On June 22, Google Ads announced a change to how Smart Bidding handles budget-limited Target CPA and Target ROAS campaigns. Starting August 17, 2026, those campaigns will stop quietly beating their targets and start delivering much closer to the number you actually typed in. If your account has been running "limited by budget" campaigns that look great in the dashboard, this is worth twenty minutes of your time before that date.
What Google actually announced
The change is narrow and specific. It only affects campaigns with a "Limited by budget" status that use Target CPA, Target ROAS, or, for Demand Gen, Target CPC. It applies across Search, Shopping, Performance Max, Demand Gen and Travel campaigns run through Google Ads or Search Ads 360, plus Demand Gen through Display & Video 360. Display and Hotel campaigns already use the new behaviour. App campaigns, Video reach and Video view campaigns are excluded entirely, and manual CPC and Target Impression Share are untouched.
Google's own example, published on its help page, is the clearest way to understand it: if your Target CPA is set at $10 but your actual recent performance is $5, that campaign has been overachieving. After August 17, it will drift toward the $10 you set, not stay at $5. Nothing about your creative, audience or offer changes. The bidding system just stops letting budget-limited campaigns quietly outperform the number you gave it.
Why this is happening
Google's explanation, confirmed by Ads Liaison Ginny Marvin in public replies reported by Search Engine Journal on July 8, is that this fluctuation has made budget increases unpredictable. Raise the budget on a campaign that's been overperforming its target, and CPA or ROAS can swing hard in either direction, because the system was never really trying to hit your number. It was chasing the most efficient auctions it could find within the spend cap. Google says the goal now is consistency: set a target, and the system holds closer to it whether your budget stays flat or you scale it.
That explanation did not land quietly. PPC practitioners questioned it openly on LinkedIn, and Marvin's own responses in that thread are part of the public record on this change, which is unusual for a platform update. Worth noting for anyone deciding how much weight to give this: Google is not claiming this makes bidding smarter or dumber, only more literal about the target you set.
What this does not mean
Three things Google has explicitly ruled out, per its FAQ page. Your daily and monthly budget caps will still be respected, this is not a backdoor to higher spend. Google will not automatically change your targets or your budgets, whatever happens on August 17 happens because your settings stayed the same. And campaigns that are not budget-constrained, meaning Smart Bidding already has enough spend room to hit your target freely, will not be affected at all. If none of your target-based campaigns are marked "Limited by budget," this update mostly passes you by.
What to actually check before August 17
Start by pulling every campaign using Target CPA, Target ROAS or Demand Gen Target CPC that currently shows "Limited by budget." Google has been rolling out a Bid Target Adjustment Tool inside Ads accounts since July 6 that surfaces these campaigns and their recent actual performance against target, along with a one-click way to update the target. If you have not seen the in-account notification, check under Recommendations.
For each flagged campaign, ask one question: is the current target still the number I want, or was I relying on the campaign beating it? If your Target CPA is $35 but you have actually been landing $20, you have a decision to make. Update the target to $20 or somewhere close to it if you want to keep today's efficiency. Leave it at $35 if you are comfortable with performance drifting toward that number after the rollout, freeing up room to scale spend at a higher but still acceptable cost. There is no wrong answer here, only an uninformed one, which is what happens if you skip this step.
If your account runs Performance Max or Demand Gen, also expect some reshuffling in how spend splits across channels within the campaign, since the same target-consistency logic applies at that level too. Give it one to two full conversion cycles after any target change before judging the result, Google's guidance and basic statistics agree on that point. And be careful with Performance Planner forecasts specifically between August 17 and August 31, Google has flagged that the tool's forecasts may lag the new bidding behaviour during that window.
The part worth saying plainly
This is not a crisis. It is a dial being turned on a system most advertisers never fully understood in the first place, the gap between "what my target says" and "what my campaign actually does" has quietly existed in every budget-limited account for years. Some businesses have been unknowingly running more efficiently than their stated goals, others have had that same gap masking a target that was never realistic to begin with. August 17 is the day that gap closes, whichever direction it closes in for your account.
The accounts that come out ahead are the ones who look at their real numbers before the date, not after. This is exactly the kind of gap between what a platform reports and what a business actually needs that we dig into in why your ROAS looks fine but the business still isn't making money, because a target that flatters your dashboard and a target that reflects your margin are not always the same number.
What to do this week
Open the Bid Target Adjustment Tool or the Recommendations tab in every Google Ads account you touch. List every campaign marked "Limited by budget" on a target-based strategy. Compare stated target to actual recent performance for each one. Decide, deliberately, whether to update the target or let it drift, and write down which one you chose and why, so you are not guessing at your own reasoning in September.
If you would rather have a second pair of eyes confirm your account is actually reading these numbers correctly, and check the twenty other places budget-limited accounts tend to quietly leak money, our free 15-point Profit Audit covers exactly this kind of account-level review. Thirty minutes, no deck, no obligation.