A note from AdWords regarding your site-targeting concerns

When we launched site-targeting in June, we created a new way for AdWords advertisers and AdSense publishers to benefit from each other. Advertisers use the Site Tool, a site-targeting feature, to choose specific sites from the Google content network on which to place their ads. This makes it possible for advertisers to spend more of their marketing budgets on specific sites. For publishers, it's a great way to increase coverage and eCPMs.

Many publishers have asked why we decided to lower the minimum CPM bid required for advertisers to run site-targeted campaigns. As you know, we're constantly working to improve the experience for our users, advertisers and publishers. To this end, the lowered minimum CPM for site-targeted ads allows advertisers to more accurately price their ad placements on a wider variety of sites.

Sounds like a bad deal for publishers, right? It's not. By lowering the minimum CPM we've increased adoption of the product and competition for placements on your site(s). This leads to higher payouts and better coverage. Remember, CPC and CPM ads compete against each other to display on your site, and we'll only show the ads with the highest eCPM. So you can be assured that increased competition will only help you improve monetization of your site.

Posted by Sarah - AdWords Advertiser Support