From the 17th August, Google may optimise more consistently towards that £30 target. This gives Smart Bidding more freedom to enter auctions it may previously have avoided, provided it believes it can still achieve the target that has been set.
This could result in the campaign generating more enquires, but potentially at a higher average cost per enquiry. It doesn’t mean Google will deliberately increase the cost of every lead to £30 or automatically increase the campaigns budget. Google states that existing daily and monthly budget limits will continue to be respected.
The important question for businesses managing their own PPC campaigns is therefore whether the CPA or ROAS target they’ve given Google still reflects what they actually want to achieve.
So, if you manage your own Google Ads campaign, how do you know where your campaigns are affected, and what should you review before the 17th of august?
What is the Google Ads Smart Bidding update?
Google Ads Smart Bidding uses machine learning to optimise bids based on the goals and targets you set for your campaigns. From the 17th of August 2026, Google is changing how this works for certain campaigns that are limited by budget and use Target CPA or Target ROAS bidding.
Currently, some budget-constrained campaigns can outperform their stated targets. For example, a campaign may consistently achieve a lower CPA or higher ROAST than the target set by you.
Following the update, Google will place greater emphasis on optimising towards the target you have set, even when a campaign is limited by budget or its budget is subsequently changed Google says the aim is to make performance more predictable when advertisers adjust budgets.
Importantly, the update won’t automatically change your campaign budgets or bidding targets. You’ll still be responsible for setting these based on your business goals, which makes it important to understand whether the targets currently in your account reflect the results you actually want Google to work towards.
Which campaigns are affected by the update?
The update will affect campaigns that meet both of the following conditions:
- They are marked as limited by budget
- They use target CPA or target ROAS automated bidding
In terms of campaign types, affected ones include:
- Search
- Shopping
- Performance Max
- Demand Gen
Campaigns that aren’t budget constrained aren’t affected by this change. Similarly, strategies such as manual CPC and Target Impression Share aren’t part of this update. Campaigns using target CPA or target ROAS but with healthy and unconstrained budgets are also unaffected.
Why is Google making this change?
Google says the change is designed to make campaign performance more predictable, especially when advertisers adjust their budgets.
Previously, increasing the budget of a budget-constrained campaign that was outperforming its target could sometimes leave to fluctuations in performance. The update is intended to create a more predicable relationship between the budget available and the CPA and ROAS target you’ve set.
For businesses looking to scale their Google Ads campaigns, this could make the impact of budget changes easier to anticipate. However, campaigns that have consistently outperformed their targets may see some of that additional efficiency reduce.
You can read Google’s official announcement here.
What should you do before the 17th of August?
The most important thing is not to make immediate changes to your bidding targets simply because an update is coming. Instead, use the time before the 17th of August to understand your current performance, identify the campaigns you need to monitor and make sure targets you’ve set still reflect your business goals.
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Identify the campaigns you need to monitor
Start by reviewing your Google Ads accounts for campaigns that are limited by budget and use Target CPA or Target ROAS bidding.
Pay particular attention to campaigns where your actual CPA has consistently been lower than your Target CPA, or your actual ROAS has been higher than your Target ROAS. These are the campaigns where you may be more likely to notice a change in performance following the update.
Don’t assume that every affected campaign needs adjusting, at this stage, the aim is simply to identify which campaigns you should be keeping a closer eye on.
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Record your current campaign performance
Before the update takes effect, establish a clear benchmark for the campaigns you’ve identified. This will give you something meaningful to compare your results against once the changes begin to roll out.
Record key performance metrics including:
- Daily and monthly spend
- Conversion volume
- Actual and target CPA
- Actual and target ROAS
- Conversion value
When reviewing performance after the update, avoid looking at these figures in isolation. Seasonality, conversion delays and normal day-to-day fluctuations can all influence results, so a short-term change doesn’t necessarily mean the smart bidding update is responsible.
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Compare your targets with actual performance
Look at the relationship between the targets you’ve set and what your campaigns have historically achieved.
If your actual CPA has consistently been considerably lower than your target CPA, consider whether the target you’ve set still reflects what you’re genuinely prepared to pay for a conversion. Similarly, if your actual ROAS has consistently been higher than your Target ROAS, consider whether your current target sill reflects the return your business needs to achieve.
That doesn’t necessarily mean you should immediately change your targets. A lower CPA or higher ROAS isn’t automatically better if achieving it restricts the number of profitable conversions your campaign can generate.
The right target should reflect what makes commercial sense for your business taking into account factors such as margins, lead or customer value and your wider growth objectives.
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Avoid making dramatic changes without evidence
If your review suggests that your CPA or ROAS target needs adjusting, make changes gradually rather than dramatically. Avoid changing your targets, budgets and other campaign settings at the same time. If performance subsequently changes, you’ll have a much harder time identifying what caused it.
Instead, establish your benchmark, make measured adjustments where necessary and monitor the results. You can always adjust targets later if your business requirements change.
What could this mean for your campaign performance?
The biggest potential impact is on campaigns that have been limited by budget while consistently outperforming their stated target. Following the update, these campaigns may start to perform more closely to the Target CPA or Target ROAS you’ve set.
In practice, you could see:
A higher average CPA
A lower ROAS
An Increase or change in conversion volume
Changes in how your available budget is used
For example, a campaign that has historically generated conversions well below its target CPA may begin entering more auctions. This could increase the number of conversions it generates, while also bringing the average CPA closer to the target you’ve set.
However, the update does not mean Google will automatically increase your spend beyond your budget, Google says your daily and monthly budget limit will still be respected. What may change is how that budget is allocated.
For multi-channel campaigns, such as Performance Max and Demand Gen, you may see a shift in how traffic is distributed across different channels.
Rather than reacting to short-term fluctuations after the 17th of August, compare your results against the performance benchmark you recorded before the update this should give you a clearer picture of where there has been a meaningful change to your campaign performance.
The key takeaway from this update is to make sure the target you’ve set is actually the target you want Google to optimise towards.
How our PPC marketing agency can support you through the latest Google ads update
Changes to Google ads bidding can have a significant impact on campaign performance, particularly when you’re managing multiple campaigns with different budgets, targets and objectives.
As a performance-focused paid search marketing agency, we design and manage targeted campaigns that help brands reach the right people at the right time. Our experienced PPC specialists create data-driven campaigns that increase traffic to your website, generate more leads or drive sales, all tailored to your commercial goals. We also look at the overall performance of your account, helping you understand what the data is telling you and where changes may be needed.
If you’re unsure whether your campaigns will be affected by Google’s smart bidding update, get in touch with our PPC experts for an initial consultation. We can help you identify potentially affected campaigns, review your current targets and establish what you should be monitoring as the change rolls out.
