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6th April 2011 |  Written by Ben Reed

Google Adwords – Yet another change to make more money for themselves

Recently Google announced the retirement of the position preference feature within Google AdWords – official launch here.

Before I start my rant, let me clear a few things up.

Do you even use position preference?
I have tried it out on a few client accounts but I have been using it heavily for one particular client for the past 6 months.

Does it even work?
This depends on a lot of things such as your business model, profit margins, industry and market competition.

If you set your position preference for example to be 3 to 10, this doesn’t mean your ad will never appear in positions 1 or 2. This upper limit cannot be guaranteed however through months of testing I have hard data that shows the position preference feature does manage your max CPC’s sufficiently to limit your average ad position much closer to your target compared without running this feature.

OK, now for the rant…

The removal of this feature isn’t anything to do with benefiting the typical AdWords user. It is purely another way of Google making more profit, which is fine if you are a Google shareholder but not if you are an advertiser.

I can share some figures with you that shows you the effect of position preferencing on one of my client’s figures.

With position preference turned on – positions 2 to 10 (Max CPC set at £0.50)

Average position – 2.2
Average CPC – £0.37
CTR – 4.15%
Conversion rate – 1.43%
Cost per conversion – £25.87

Without position preference (Max CPC set at £0.50)

Average position – 1.3
Average CPC – £0.48
CTR – 8.24%
Conversion rate – 0.98%
Cost per conversion – £48.98

It doesn’t take a genius to work out which figures work out best for this client.

Running the position preference feature provides far more profit per sale and given the reduction in average CPC, far more clicks for their budget.

Managing individual CPC’s manually to achieve the same results would take up a lot more bid management time.

 

 

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