Google Ads Smart Bidding Update: What Advertisers Need to Do Before August 17, 2026

If you manage Google Ads campaigns, August 17, 2026 is a date worth marking in your calendar.

Google is changing how Smart Bidding behaves for campaigns that use Target CPA or Target ROAS while also being limited by budget. Although this is a technical update, it has the potential to increase advertising costs for many advertisers who do nothing.

The change will not affect every account. However, businesses running older campaigns with legacy bidding targets could see their cost per acquisition gradually increase without making any changes to their campaigns.

In this guide, we'll explain what is changing, why Google is making this update, and what actions advertisers should consider before the rollout.

What Is the Google Ads Smart Bidding Update?

The Google Ads Smart Bidding Update changes how Google's automated bidding system interprets Target CPA and Target ROAS settings for campaigns that are limited by budget.

Previously, budget-limited campaigns benefited from an additional layer of optimisation. Google's system would naturally focus on the cheapest and highest quality conversion opportunities, often outperforming the advertiser's target.

For example:

Target CPA	Actual CPA Before Update	Behaviour
€20	€11	Google prioritised only the highest quality auctions because the budget was constrained.

After August 17, Google will stop applying this hidden optimisation.

Instead, Smart Bidding will attempt to deliver results much closer to the actual Target CPA or Target ROAS you've entered, regardless of whether the campaign is limited by budget.

For advertisers with outdated targets, this could mean higher acquisition costs.

Which Campaigns Are Affected?

The update only affects campaigns that meet both conditions:

• They are marked as Limited by budget

• They use one of these automated bidding strategies:

  • Target CPA

  • Target ROAS

Affected campaign types include:

Campaign Type	Affected
Search	✓
Shopping	✓
Performance Max	✓
Demand Gen	✓
Travel Campaigns	✓

Campaigns using these strategies are not affected:

• Maximize Conversions

• Maximize Conversion Value

• Manual CPC

• Target Impression Share

• Target CPM

Campaigns with healthy, unconstrained budgets are also unaffected.

Why Is Google Making This Change?

Google explains that advertisers often experienced unpredictable performance when increasing budgets on campaigns limited by budget.

Previously, increasing the daily budget could dramatically change campaign efficiency because the algorithm suddenly had access to many more auctions.

By forcing Smart Bidding to optimise around the explicit Target CPA or Target ROAS instead of relying on budget constraints, Google aims to make campaign scaling more predictable.

You can read Google's official announcement from Google Ads Support

The Biggest Risk for Advertisers

The biggest risk is not the update itself.

The biggest risk is forgetting about campaigns that have been running successfully for years.

Imagine a campaign with:

• Target CPA: €40

• Actual CPA: €18

Today, that campaign may perform exceptionally because Google's previous optimisation favoured only the most efficient auctions.

After August 17, Google will gradually work towards spending closer to that €40 Target CPA unless you update the bidding target.

Nothing else changes.

Your campaign simply becomes more willing to pay higher acquisition costs because that is what you've told Google you are prepared to pay.

Google's Four Recommended Options

Google has introduced a Bid Target Adjustment Tool that helps advertisers review historical performance and update bidding targets before the rollout.

Here are the four possible approaches.

Option 1: Match Your Real Performance

If your campaign consistently performs better than your Target CPA or Target ROAS, update your target to match reality.

Example:

Current Target CPA	Actual CPA	New Target
€20	€11	€11

For most advertisers focused on profitability, this is likely the safest approach.

Option 2: Leave Everything As It Is

If you're comfortable paying up to your existing Target CPA or Target ROAS, you can simply leave your settings unchanged.

Google will gradually optimise performance towards those values.

Option 3: Choose a Middle Ground

Instead of matching historical performance exactly, you can choose a more conservative adjustment.

Example:

Current Target CPA: €20

Historical CPA: €11

New Target CPA: €15

This allows additional conversion volume while still controlling costs.

Option 4: Switch to Maximize Strategies

Businesses that primarily want the highest possible conversion volume from a fixed daily budget may prefer moving to:

• Maximize Conversions

• Maximize Conversion Value

These strategies remove explicit target limits and allow Google's algorithm greater flexibility.

Our Experience Managing Google Ads Campaigns

From our own client portfolio at Avocadots, we expect this update to have minimal impact. The reason is simple. Most of the Google Ads accounts we manage already use Maximize Conversions where it aligns with the client's objectives and campaign maturity. As a result, only two active client accounts currently require adjustments before the August rollout. This highlights an important point.

Major Google Ads updates rarely become major problems for advertisers who review their accounts regularly. The businesses most at risk are those running campaigns on autopilot with bidding targets that were set months or even years ago.

Best Practices Before August 17

Before the rollout, we recommend:

• Review every campaign using Target CPA or Target ROAS.

• Check whether the campaign is marked as Limited by budget.

• Compare current targets with actual CPA and ROAS performance.

• Use Google's Bid Target Adjustment Tool where appropriate.

• Record your current CPA, ROAS, CPC and conversion volume before making changes.

• Allow at least one to two conversion cycles after making adjustments before evaluating performance again.

Avoid making multiple bidding changes within a short period, as Google's machine learning needs time to recalibrate.

Final Thoughts

The Google Ads Smart Bidding Update is one of the most significant bidding changes Google has introduced in recent years for advertisers using Target CPA and Target ROAS.

For some businesses, the update may have little or no impact.

For others, especially accounts with outdated bidding targets, doing nothing could gradually increase advertising costs without improving results.

The good news is that Google has provided advertisers with the tools needed to review campaigns before the rollout. Taking the time to audit your bidding strategy now could help preserve your current performance after August 17.

If you're unsure whether your campaigns are affected, Speak with our Google Ads specialists. We can review your account, assess your bidding strategy, and help ensure your campaigns remain efficient after the update.

Frequently Asked Questions

Will every Google Ads account be affected?

No. Only campaigns that are both Limited by budget and use Target CPA or Target ROAS bidding strategies are affected.

Does this change Google's ad auction?

No. The auction itself remains unchanged. This update only affects Smart Bidding optimisation.

Will Maximize Conversions campaigns be affected?

No. Campaigns using Maximize Conversions or Maximize Conversion Value are not impacted by this update.

Should I lower my Target CPA?

If your campaign has consistently outperformed its target due to budget limitations, reviewing and updating your Target CPA is generally worth considering before August 17.