Introduction
A concrete example: Your Shopping campaign has a Target CPA of €45 because someone set it as a ceiling two years ago, and Smart Bidding has been landing sales at €31. Until now, that €14 was margin you kept. From 17 August, on a campaign limited by budget, Google treats €45 as the goal and works toward it, so your actual CPA rises.
The change covers Search, Shopping, Performance Max, Demand Gen and Travel campaigns in Google Ads and Search Ads 360, plus Demand Gen in Display & Video 360. For Demand Gen, Target CPC is covered alongside Target CPA and Target ROAS (Google Ads Help). App, Video reach and Video view campaigns keep their current behaviour (source), Hotel and Display campaigns already work this way, and Manual CPC and Target Impression Share are unaffected. Only campaigns limited by budget change, because campaigns without that status already bid this way. For Performance Max and Demand Gen, Google also flags possible shifts in how traffic is distributed across channels.
The gap between your target and your actuals
The announcement drew immediate criticism from paid search practitioners (PPC Land). Some of the best-performing accounts run deliberately loose targets, a high Target CPA or low Target ROAS set on purpose, because the slack gives Smart Bidding room to enter more auctions, find new customers and settle into efficiencies over time. Google has responded, and the response is about spend rather than exploration: campaigns limited by budget will now behave the way campaigns without that status already do, and the change will not alter spend on a campaign that is already limited by budget (Search Engine Journal, Google clarifies Smart Bidding update). What happens to the exploration room a loose target was buying is not addressed.
A gap between target and actual performance is either exploration headroom someone built on purpose, or a stale number nobody has revisited since it was set.
If the gap was deliberate, 17 August removes a working lever, and quietly removes a second one: the loose target also absorbed market drift automatically. When the SERP got more competitive or Quality Scores dipped, Smart Bidding adjusted underneath the ceiling without anyone touching a setting. After the change, you have to notice that drift and move the number by hand, which is why a one-time reset in August is the start of this job rather than the end of it.
If the gap was stale, you have lost nothing. You had a target review that was overdue anyway, and Google just set the deadline.
What action can you take?
Keep the target, but only if you can explain why that specific number is the goal. "It has been producing good results" describes the past, not an instruction you are willing to hand the algorithm. Google pairs this option with a tactic rather than inaction: give the campaign as much budget buffer as you can, so it stops being limited by budget. A campaign without that status falls outside this change entirely. Google also suggests consolidating campaigns that share a goal under portfolio bidding or shared budgets so the limited budget gets spent where it converts.
Match the target to recent actuals if the gap was never a strategy. To hold current performance, put your current average CPA or ROAS in the target field (Google Ads Help). Google has built the mechanism for it: the Bid Target Adjustment Tool has been live in accounts since 6 July, and it lists every campaign that is limited by budget on a target-based strategy, shows historical delivery against the stated target, and lets you apply new targets individually or in bulk. If you want to scope the work first, the Limited by budget status is filterable in the campaigns view, and Google has been pushing notifications into affected accounts.
Set a fresh target from your unit economics when even recent performance is the wrong anchor, because the number was inherited or never checked against margin. Google confirms you can set a more efficient target than current performance at any time, warns that daily spend will likely drop, and points to the bid simulator to model the trade-off before you commit.
Switch to Maximise Conversions or Maximise Conversion Value if your budget is genuinely fixed and volume matters more than a predictable unit cost. Google frames this as the fallback for an inflexible budget. Be clear that you are giving up cost predictability to buy volume, and that changing strategy does not remove the need to decide what a conversion is worth to you.
Avoid these three things
- Do not add data exclusions or new bid limits in response to this change. Google's FAQ calls that out as not recommended because it causes performance fluctuations. The problem here is the target, and reaching for a data-quality fix adds a second variable to a measurement window that needs to stay clean.
- Do not judge the change early. Google's guidance is to wait one to two conversion cycles before reading the bid strategy report, and to expect Performance Planner forecasts to be unreliable between 17 and 31 August. For a Shopping account with same-week conversions that wait is short. For lead gen with weekly CRM imports and a two to three week sales cycle, one to two conversion cycles works out to four to six weeks. Judge it on day three and you are measuring Smart Bidding's re-learning noise.
- Do not try to edit portfolio targets at campaign level. Portfolio targets sit with Google, third-party tools cannot edit them per campaign, and changing a target directly pulls the campaign out of the portfolio. Google's Bid Target Adjustment Tool is the route for those.
On Shoparize Managed Ads, you pay an agreed rate per sale
On your own campaigns, an algorithm sets your cost per sale, working toward whatever number sits in the target field. That was always true. What changed is how literally the algorithm takes the number, which means the number now needs maintenance: a quarterly pull of every campaign that carried a Limited by budget status, a check of target against delivery, and a manual adjustment whenever the market moves underneath a number you set months earlier.
On a Shoparize Managed Ads campaign, you pay an agreed rate per confirmed sale, known before we buy a single click. We invest the ad budget and absorb the click costs. Campaigns run across Google Shopping, Bing Shopping Ads and our own comparison marketplace. Google's bidding mechanics act on our media cost, not on your cost per sale, and if our campaigns generate no sales you pay nothing. This is how we run Shopping campaigns for 25,000+ merchants across 21 European markets.
The obvious question is whether this competes with your own campaigns. It does not. Managed Ads runs alongside them with separate tracking, you see every query and every conversion, and you keep full control of your accounts.
If you are keeping your own campaigns limited by budget, Shoparize Premium CSS is worth a look. Your bids carry 25% more weight in every Google Shopping auction. That does not change your Limited by budget status or what Google's bidding does to your CPA, but the budget you have already committed buys more clicks and more sales.
