Google Lets Advertisers Set Average Budgets

Responding to requests from Google AdWords customers for more options in how they manage their bidding, Google is updating its system to include preferred per-click and per-impression costs by specifying what they’d like to spend on average. The feature will be offered in addition to AdWords’ standard “maximum allowable cost” option.

In the past AdWords users had to specify the maximum cost they were willing to pay for cost-per-click (CPC) or cost-per-thousand (CPM) advertising. As customers did so, Google realized many were forced to repeatedly return to the application to adjust bids to reach some premium placements and maintain an average cost, according to Guemmy Kim, product manager for Google AdWords.

“This preferred cost bidding will do that automatically for them,” Kim said. “Google always tries to listen to what our customers want, and it’s something that has been brought up specifically. Advertisers desired this kind of control.”

Kim also believes that by providing the option of preferred CPC and CPM bids to maintain a cost average, advertising agencies will no longer have the extra burden of monitoring AdWords bids for their clients across all types of ad formats.

“This is huge for a lot of agencies. They were spending a lot of time for their own clients to manage these costs,” Kim said.

While the new feature will appeal to some, some search marketing experts will prefer to keep a greater level of control in ad placements, according to Kevin Lee, co-founder and executive chairman of search marketing firm Did-it.com and a ClickZ columnist.

“Smaller, less-sophisticated self-serve advertisers will prefer the simplicity of the new system, but most large, sophisticated advertiser will likely want to stay with a highly controlled system that doesn’t rely on black-box averages,” said Lee. “Our clients and many more sophisticated advertisers have found that some clicks are worth paying dramatically more for, and other clicks are not nearly as valuable.”

Google has been busy updating its ad serving repertoire, most recently through a planned acquisition of DoubleClick and accelerated movement into offline advertising networks. The preferred cost bidding feature will be fully available by the end of next week, the company said.

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