A Deeper Dive into Google AdWords’ Position Preference

PPC bidding strategies come in many shapes and sizes. Manual CPC bidding is what most people use; other options include CPA and CPM bidding.

Google AdWords also offers Position Preference bidding. If you want your ads to appear in a specific position, or range of positions, Google can adjust your maximum CPC bid to do just that. Let’s go over why position preference is useful, how to set it up and how to avoid missing click and conversion opportunities when running position preference.

Why Use Position Preference?

With all of the bidding options available, why would anyone want to use position preference? Well, there are a few good reasons:

  • Over time, it frequently becomes apparent that some keywords convert best in a specific position. Position preference can aid in ranking your keywords in positions that are most cost-effective. (One caveat: if you use automated bid management, then ROAS or CPA bid rules would be more effective than position preference bidding.)
  • Brand advertisers often seek to dominate the top ad positions for their branded keywords, and can use position preference bidding to force their ads into the #1 spot.

Setting Up Position Preference Bidding

The position preference bidding option is turned on and off at the campaign level. Note, however, that control over position preference is managed at the keyword level!

Go to your campaign settings and find the “Bidding and Budget” section. Position preference is a plus box – click the “On” option:

AdWords Position Preference Settings

With position preference turned on for your campaign, you can move on to selecting specific keywords within any ad group in that campaign. Since position preference automatically uses your maximum CPC bid, you only need to select the position range in which you want your ad to appear. Go to the Keywords tab in your campaign and you will see a new column labeled Pos. Pre. Your keywords will be listed as “Any” in this new column until you update the Position Preference setting. Click on “Any” and you will see a yellow box appear with two drop down boxes to choose your position range. Click “Save” to apply the change to your keyword:

Edit Position Preference at Keyword Level

How Does Position Preference Bidding Work?

Here’s Google’s explanation:

Position preference helps you achieve your desired ad position in two ways. First, it attempts to show your ad only when its Ad Rank (maximum CPC x Quality Score) has placed it in the positions you select. Second, if the Ad Rank places the ad in a higher spot, position preference will discount your maximum CPC bid to move the ad into your desired range.

There are some very important things being said in those 3 sentences. Let me break it down.

  • Your ad will only show in the specified position range if its Ad Rank has already placed it in the position range you specify. So for example, if you set a position preference of 2-4 and your Ad Rank is low enough that your ads are normally displayed no higher than position 5 – your ad will not show.
  • If Ad Rank places your ad higher than your specified position range, AdWords will automatically adjust your bid to rank you lower. This is important to note sinces it is a signal from Google regarding position preference strategy. So set your position preference, but aim your bids high to ensure you hit the mark.

So if you are using position preference and not monitoring your performance carefully, there is a significant chance that you are missing out on potential impressions, clicks and conversions. Because of the risk of missed opportunities, advertisers who want to display their ads to every potential customer should use position preference at their own risk. If position preference is a tactic you want to use I recommend brushing up on your Quality Score improvement strategies and ensure that your Ad Rank is always high enough to rank you in your preferred position!

Have a question about position preference or want to add to this post? Leave me a comment!