Yesterday Google announced the availability of "preferred cost bidding".  We talked about a few of the details yesterday, but in case you missed it, here's how it works:

This is a great move for Google.  I think it will greatly increase their RPC (revenue per click).  It should be good for AdSense users, too.  They'll be making more money because each click will be worth more.

But as an advertiser, I'd never use it.  Never ever.

For example, say my maximum bid is $1.  But I'm usually not paying $1… I'm usually paying closer to 0.60.  If I tell Google that my preferred cost is $1, which it will need to be to stay competitive, I'm suddenly paying 0.40 more.

Good for Google.  Good for AdSense users.  Baaaad for advertisers.

- Matt