From 17 August 2026, Google is changing how some of its target-based bidding strategies work.
The update is intended to provide more consistent and predictable results for campaigns that are limited by budget, particularly when advertisers adjust their campaign budgets.
That may sound fairly straightforward. After all, you would expect a campaign with a target to work towards that target already. However, some campaigns are currently performing considerably better than the targets they have been given.
Once the update takes effect, Google will begin treating those targets more literally. If your campaigns are affected, the figures currently entered in your account could therefore have a much greater influence on performance.
As a Google Premier Partner, we worked closely with Google to understand how this change to bidding structures will affect campaign performance and management in practice.
The update applies specifically to campaigns that:
Target CPA tells Google how much you are willing to pay, on average, for a conversion. Target ROAS tells it how much revenue you want to generate for every pound spent on advertising.
At the moment, some budget-limited campaigns perform more efficiently than the target they have been set.
For example, imagine you have a campaign with a Target ROAS of 500%, meaning you want to generate £5 in revenue for every £1 spent, but the campaign is currently achieving a ROAS of 600%.
Following the update, Google will work more consistently towards the 500% target entered in the campaign, and if nothing is changed, its ROAS may begin to move closer to 500%.
This does not necessarily mean the campaign will perform poorly. A 500% ROAS is still the target you asked Google to achieve. However, if the business has become accustomed to achieving 600%, the difference could be significant.
Currently, when a campaign is limited by budget, Google knows it cannot pursue every available opportunity.
As a result, its bidding system may focus on the cheapest or most efficient conversions it can find within the available daily budget. This can lead to the campaign performing better than its stated CPA or ROAS target.
The difficulty often appears when the budget is increased.
An advertiser may see the strong performance and raise the campaign budget to generate more sales. Once Google has more money to work with, it can enter a wider range of auctions. Performance may then fluctuate because those additional conversions are not always available at the same level of efficiency.
Google’s update is intended to create a more stable relationship between the target you set and the results the campaign delivers, even when the budget changes. In theory, this should make it easier to scale campaigns with a clearer idea of the performance you can expect.
The change applies to budget-limited campaigns using affected target-based bidding strategies across:
Display and Hotel campaigns already use the newer bidding behaviour.
Campaigns that are not limited by budget will not be affected by this update. App campaigns, Video Reach campaigns and Video View campaigns will also continue using the existing behaviour.
It is important to check the campaign’s actual status in Google Ads. A budget recommendation is not necessarily the same as a campaign being officially marked Limited by budget.
The first step is to identify campaigns that are limited by budget and use Target CPA or Target ROAS.
For each affected campaign, compare the target entered in Google Ads with the performance it is currently achieving. You can then decide which of the following situations applies.
If the target entered in the campaign is still commercially appropriate, you may not need to change it.
Be aware that if the campaign is currently outperforming that target, its results could move closer to the figure you have set after 17 August.
Like the example we mentioned earlier, a campaign achieving 600% ROAS against a 500% target may begin performing closer to 500%. If 500% remains profitable and aligns with your business goals, that may be completely acceptable.
The benefit is that you may then be able to increase the campaign budget and pursue more conversion value at that target with greater predictability.
If the campaign is outperforming its target and you want to preserve that level of efficiency, the target should be updated to reflect its recent performance.
So using the example again, that could mean changing the Target ROAS from 500% to 600%.
The same principle applies to Target CPA. If a campaign has a Target CPA of £20 but is consistently acquiring conversions for £15, you may need to change the target to £15 if you want Google to continue working towards that level.
You do not have to choose between the existing target and the campaign’s current performance.
If a campaign has a Target CPA of £20 but is achieving £15, you may decide that £17 represents the right balance between efficiency, profitability and growth.
The important thing is that the target should be based on what works for the business, rather than simply copying a historical figure or accepting Google’s recommendation without reviewing it.
GOOGLE WILL NOT MAKE THESE CHANGES FOR YOU
Google has introduced a Bid Target Adjustment Tool to help advertisers review recent campaign performance and update their targets. However, Google will not automatically change your bid targets or campaign budgets.
That means you need to review affected campaigns and decide what you want the bidding system to prioritise.
Changes to automated bidding can influence spend, conversion volume and profitability, so targets should always be considered alongside margins, average order values, conversion delays and wider commercial goals.
To wrap it all up
This update should eventually make budget changes more predictable, but there may still be some short-term movement while affected campaigns adjust to the new bidding behaviour.
Because the change is rolling out widely at the same time, performance after the 17th won’t just depend on the changes you make within your own account. Competitor activity may also influence how campaigns respond, so it’s important to keep a close eye on performance in the weeks that follow.
We’d recommend being proactive ahead of the rollout, but also prepared to react once the change is live. Monitor profitability, watch for any unexpected shifts in performance and be ready to adjust your strategy if campaigns aren’t responding as expected.
Our PPC team is working closely with our Google points of contact to review impacted campaigns ahead of the rollout, checking that targets accurately reflect each client’s current performance and wider business objectives.
If you manage Google Ads in-house, now is the time to check which campaigns are limited by budget, compare their targets with their actual results and decide whether those targets still make sense.
If you’d rather have an experienced team review your campaigns and manage the transition, get in touch. We can help you understand where the risks and opportunities sit within your account and make sure your bidding targets support what your business is actually trying to achieve.