On 17 August, Google changed what a bidding target means. Until last week, a budget-limited campaign on Target CPA or Target ROAS was allowed to overperform: you asked for a cost per conversion of 100, Smart Bidding found conversions at 70, and you kept the difference. That behaviour is gone. Budget-limited campaigns now optimise to the number you typed in.
It sounds like a technicality. It isn’t. For accounts where targets were set once — in many cases years ago — and left alone because performance kept beating them, the safety margin just disappeared.
What actually changed
- Overperformance is over. If your actual CPA has been running well below your stated target, expect it to drift up towards the target you set. Google’s own guidance is explicit about this.
- The scope is wide. Search, Shopping, Performance Max, Demand Gen and Travel campaigns on Target CPA or ROAS — plus Target CPC on Demand Gen. App and video campaigns keep the old behaviour.
- Nothing adjusts automatically. Google will not touch your budgets or your targets. If you do nothing, the new behaviour simply applies to the old numbers.
- Forecasting is wobbly during the rollout. Google flags that its own forecasting tools may be off until the end of August. Judge performance on delivered numbers, not projections, for the next two weeks.
Why this catches teams out
Because “set and forget” was, for years, a defensible way to run target-based bidding. The system beat your number; auditing the number felt like busywork. That logic inverted overnight. A stale target is no longer a conservative instruction the machine improves on — it’s a literal instruction the machine obeys.
Your targets used to be suggestions. As of this week, they’re instructions.
What to do this week
Inventory every campaign flagged “Limited by budget” on a target-based strategy. For each one, ask when the target was last set and what your economics support today — then reset it deliberately, raise the budget, or change strategy. Google’s Target Adjustment Tool suggests numbers from your history; use it as input, not as the decision.
This is also a fair moment to ask a harder question: who in your setup owns changes like this? Not “who runs the ads” — who reads platform changelogs and translates them into decisions before they cost you money? That’s the kind of gap our 14-day baseline tends to surface within the first two days.
Sources
Questions we get on this
How do we know which of our campaigns are affected?
Look for the “Limited by budget” status in Google Ads, on any campaign running Target CPA or Target ROAS — across Search, Shopping, Performance Max, Demand Gen and Travel. That flag is the trigger: budget-limited plus a target-based strategy means the new behaviour applies. Unconstrained campaigns keep working as before.
Should we just accept the target Google’s adjustment tool recommends?
Treat it as a starting point, not an answer. The tool projects a number from your recent history — which is exactly the overperformance era you’re leaving. The better question is what CPA or ROAS your unit economics actually support. Set the target from your margin maths, then compare it with the tool’s suggestion.
How long does a proper review of this take?
For a typical SME account: about an hour to inventory affected campaigns, and a working session to reset targets against real economics. It’s not a project. It’s a week-one hygiene task — the risk is not doing it at all and quietly paying 20–40% more per conversion from mid-August onwards.
