...if it checked frequently seems like it might flood the mailbox receiving the notices rather quickly. AdWords listings seem to jump around within a certain range very frequently especially if there are lots of ads running on a given keyword.
Quite true. Depending on a variety of factors, an ad's position can easily change from one search to the next. And for a keywords that may get thousands of impressions per day, that is a lot of emails!
It might be a worthwhile option, however, to have a system that notifies you if you are outside a certain range that you could select.
In any case, I'll pass your feedback on, gfguy, as a brainstorming idea. Who knows what other ideas may evolve?
AWA
For example an email is generated whenever 30% of the time we are number 2.
I should be able to set the percentage so as to reduce the number of notifications.