By now you have surely heard about the changes coming to Google Ads on August 17th with regard to campaigns with limited by budget status who are using target ROAS (tROAS) or target cost per acquisition (tCPA) bidding strategies.
If you have not heard, the gist is this – campaigns will now more consistently hit the targets you set, rather than consistently over performing. This is a big simplification of the announcement, but it is the heart of the change.
From Google’s post on this topic:
“Today, when your campaign has a “Limited by budget” status, if you use a Target-based bid strategy (for example, Target CPA or Target ROAS), some campaigns may be overperforming on bidding targets and see performance fluctuations when budgets are adjusted.
After August 17, 2026, campaigns that are limited by budget that use a target-based bid strategy will more consistently perform toward your bid target, including when you make budget adjustments so you can grow your campaigns with more predictable performance.”
You can read the full post here.
Google is positioning this as a win for advertisers – your campaigns will perform more consistently and predictably! But, yes if you have been getting a $20 CPA while targeting $35 CPA, well, kiss that performance goodbye. Unless you adjust your target to $20, theoretically. Or unless you increase your budget to get out of “limited by budget” status because this change ONLY applies to campaigns with that status.
Their argument is also that if you make the adjustment in your campaign to be the better ROAS or CPA target you had been hitting, then when you increase budget, you will see less volatility in performance.
“Prior to these changes, if you increased the daily budget on a “Limited by budget” campaign with an over performing Target-based bid strategy, you would likely see fluctuations or decreases in performance. After August 17, the changes to bidding strategies will help your campaigns consistently optimize to your stated target regardless of your budget limit. This means you can confidently increase your budget to capture more conversions and conversion value without your performance efficiency unexpectedly fluctuating.”
Positioning this through the lens of – well when you up your budget, performance should be more predictable or consistent – is an interesting choice.
Listen, this is certainly one way to go. But I think Google is fundamentally misunderstanding limited by budget campaigns and assuming that they all are only limited because of some reason beyond this is what they have to invest in Google Ads. And that every account’s goal is to keep scaling in Google Ads. Both of these assumptions are wrong for many, many accounts.
I have made comments on other people’s LinkedIn posts on this subject and my overall opinion of this change is…
- This obviously benefits Google.
- It does not clearly benefit advertisers.
- Costs per click will very likely increase with this change.
- Volatility as this rolls out is highly likely.
- Explaining to clients who have had accounts that have been beating their targets for months or years that performance is about to change is not going to be fun.
- Google is not guaranteeing that if you change your ROAS or CPA targets from what they are currently to what you have been getting that you will keep getting the better performance. They say the bidding will optimize toward that level. That is not the same as saying you will continue with the same performance you have been getting.
What to do?
Well, I think Google would love it if budget limited campaigns just lifted their budget levels to get out of that status! But we know that is often not an option at all due to actual money constraints and sometimes the level Google wants to get out of limited budget status is nuts. So, clearly this is not a viable option for most advertisers that will be impacted by this change.
There is a tool in Google Ads to help you with your target adjustments.
“If your campaign is performing better than your stated target and you want to maintain your current actual performance, select “Apply” in the Bid Target Adjustment Tool (available starting on July 6, 2026) to adjust your target based on your campaign’s recent performance.”
It is interesting that nearly every section in the Google post about this change, ends with you can increase your budget later. The entire conclusion section is about increasing budgets!
So what you need to do now, is this:
- Be proactive with your clients or stakeholders about this change. Tell them what is happening and that performance might be negatively impacted.
- Talk about what target they want to change to, if they want to change. And make that change. If you are concerned about making a big change, you could split the difference between your current target and the target you are comfortable giving the system and make your switch a two stage process. This might cause further volatility though, so be sure to talk all of that through.
- Take a look at the recommended budget levels. I am not suggesting that you up your budgets just because of this. But, it is good to know what Google considers to be a non limited budget level.
- Be prepared for things to be bumpy for a bit. From Google’s post: “Evaluate over time: After making budget increases, wait 1 to 2 conversion cycles to evaluate the campaign’s performance to ensure it is delivering on your target.”
The truth is, no one knows how this will end up playing out in your accounts. Not even Google if we are being honest. The best you can do is be prepared and create a working plan for how you want to manage this change and then adjust when you see what actually happens.
People who are already testing this are reporting some not great results. I expect that results will shift, probably even dramatically, when everyone’s campaigns will start behaving differently on the 17th.
I encourage you to read the full post from Google.
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