AdWords Announces Preferred Bidding Feature

A new feature at Google AdWords has just been released globally, and will be known as 'preferred cost bidding' or 'preferred CPC bids'. This new feature allows advertisers to specify the average cost per click or CPM (cost per thousand impressions) they want to pay within their AdWords campaigns.

Google says the feature was added in response to "advertiser demand for greater control over how they manage their bids and costs", and expects that advertisers will be better able to maximize ROI.

The AdWords algorithm will work constantly to achieve the target price set by the advertiser. The average price model is designed as an alternative to the existing maximum bid system, which often forces advertisers to pay more up front, based on the competition, and aim for an average cost per conversion instead.

By agreeing to an average cost per click or impression, advertisers should be able to feel more confident in their CPA targets. However, this could potentially mean advertisers will have slightly less control over positioning, which may also affect conversion rates.

Only time and testing will tell for many advertisers.

About the author

Elisabeth Osmeloski has been in the search engine marketing industry since 1999, with agency experience as an SEO consultant and web copywriter for a variety of clients, ranging from small businesses to large corporations, as well as working in-house for a travel search industry startup. Elisabeth is also a regular speaker and a moderator at the Search Engine Strategies conferences.

Elisabeth recently launched a new blog and consulting agency, Adventures in Search, specializing in editorial services including content strategy, SEO copywriting, community development and management, social media marketing, online PR and customized link building. Elisabeth's areas of expertise include adventure travel services, destination and tourism marketing, outdoor recreation and action sports, as well as luxury- and lifestyle-focused brands.

She holds a B.A. in Marketing from the Isenberg School of Management at the University of Massachusetts-Amherst. She also spent several years as the Skiing Editor for About.com, and still enjoys writing as an active travel journalist whenever possible. In addition to freelance travel writing assignments, Elisabeth has also created Downhill Divas, a social network for women interested in skiing, snowboarding, freeride mountain biking and living a healthy, active lifestyle.