As of now the Google AdWords API does not support Position Preference and the option will be retired completely by early May, Inside Adwords reported. And Hal Varian, Google’s chief economist, said people are too focused on position when they should be tracking conversion.
“What matters is how the keyword performs in terms of clicks and cost, not where it ends up on the page,” he noted, and that most people thought the position reported was on page position when in fact it was auction position and bid amount influenced if it was at top or to the left.
Google recommends reading their economist’s article and “if you’d still like to target specific ad positions, we recommend that you try using automated rules. Using this feature, you can set an automated rule for your campaign that will change your bid if your average position differs from your target. For more information on how to use this feature, please see this article.”
His best example and reason you need to go as granular as you can in your campaigns anf ad groups is:
“When you increase your bid, your ad will generally show up on the first page in more auctions, particularly when using broad match. Since you weren’t bidding enough to appear in those auctions originally, your ad will tend to come in at the bottom of the first page in those new auctions.
For example, think of a situation where you’re bidding on vegan dog food (broad match), and your ad consistently appears at auction position 1 when the user enters vegan dog food, but your bid is too low for the ad to show (on the first page) when the user enters dog food. Now you increase your bid and start showing up in auction position 7 for dog food queries. If there are the same number of queries for dog food and vegan dog food, your average position will be (1+7)/2 = 4. So by increasing your bid, you’ve moved your average position metric from 1 to 4–even though your ad never appeared in position 4!”
When you first learn this your perspective changes. Concentrate on conversions and use a filter to know which actual keywords are used to activate your bidded keyword. Negatives and exact match terms can be learned this way and further improve conversions.