Google has announced a change to how target-based bid strategies behave, and if any of your campaigns show the "Limited by budget" flag, it directly affects the results you will see from 17 August 2026.
The short version: campaigns that have quietly been beating their targets because a budget cap was doing the restraining will stop overdelivering. From August, Target CPA and Target ROAS will aim to perform to the target you set, not beyond it. If your targets have been set loose because the budget was doing the real work, those targets are about to become real.
What is actually changing
Today, when a campaign using Target CPA or Target ROAS is constrained by its budget, Google's bidding often overperforms the stated target. The budget cap forces the system to be pickier than the target asks it to be, so a campaign with a £50 target CPA might actually deliver at £35, simply because it runs out of budget before it runs out of restraint.
From 17 August 2026, Google says these strategies will "more consistently perform toward your bid target", including when you adjust budgets. In practice: set a £50 target and the system will spend towards a £50 CPA, even where it used to hand you £35. The efficiency you were banking was never your target. It was a side effect of the constraint, and the side effect is being removed.
Google's stated rationale is predictability: campaigns that behave consistently as budgets change are easier to scale with confidence. That is true. It also means the free efficiency margin on budget-capped campaigns goes away, and the target you set becomes the performance you get.
Who is affected
The change applies to Search, Shopping, Performance Max, Demand Gen, Display, Hotel and Travel campaigns using target-based bid strategies, across Google Ads, Search Ads 360, Display & Video 360, Google Ads Editor and the API.
App campaigns, Video reach and Video view campaigns are excluded and keep the current behaviour.
If none of your campaigns are budget-constrained, very little changes for you. If a meaningful share of your account runs with the "Limited by budget" flag, this is worth taking seriously now rather than in September when the performance shift shows up in reporting.
The timeline
- 6 July 2026: Google's Bid Target Adjustment Tool became available, letting you review affected campaigns and apply recommended target adjustments.
- 17 August 2026: The new behaviour takes effect.
Importantly, Google has confirmed it will not automatically adjust your targets or budgets. Whatever your targets say on 17 August is what the system will aim for. Doing nothing is a decision.
Your five options
For every budget-limited campaign on a target-based strategy, you have five choices:
- Keep your current targets. Correct only if your targets already reflect the performance you genuinely need. For most budget-capped campaigns they do not, because the budget has been doing the disciplining.
- Apply the tool's recommended adjustments. Google's tool suggests targets matching your recent actual performance. This preserves the status quo, locking in the efficiency you have really been getting rather than the looser number you had written down.
- Set your own targets. The best option if you know your unit economics. Set the target from margin and customer value, not from either the old label or the recent average.
- Switch strategy. Maximise Conversions or Maximise Conversion Value without a target lets the budget do the constraining, which is closest to today's behaviour for genuinely capped campaigns.
- Raise the budget. If the campaign was profitable at its true delivered CPA, the constraint was costing you volume. This change is a good prompt to fund what was working.
Our take
This change punishes set-and-forget accounts and rewards accounts that know their numbers. The pattern we expect to see everywhere in September: campaigns whose written targets were fiction, suddenly performing to the fiction.
Before 17 August, pull every campaign flagged "Limited by budget", compare the stated target against actual delivered performance, and close the gap deliberately, using real margin data where you have it. That review takes an afternoon for most accounts and prevents a quarter of quiet efficiency loss.
If you are not sure which of your targets are fiction, that is exactly the kind of thing we look at in a PPC audit. Tell us what's not working.