On 17 August 2026, Google is changing how its bidding systems behave for a specific group of campaigns: those that are limited by budget and use a target-based bid strategy. If that isn't your account, this update won't affect you. If it is, it's worth understanding before the date rather than after.
There has been a fair amount of commentary framing this as advertisers being forced to spend more. The reality is more specific and less dramatic than the headlines. Your budgets are still respected. What changes is how the system bids within them. This article sticks to what Google has documented, what it means in practice, and the choices you have.
No predictions, no workarounds. Just what changes and what to do about it.
The TL;DR: from 17 August 2026, campaigns that are limited by budget and use a target-based strategy (Target CPA, Target ROAS, and Target CPC for Demand Gen) will bid more consistently toward the target you set, even when you change budgets. Today, a budget-limited campaign often over-performs its target, for example hitting a lower actual CPA than the target because budget, not the target, is the real constraint. After the change, Google's systems optimise toward the set target instead, so actual CPA may rise toward the target, or ROAS settle toward it, for accounts currently over-performing. Your daily and monthly budgets are always respected. Google has released a Bid Target Adjustment Tool to review and revise targets before the date. If your current performance is already your goal, you may need to lower your target to keep it.
What is changing on 17 August 2026
In Google's own words, "Starting August 17, 2026, Google will be making changes to its bidding systems" so that campaigns "more consistently perform toward your bid target, including when you make budget adjustments."
The core idea is consistency. Google's stated aim is more predictable performance against the target you set, particularly when you increase or decrease budgets. Whether that consistency helps or hurts a given account depends on the gap between your target and your current actual performance.
One point worth stating early, because it gets lost in the coverage: Google is explicit that "your daily and monthly budget limits will always be respected." This change adjusts how the system bids toward your target. It does not raise your spend caps on its own.
Who this affects, and who it doesn't
The change applies to campaigns that meet two conditions at once:
- They are currently marked "Limited by budget."
- They use a target-based bid strategy.
Per Google's FAQ, the affected campaign types are Search, Shopping, Performance Max, Demand Gen and Travel campaigns managed in Google Ads or Search Ads 360, plus Demand Gen campaigns in Display & Video 360.
The affected bid strategies are Target CPA and Target ROAS across most of those types, and Target CPC for Demand Gen specifically.
Google lists what is not affected:
- Manual CPC and Target Impression Share strategies are unaffected.
- App and Video campaigns are not part of this change.
So if your campaigns are not budget-limited, or you use manual bidding, there is nothing here to action.
Why Google says it's making the change
According to Google, the goal is "more consistent and predictable performance based on the targets you set, even when you make budget adjustments."
The problem it describes is real. Today, a budget-limited campaign can show performance that swings around when you change the budget, because the budget cap is doing much of the work rather than the target. Google's position is that after the change, you can adjust budgets and expect performance to track the target more steadily.
That is Google's framing, and it's a reasonable one. The neutral point to make is that "performing toward your target" cuts both ways, which is the next section.
What it means in practice
Here is the mechanism, using Google's own worked example.
Say your Target CPA is £10, but your recent actual CPA has been £5. Today, that campaign is over-performing its target, most likely because it is capped by budget and only serving on its most efficient queries. Google's documentation states that after the change, "your campaign will start delivering closer to the £10 target you originally set."
In other words, the system will use the headroom between your actual CPA and your target to pursue more conversions within your existing budget. You may get more conversions, but your actual CPA can rise toward the £10 you told Google was acceptable. The same logic applies in reverse for Target ROAS: performance settles toward the ratio you set.
This is the heart of the "costs will rise" coverage. It isn't a penalty, and it isn't extra spend beyond your budget. It's the system taking your target literally. If £5 was a happy accident and £10 is genuinely your ceiling, this may bring you more volume. If £5 was actually your goal and the £10 target was just a number you never revisited, you'll want to act before the date.
Because this is target-based bidding, the quality of the decision still rests on your conversion data. It's worth remembering that Smart Bidding only optimises as well as the conversions you feed it, so this is a good moment to confirm your tracking and values are accurate before you change anything.
Your options before 17 August
Google has released a Bid Target Adjustment Tool, available in Google Ads from 6 July 2026, to review affected campaigns and model changes. In practice you have four choices, and each is legitimate depending on your goal:
- Keep your current target. Choose this if your target already reflects what you're willing to pay, and you're comfortable with performance moving toward it.
- Align the target with recent performance. The tool can lower your target to match your recent actual CPA or ROAS, so performance stays roughly where it is.
- Set a custom target. Pick a number that matches your business goal, for example £7, and the campaign will trend toward that.
- Switch to a strategy without a target. Move to Maximize conversions or Maximize conversion value to prioritise volume within budget, without a target constraint.
Google also advises what not to do: avoid applying data exclusions or bid limits purely as a reaction to this update, and consider a budget buffer if a campaign is tightly constrained.
There is no single correct answer. It depends on whether your recent actual CPA or ROAS is the result you actually want, or simply where a budget-capped campaign happened to land.
Two timing notes. Google says to treat forecasts with caution between 17 and 31 August, while the change settles. And if you increase budgets afterwards, wait one to two conversion cycles before judging the result, which matters more if you have a long path to conversion, as covered in this piece on conversion lag and Smart Bidding.
Bottom line
- The change takes effect on 17 August 2026 and applies only to budget-limited campaigns using a target-based strategy, across Search, Shopping, Performance Max, Demand Gen and Travel.
- After the date, those campaigns bid more consistently toward the target you set, rather than over-performing it because budget is the real constraint. Your budgets are still respected.
- Accounts where actual CPA sits well below the target are the ones most likely to see costs move toward the target. Accounts already tracking close to their target will see little change.
- Review affected campaigns with the Bid Target Adjustment Tool before the date, decide whether your current target is genuinely your goal, and adjust it if it isn't.
- Related reading if you're weighing budget changes afterwards: why some accounts stop responding to more budget at higher spends.
This is a settings review, not an emergency. The advertisers most likely to be caught out are those whose target was never set to reflect their real goal. The ones who check their targets before 17 August will, in most cases, simply carry on.
If you'd like a second pair of eyes on which of your campaigns are affected, that's part of what my Google Ads management service covers.
Sources and further reading: