What You Need to Know About Google's Decision to End Preferred Cost Bidding

Google AdWords is often testing new features within our pay-per-click accounts. Some of them work great and some of them don’t. With an organic program like AdWords, this kind of testing is to be expected. Google recently announced that on January 26, 2009 preferred cost bidding within AdWords will no longer be available.

Currently, preferred cost bidding is still available in existing campaigns where it has already been selected. But you can not longer choose this option for campaigns that are not utilizing it, and you can’t choose this option for new campaigns. On January 26th, preferred cost bidding will disappear completely, and all existing campaigns still using it will have to switch to different bidding formats.

If you are not using this preferred cost bidding within your campaigns, then this change does not affect you.

If you are using preferred cost bidding, you should begin to manually alter your campaigns in order to switch them to standard CPC bids. On January 26th, any campaigns that are still using preferred cost  bidding will switch automatically to manual bidding. Your campaign’s current bid values, as set by preferred cost bidding, will be converted to Max CPC or Max CPM bids instead. From then on you’ll need to change your bids manually; the system will stop updating your bids to reach your average CPC or average CPM goals.

Google AdWords is ending preferred cost bidding because only a small fraction of AdWords users have taken advantage of this bidding option. And according to Google (to quote), they have found that having too many options can be as confusing and frustrating to users as having too few. Also, every separate bidding option adds significant complexity to the AdWords code. Removing a lightly-used option will help us keep AdWords as simple, fast, and flexible as possible for everyone.

That is one thing I’ll give to Google AdWords, they are successful at keeping their interface simple and clean, but robust with a plethora of reporting options and good sense of visibility. I lookforward to the next test!