OK I select that for 'widgets' I wish to be ranked between 1-3 but my bid, CTR etc can only get me into position 4 - will my listing only show if it's possible to show me 3rd or higher? Will I see a dip in impressions for 'widgets' as it's only going to be shown when the ad that was in 1st, 2nd or 3rd happens to goes offline? Thanks in advance.
you will see a bid dip in impressions and clicks when using position preference. What it will do is basically only show your ad, when your ad qualifies for that position. Using position preference will not give you any advantage to showing up in that position more often. This could also have a negative effect since assuming you say target me for position 3 but you qualify for position 2, your ad will still not be shown. What it will do is just eliminate all other possibilities except for the positions your specify.