Starting August 17, 2026, Google is fundamentally changing how budget-limited campaigns behave when using target-based bid strategies. This update affects Search, Shopping, Performance Max and Demand Gen campaigns running Target CPA or Target ROAS. If you do not prepare, your costs may increase significantly.
- From August 17, 2026, budget-limited campaigns will perform closer to your set target (Target CPA/ROAS) rather than outperforming it.
- If you have campaigns that currently perform well below your target, this "bonus performance" will end.
- Your targets will not be adjusted automatically, but you need to update them to match actual performance if you want to maintain current results.
- If you take no action, costs per conversion may rise toward your set target when you increase budgets.
What is changing?
Google is updating its bidding systems to deliver more predictable campaign performance. This change specifically affects campaigns that use a target-based bid strategy (Target CPA, Target ROAS) and are operating under a budget limitation.
The core change in one sentence: budget-limited campaigns will perform closer to your target rather than significantly outperforming it.
How it works today
In the current system, budget-limited campaigns often perform well below (i.e. better than) your set target. For example, if your Target CPA is $10, your actual CPA might be around $5. While this looks positive at first glance, it creates two significant problems:
- Misleading target perception: If your target is $10 but you are getting conversions at $5, what is your real target? The system follows its own optimisation dynamics, not the target you set.
- Unpredictable budget increases: When you increase your budget, it is hard to predict how performance will change. You are happy with $5 CPA and increase the budget, but the new budget might push CPA to $8. The "bonus performance" can disappear with budget increases.
How it will work after August 17
In the new system, budget-limited campaigns will approach your target more consistently. This is a two-sided change:
Concrete example
Say your campaign's Target CPA is $10 and your recent actual CPA performance is $5.
- Today's behaviour: The system only captures the cheapest conversions due to the budget limit; CPA stays well below your target ($5).
- After August 17: The system will bid to approach your target ($10). If you make no changes, your CPA could rise from $5 toward $10.
Critical point: If you are satisfied with your current performance ($5 CPA), you need to update your target to $5. If you do not change your target, the system will use $10 as its reference.
The upside
When you increase your budget, you will know what to expect. If your target is $5 CPA, a budget increase should deliver approximately $5 CPA. The "performance degraded after budget increase" surprise disappears. This is a significant improvement, particularly for brands planning to scale.
Who is affected?
This change affects campaigns that meet all of the following conditions:
- Campaign type: Search, Shopping, Performance Max or Demand Gen
- Bid strategy: Target CPA or Target ROAS (target-based)
- Budget status: Showing "Limited by budget" warning
If your campaign uses Maximize Conversions or Maximize Conversion Value (without a target), you are not affected. Similarly, campaigns that are not budget-limited are outside the scope.
Which campaigns are at risk?
The greatest risk lies in campaigns with this profile:
- Target CPA/ROAS set high (loosely) while actual performance is much better
- Budget-limited campaigns where the target has never been reviewed because "it's working fine anyway"
- Campaigns planning budget increases but have not yet updated their targets
What should you do now?
You have approximately 6 weeks until August 17. Complete the following steps in that time:
1. Identify your budget-limited campaigns
Go to the Campaigns tab in Google Ads. List campaigns showing the "Limited by budget" warning in the campaign status column. Filter for only those using Target CPA or Target ROAS.
2. Compare actual performance against targets
For each campaign, check the actual CPA or ROAS over the last 30-60 days. Compare this with your current target. If the actual CPA is significantly lower than your target (e.g. target $10, actual $5.50), this campaign is at risk.
3. Update targets to match actual performance
If you are satisfied with your current performance, pull your target down to the actual performance value. In the example above, you would reduce your target from $10 to $5.50. Caution: setting the target too aggressively (below actual performance) may cause traffic loss. Keep it at or slightly above the actual value.
4. Review your budget increase plans
If you are planning budget increases in the coming period, performance predictions will now be more reliable. But first, make sure your target is correct. Correct target + budget increase = more conversions at the same cost. Wrong target + budget increase = same conversions at higher cost.
5. Check portfolio bid strategies
If you manage multiple campaigns under a single portfolio bid strategy, review the budget status and actual performance of each campaign individually. A portfolio-level target can mask individual campaign performance.
Want to prepare your campaigns for this change?
We will review your Google Ads account free of charge and report on the target updates needed before August 17.
Request Free Analysis →Frequently asked questions
What happens if I do not change my targets?
Your campaign will start bidding to approach your set target (Target CPA/ROAS). If your current target is higher than your actual performance (e.g. target CPA $10, actual CPA $5), your costs will increase. You need to update your target to maintain current performance.
Will Google automatically change my targets?
No. Google is changing bidding behaviour with this update, not touching your targets. Target updates are entirely your responsibility.
Does this change affect all campaign types?
Only Search, Shopping, Performance Max and Demand Gen campaigns are affected. Display campaigns are currently out of scope. Additionally, only target-based strategies (Target CPA, Target ROAS) are affected; Maximize Conversions and Maximize Conversion Value (without a target) are not.
Is there any change for campaigns that are not budget-limited?
No. This update only covers campaigns in the "Limited by budget" state. If your budget meets the campaign's needs, there will be no difference in bidding behaviour.
Does this change affect the choice between Target CPA and Target ROAS?
No. The change applies equally to both target-based strategies. The fundamental difference between Target CPA and Target ROAS remains: CPA controls cost per conversion, ROAS controls return on ad spend ratio.
Do I need to take additional action for Performance Max campaigns?
Yes, the same rules apply. If your Performance Max campaign is budget-limited and uses a target-based strategy, review your targets against actual performance. To see actual performance in PMax campaigns, use the "Cost per conversion" or "Conversion value / cost" columns in campaign reports.
