique of position preference for the search network portion of your campaign and also run ads on the content network on placed on particular websites without encountering any problems.

Constraints:
Unfortunately position preference, while highly effective for certain strategies, is not compatible with some of the tools that Google has in place to help you with your AdWords campaigns. Position preference does not work with:

  • The budget optimizer
  • Preferred CPC bidding

Let Volusion’s marketing team manage your campaign for you.

-Kate Pierce eCommerce Specialist

2 Responses to “A How-To Guide For Position Preference”

  1. Adword Ad Position Preference Bidding, and Why It | GottaQuirk

    […] not really new news, but last week I had the chance to use the Adwords position bidding preference tool in […]

    Reply
  2. Optimizing Your Pay-per-Click (PPC) Campaign – Part 2 : Social Reflections

    […] I have found spots that work for certain words then I utilize the placement bidding option in AdWords to lock in the position. Placement bidding automatically adjusts your bid price […]

    Reply

Leave a Reply